Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
New procurement approach seeks to prevent over-specification and increase defence exports.
Conclusion
The Department has set the five-year target for programme length to stop the armed forces over-specifying their requirements.34 It said that the troubled Ajax programme, for example, had been tremendously over-specified.35 The Department anticipates it can achieve this target by involving industry in the procurement process much earlier.36 Instead of the armed forces developing a firm requirement then going to industry with it, the Department will state what the military capability problem is, and the NAD Group will seek solutions from industry.37 The Department expects this approach will also help to increase defence exports, as industry will be able to design products that work for an international market that is expanding as spending across NATO nations, especially in Europe, increases dramatically.38
Government Response Summary
The government confirms it is already implementing procurement reforms, including the NAD Group and a new segmented approach, to achieve a five-year programme length target by June 2026, and will agree key performance indicators within three months.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Target implementation date: June 2026 3.2 The department’s procurement reforms are building on previous initiatives and will go further. Teams delivering the national ‘arsenal’, the defence industrial strategy and end to end acquisition have been brought together as the National Armaments Director (NAD) Group, to enable better ways of working and empower greater collaboration across Defence. 3.3 A new segmented approach to procurement will enable tailoring of procurement processes to the type of capability, supplier and risk involved, with timescale targets as key measures of progress. 3.4 Portfolio-driven acquisition will optimise delivery, bringing together projects, programmes and services with a clearly defined purpose and measures of success that are linked to the department’s strategic objectives. This includes developing key performance indicators and measures to track progress effectively. Additionally, benefits realisation metrics during the implementation phase is being integrated into the reporting approach. 3.5 Initial measures under consideration include output metrics, such as improved schedule adherence and cost control, and input metrics, such as enhanced productivity. In some cases, baseline data for these measures already exist, while in others, baselines will need to be established. A target has been set to agree the key performance indicators within the next three months. 3.6 The department operates within an ever-evolving system, where significant procurement improvements will progressively emerge over time. While positive progress is expected by June 2026, it is acknowledged that achieving greater improvements will require sustained effort over a longer period. 3.7 Work is underway to define a common performance reporting lexicon for the NAD Group. This will support clear and standardised reporting of progress against agreed measures and benefits realisation.