7
Conclusion
Eighth Report - Improving Defence Inven…
Acknowledged
MoD’s inventory management has faced long-standing issues with its many legacy IT systems, which have limited functionality and reinforce the fragmentation of its inventory management. Each Command has its own core inventory management system, and there are other systems used across the Support function for managing other types of inventory, …
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MoD’s inventory management has faced long-standing issues with its many legacy IT systems, which have limited functionality and reinforce the fragmentation of its inventory management. Each Command has its own core inventory management system, and there are other systems used across the Support function for managing other types of inventory, as well as aspects such as engineering. Whilst the MoD has reduced the number of Support systems from around 250 in 2010 to 89 today, two of its base inventory management systems (SS3 and CRISP, used by the Army and Royal Navy respectively) are nearly 40 years old.15
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Government response AI summary
The government agrees with the committee's observations and will provide an update within six months by July 2024. It also provided corrected data on inventory stockpile holdings, claiming more success in managing them down than previously reported.
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HM Treasury
9
Conclusion
Eighth Report - Improving Defence Inven…
Acknowledged
However, we do not see how this step alone will address the existing gaps in the MoD’s data. For instance, when new systems were introduced in DE&S’s central warehouses through the Team Leidos contract, DE&S stated that it had to engage a private company to do a lot of work …
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However, we do not see how this step alone will address the existing gaps in the MoD’s data. For instance, when new systems were introduced in DE&S’s central warehouses through the Team Leidos contract, DE&S stated that it had to engage a private company to do a lot of work on the data for them.18 We were also concerned to hear that the contract for the Bridging the Gap programme, valued at £515 million, was awarded to a large defence prime contractor without a competitive tendering process.19 The Bridging the Gap contract was a five-year contract extension with the same supplier—Boeing Defence UK—of the £800 million Future Logistics Information Services (FLIS) that was signed in 2010 and due to run until 2022.20 The MoD explained that the contract extension would “provide capability that Bridges the Gap between the FLIS contract and the future long-term strategic solution, known as the Business Modernisation for Support (BMfS) project”.21 The MoD told us that it intended to competitively procure the suite of contracts relating to its larger future transformation of its legacy IT systems, with its contract for engineering support and asset management software currently out to tender.22 Transformation plans
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Government response AI summary
The government agrees with the committee's observations and will provide an update within six months by July 2024. It primarily provides corrected inventory stockpile data to demonstrate better management than reported, rather than directly addressing concerns about data gaps or non-competitive contracts.
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HM Treasury
13
Conclusion
Eighth Report - Improving Defence Inven…
Acknowledged
The MoD outsourced its central warehousing and the procurement of some of its commodities—food, clothing, general and medical supplies—to a consortium under the Team Leidos banner28 through the Logistics and Commodities Services Transformation (LCST) contract in 2015. Managed through DE&S, this has been a successful contract overall, and as of …
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The MoD outsourced its central warehousing and the procurement of some of its commodities—food, clothing, general and medical supplies—to a consortium under the Team Leidos banner28 through the Logistics and Commodities Services Transformation (LCST) contract in 2015. Managed through DE&S, this has been a successful contract overall, and as of May 2023, the MoD forecast that it would achieve financial efficiencies of £403 million by 2028, when the contract is due to come to an end.29 Through the contract, DE&S told us it has increased the agility of its supply operations, gaining greater efficiency in transporting inventory across the UK and Europe, reductions in its carbon footprint of around 28%, and reductions in commodity purchases through better forecasting. DE&S told us that this agility has also been useful in mobilising stocks for Ukraine.30
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Government response AI summary
The government acknowledges the committee's observation regarding the successful LCST contract and states that lessons learned have been shared with the Future Defence Support Services programme and will be forwarded to the Committee with confirmation on plans to implement.
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HM Treasury