Recommendation 2

The MoD’s inventory management systems remain outdated, and the quality of its data limits its ability to understand its inventory. 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. While it has reduced the number of Support systems from around 250 in 2010 to 89 today, the two base inventory management systems used by the Army and Royal Navy respectively are nearly 40 years old. The MoD acknowledges that, while its visibility of its inventory is generally good, its system functionality can prevent staff from having a deeper understanding of it. For example, the Royal Navy’s base inventory system can record that an item is unserviceable, but not for what reason, meaning the MoD will not know what degree of repair it may need. In 2010, the MoD entered into a £800 million contract with Boeing Defence UK called Future Logistics Information Services (FLIS) that was due to run until 2022.1 However, in late 2020 the MoD signed a five-year contract extension worth £515 million called “Bridging the Gap”,2 which the MoD explained at the time 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”.3 The MoD’s short-term plan for Bridging the Gap is to move the Army and Royal Navy onto an upgraded version of the Royal Air Force’s more modern inventory system. We do not see, however, how this step alone will address the existing gaps in its 1 WMS 3 December 2010 cc95WS-96WS 2 Q27 3 Tenders Electronic Daily, Ministry of Defence, ISTAR, SCIS, 11 December 2020 6 Improving Defence Inventory Management data. We are also concerned to hear that the MoD awarded the contract for this £515 million programme to a large defence prime contractor without a competitive tendering process. Recommendation: Within six months, the MoD should