Defence Procurement: To boldly GOCO

Discussion in 'Tanks, planes & ships' started by Bad CO, Apr 12, 2013.

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  1. Bad CO

    Bad CO LE Admin Reviews Editor Gallery Guru

    Interesting article in the latest issue of the economist about the proposed changes to DE&S and the de facto outsourcing of defence procurement:

    I've done a few tours in jobs that have involved considerable interaction with various different parts of DE&S and have to agree with the starting point that it just doesn't work very well (although individual people and elements often work very hard and produce minor miracles). The question about whether it would operate any better as a private company or whether the military would be bent over and rodded hard is very difficult to gauge.

    My personal view is that this will thrust a great deal of responsibility at FLCs which we just aren't able to deal with. The usual problems of lack of continuity in key posts, the continual need for OJAR enhancing initiatives, gapping and the general lack of glamour will result in something that looks very similar to failure. Cue massive profits for the lucky company and poor equipment at the front line.
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  2. Previous attempts to turn parts of MOD into businesses have not turned out well. Witness the QinetiQ saga. 10 years on from leaving the MOD, they have well under half of the employees that they had when they were privatised, although that was probably the idea all along. The Haddon Cave saga did not put them in a very positive light at all, suggesting some elements of a conflict of interests. Overall, one has to ask whether that protracted saga gave value for money for the taxpayer. Especially as in the mean time, the arm retained within MOD, Dstl, has significantly grown in both number of employees, and remit.

    There will be a number of issues caused by the creation of a GOCO, many of which will be re-learned I expect. Some element will need to be retained within MOD to provide "oversight" or to speak to the US, who do not like to deal direct with defence contractors representing the UK government. Over time this element will probably end up in competition with the contractor operated element. There will also be the usual cluster about TUPE and the contractor will inevitably chip away at the former MOD employees T&Cs, dismantle their final salary pensions etc.
  3. It'll be a disaster. Nobody at Abbey Wood joined the Civil service (ar Armed Forces) in order to make money for a company.

    Will service staff be 'attached' to the Company - how's that going to work then? 1st Battalion BAESystems Rifles anybody? Currently when Urgent Operational Requirements (UORs) are raised the staff move heaven & earth to get the requirement filled (rather than start raising quotes as to how much it will cost were they to do it). A lot of the staff are over 50 and will just wind down or jack. Morale is already at rock bottom, with the CS being effectively taxed in order to protect their so called gold plated pensions which means wages have visibly decreased over the last 2 years, whilst the pensions haven't increased by more than inflation because they're not getting pay rises, even though they will qualify for an extra 1/80th of the final salary (which is less of an increase than inflation). They don't progress up the pay scales like the military, so they haven't had a pay rise for 3 years now. The so called 'bonus scheme', imposed on them by force, was nothing more than cutting their pensions by giving them unpensionable pay. EU regulations regarding Government purchasing is running them all ragged with ridiculous rules that must be followed such as waiting 10 days before any contract can be placed so other companies, that didn't win it, can officially complain. Projects are hiring 'consultants' because there aren't enough Civil servants to actually staff and progress said projects, but the consultants cost more than the CS ever do. CS are already scrambling to become 'retained' within the bit that remains actual MoD, with Senior CS declaring themselves as vital to the MoD, but GOCO everything beneath me.

    I shall now risk revealing my secret ID by sayoing "it's all bollocks".

    Without Commitment (there's a phrase used at Abbey Wood)
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  4. And finally, how can it possibly be cheaper to employ another 300 'Management Staff ' for the Co that's going to run DE&S and then get the Government to pay a 20-25% Overhead and profit charge on top of all the costs? I make that a massive increase in running costs. The Civil servants/military don't charge overheads or profit on their costs currently.

    Or is it OK because the Company will donate some of its profits to the Govt party that instigated this nonsense?

  5. Firstly, thank you to BCO for being so well read.

    The experience he has had are relevant.

    I understand about the profit margin but then again seem to remember a stat out earlier this year which showed Serpents were earning more than private sector employees... I agree with you though, then again, there is systemic failure in procurement.

