MoD to reset relationship with industry

Discussion in 'Current Affairs, News and Analysis' started by Yeoman_dai, Jun 10, 2010.

Welcome to the Army Rumour Service, ARRSE

The UK's largest and busiest UNofficial military website.

The heart of the site is the forum area, including:

  1. Not sure I like the bit about more contractor involvement. It seems to me that most areas we have contractorised have not delivered cost savings but have delivered far worse service.

    A petty example I know but telling... the PAYD canteen that ran out of hot food at 12.35 on Tuesday. " I can make you a baguette...." does not cut it.
  2. mysteron

    mysteron LE Book Reviewer

    I am not sure why people are surprised at this. The UK has a very low level of 'contractorisation' integrated into its business compared to other nations.

    Even the Yanks have it deeply set, look at the AFV Fleet support model that has contractors sustaining and maintaining fleets in operational theatres.

    Thos 'filthy' contractors that many are quick to hate are realistic about this. The big players are already in deep talks with the MoD as to how they can progress this.

    look at it from their point of view. The share of wallet is fixed and will only shrink. That means that it must maximise the share of wallet (get rid of competition, rapidly & aggressively fill their gaps in market and dominate their boundaries) as well as minimising costs, creating operational efficiencies and realigning its business to match the SDR.

    That is no mean feat. It is time the military put its toys in the box, grows up and realises that it needs to work with industry and with the civil serpents.

    The CS needs to become business savvy, not what it thinks it is today. It needs to wise up and fast so that the partnerships that defence companies will make are effective and kept honest.

    Industry needs to realign to SDR, understand the requirements and drop any hope of free lunches from Gov't anymore.

    Bottom Line: The military fear industry because you don't understand them, and vice versa. Get over it by learning what industry can actually offer, look past the glossy brochures and sales patter and get down to effective requirements definition against set budgets at the same time accepting that off the shelf meeting 80 - 90% of requirement will always be more cost effective than adding scope creep by polishing a turd trying to make it perfect.

    In short, all sides need to adapt - now.
  3. If we just did that one thing it would make so much difference. How many squillions have we wasted, how many bits of fairly basic kit were late or failed to enter service at all because we wanted that extra bit of gold-plate.

  4. In defence of most "civil serpents", that extra layer of gold plate is often demanded, very late in the day, by the Service.

    In defence of "gold plate", a few extra percent may make the product more robust and suitable for an environment "COTS" or even "MOTS" kit isn't designed for. If you buy to a lower spec, you often find you need to replenish more frequently. I don't imagine it is an easy thing to get the balance right.

    Remember what happened on, for example, BOWMAN, when they accepted lower spec batteries. There had to be a total recall, they were scrapped and it took years to replace them. Not only was that a huge waste of money, but it cost lives. What made matters worse was that the higher spec battery from a different company cost half as much. The "off the shelf" argument isn't always clear cut. There's the politics as to which company to support, something that is out of the hands of our procurers. In this case, a Defence Minister was on the board of the supplier. Not that this was a factor of course.
  5. IS Ski Geek

    IS Ski Geek War Hero Moderator

    I feel that sometimes the process is just not agile enough.

    Yes requirements and scope creep are a major issues but we have to be able to move with the differing situations that the military finds itself in.

    COTS will not always be the answer but will help in some areas. The fact that any change seems to put up so many barriers or in fact costs such a ridiculous amount of money and delays the delivery to such an extent that the equipment is so dated by the time arrives is criminal.

    Both sides have a lot to learn and need to learn quickly. I have a sneaking suspicion that we are going to have some serious cuts soon and we have to be able to get systems that are agile and deliver the basic requirement. maybe 80% delivered with 20% left to tweak when it arrives.

    Just my view of course.... and what would I know after having to deal with half the pump that has been delivered over the last 20 years.
  6. mysteron

    mysteron LE Book Reviewer

    Bakersfield, you are right. it is never clear cut and re-reading the post makes it sound like I am an advocate for 100% off the shelf. I am not.

    However, it is better in requirements definition to find the off the shelf product. see if it is fit for purpose now and consider having the refinement from there - if necessary. Not, as is the habit, to start from scratch - that is where I am coming from.

    You also suggest that I am against the CS, I am not. I recognise that parts do add value. But they are way behind in managing an effective business. The causes are many and have merited other threads in this site. But essentially my view is that if you pay a CS below market rates for high powered positions (especially commercial & finance functions) then you will never compete with industry to keep them honest.

