Select committee: Defence Committee
Conclusion 3
Ninth Report - It is broke — and it’s time to fix it: The UK’s defence procurement system
Published 16 Jul 2023
Paragraph 90
Defence Committee All items in this report Report on parliament.uk ↗
Conclusion (the committee's words)
The culture within the Ministry of Defence, Defence Equipment and Support (DE&S), and the Front Line Commands is often one of misplaced optimism when assessing project cost and schedule. The current standard confidence measure used throughout DE&S is P50, meaning that an estimate of cost or schedule is as equally likely to be wrong as it is right. DE&S should move from P50 confidence measures to P75, thereby ensuring much greater realism in project forecasting, at all levels.
From: Defence Committee, Ninth Report - It is broke — and it’s time to fix it: The UK’s defence procurement system (HC 1099), paragraph 90, 16 July 2023
Government response
The government responded to the whole report on 20 September 2023 (deadline 16 September 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government does not agree that the procurement system is broken, but accepts "the need for reform" and sets out reform work already under way across Defence.
- On the Committee's P75 recommendation, it agrees there is "a strong argument" for higher probability figures for schedule approval of complex programmes, and has issued guidance making P70 "the norm on schedule" for Government Major Projects Portfolio programmes. It says approval at a higher P value "will not improve project performance".
- It agrees on the need for more consistent dialogue with industry and on "an increased emphasis on time", but says it "would therefore not be desirable" to use the Urgent Capability Requirements approach across the whole defence portfolio.
- On accountability, it "recognises the need to clarify internal accountabilities", and says this will be addressed in the Defence Operating Model review. It says "active consideration" is being given to the CEO of DE&S joining the Defence Board.
- On SRO tenure, it notes there is "no formal mechanism" to keep an individual in post for five years, but says it continues to explore how to use available levers such as performance pay and pivotal role allowances.