    Set a thief to catch a thief?
  6. Would that it were so - one of Bernards reasons for savagely reducing the military in DES over the years is the comparative salaries between military and Civil Servants. An SEO who can be in charge of a large scale project earns roughly the same as a senior Cpl (although one should note that SEO does not deploy and is only mandated to work 37 hours a week), whilst a simple E1 grade can be on as little as 15k a year. Civil Servants have had no pay rise for 3 years, progression pay has been removed, Bonuses, which formed part of a pay package have now been restricted and finally pension contributions have more than doubled and now absorb around 7% of a Civil Servants Pay package. Against this backdrop of continual pay reductions they have also been advised that 25,000 of them must be removed. Morale is at an all time low, this has however gone unnoticed at "Head Office' as they are too busy filling in claim forms for duck pond repairs. :)

    DE&S however has created it's own salary problems, it has overgraded posts to such an extent that they have staff employed managing the stationary cupboard at HEO grade (supposedly Maj equivalent - don't make me laugh). Any GOCO that comes on is going to carry out a significant job evaluation study and question why they are paying people 30K a year to order the toner cartridges or carry out basic filing functions on MOSS. This is perhaps one of the reasons the Civil Servants in DE&S are leaving in droves, they are aware that their outputs against their salary would not bear any substantial scrutiny in a commercial company

    However The GOCO option is grinding to a steady halt as all the bidders are slowly pulling out - to my knowledge there is now only one bidder for the "fair and open competition" which must take place, Bernard is getting around this by producing the internal DE&S+ option which theoretically will be a bidder - given Bernards agenda and drive towards the GOCO option anyone want to take a guess on who will win.

    Perhaps the question which should be posed at the end of this sorry debacle which has now taken up many years of work, and substantial payments to external contractors to scope the requirement is - what was the cost to the taxpayer to identify that the GOCO option is not viable enough to gender interest from commercial companies.
  7. The lack of continuity is an issue I encounter with my role (not with military but police) - and I am on the 'private' supplier side of the relationship. Senior staff come into roles and are under the impression they have to 'make an impact' - thus projects are seen as not in a strategic sense but in a 'what does is do to enhance my career' - if it can't be delivered in the time span the individual is in post, they're not interested, and focus instead on those projects which they can deliver and can say, at their appraisals, 'I've delivered x'. Thus the more difficult stuff is passed off/over - I am not blaming the people, it's the system which has made it this way.

    So this can be as frustrating for those private sector organisations wanting to deliver value, but get passed from pillar to post. Seems from reading BadCO's post that the military is no better these days. Sad times.
  8. Bouillabaisse

    Bouillabaisse LE Book Reviewer

    One of the longer term outcomes will be that salaries will rise to meet the current defence company norms. As the GOCO operator weeds out the bad it will fnd itself having to compete on the market for the good, many of whom will have to come from other defence companies. I know the industry is shrinking but the story in every quarter is lack of staff and particularly lack of qualified, experienced staff.

    Mind you, I wish I was a sub-contract manager - looks like some good job opportunities opening up in Bristol in about 3 years.
  9. As Bobalobs indicated last month, it looks like the GoCo option is about to be completely killed - story here (link).

    I would think this is going to make Bernard's position rather questionable. Wasn't he brought in to implement this particular change (for which he was the main champion)?
  10. Bobalobs, is certainly right about "grade" inflation. I was at ATSA Chertsey, when the first guys moved over to ABW. Most guys were at least 1 if not 2 levels lower than the equivalent guys who had moved up from St Christopher House. As PE were first in the door, everybody else moving in went up a grade, and hence you have some-one classified as an HPTO (old grade I know), who would of been a PTO in the old days.
    I am not sure what the answer is, but the recent (2 to 3 years ago) VERS was a disaster for ABW. All the old guys who knew what they were doing left and you have ended up with either people over promoted to replace gaps, or people who haven't an understanding of projects.
    I am currently working down under and the fact that the Oz equivalent of ABW, their DMO, doesn't have embedded SME WO's seems to me to hark back to the old days of DPA and DLO. It causes big problems as the "buyer" has no idea what the "User" really wants or how he will operate it.
  11. And sometimes you dont even need WO SME's to provide that advice!! Nothing better than sat at the end of a rather large table, listening to quite senior procurement and mil pers (who probably will never drive the things) dictating how its used, for a lowly soldier in the far distance say "Sir's, Gents....hate to say this but your talking crap"!! But then i met a lot of good ABW guys who wanted to get things right but were hamstrung early on!