    The final part is the talk of Gold Plate in the final mile by the Service - that is exactly what I mean by requirements and scope creep. It must be robustly stamped out. Issue the product, then on first tech refresh, upgrade to new added requirements. It will rapidly make the services better at requirements definition upfront!!!

  7. The greatest flexibility when outsourcing a any function or service is gained when decisions and payments are made accurately and quickly. This benefits both the customer and vendor - and if a sense of trust is properly developed, such good will itself can have considerable spin off.

    We really have a lot to learn form the SPAMS in this, they haven't got everything right, but they certainly have a greater experience. The bottom line is that outsourcing can and does work, saving us manpower and equipment resources and, often as not, buying the risk.
  8. "But essentially my view is that if you pay a CS below market rates for high powered positions (especially commercial & finance functions) then you will never compete with industry to keep them honest"

    But as we have seen in recent weeks, if you pay CS too much, then you cause a media outcry about overpaid wastes of space. There is a fine balancing act, but my own view is that we need to look at renumeration in the mid management (B & C grades) as this is the point at which staff have a lot of knowledge, but their salary is usually falling far behind industry peers - C1's for instance earn about £35K pa, while their mil equivalents are on nearly £70k (plus allowances like boarding schools etc). Ultimately the C1 will walk if they get a better offer, which at these costs isnt' difficult for the private sector to afford, and leaves the MOD with a wasted investment and not much to show.
  9. msr

    msr LE

    'Q193 Mr Bacon: Mr Woolley, are you a chartered accountant?

    Mr Woolley: I am not.

    Q194 Mr Bacon: Are you a qualified financial person of any kind? Do you have any financial qualifications?

    Mr Woolley: I do not have financial qualifications.

    Q195 Mr Bacon: What is your job?

    Mr Woolley: I am the Finance Director of the Ministry of Defence.'

    Good to see they doubled the package for the next one:
  10. OldSnowy

    OldSnowy LE Moderator Book Reviewer

    Sadly for that arguement, Trevor Woollley was (and is) a very capable administrator, financier, and Crown Servant. What the MOD does NOT need - and this has been proved over the last few years - is more Accountants. It needs to get backan ability to control its own finances, without intense interference from HMT.

    It is easy to take swipes at Trevor Woolley - but he has immense experience of the MOD, and has done more than most to protect the capabilities of the Armed forces.

    Back on thread - the Government is being pressured by industry to 'buy British' - but we have little money, and as often as not stuff is available cheaper, faster, and of better quality, from overseas. This Government may not be as in thrall to the TUs as was the last one - but could well be beholden to industry in just as bad a manner.

    How much should we spend - and it is not cheap - on keeping key capabilities in the UK? What are those capabilities? Do we need to be able to build fast jets and helicopters? Do we need to be able to design them as well? Maintain them? All three are very different! Do we need to be able to make our own 155mm Ammo, or can we rely on assurances for delivery from, say Belgium?

    All key points, and will be brought out no doubt in the SDSR.
  11. in_the_cheapseats

    in_the_cheapseats LE Moderator

    There is fairly simple other way to save money for the MoD.

    Give up this endless pandering to the Primes and accept that for some work, the MoD can source items of kit themselves.

    My company sells kit to the MoD. It HAS to be done through a prime. I sure that the mark up on my kit is in excess of 20% and I suspect quite a bit more. I've even been told that my published prices are far more attractive but MoD wants to buy from a trusted source! :? Don't make sense to me.

    At the end of the day, my stuff is bought and commercially I should be happy. However as ex-army, I am damn sure one contract size was shrunk because of the difference in what I knew the requirement to be and what the budget could eventually buy, therefore decreasing the capability on offer to the fighting force. I also see it as a complete waste of tax payers money.

    Why, if you were looking to save money, would you continue to buy from the prime when the source is obvious, identified and cheaper?
  12. mysteron

    mysteron LE Book Reviewer

    The main reason for buying through a prime is that they have a confirmed level of liquidity and cash flow and are not susceptible to going bankrupt in the middle of an order.

    On mega deals that is why you have to have Consortium so that is the Prime goes bust the Tier 1 partner can fill the void and deliver the contract. HMT stipulation I am afraid.
  13. Bouillabaisse

    Bouillabaisse LE Book Reviewer

    All of which can be dealt with be effective contract terms, due diligence and some proper teamwork between MOD and company.
  14. mysteron

    mysteron LE Book Reviewer

    BB - I refer the gentleman to my earlier post about having the right talent in the CS to do such things.