Scandal of £6 billion wasted by the MOD

WatchingWater

Old-Salt
Book Reviewer
#2
Let's be thankful that at least the other 37 Billion is well spent then...
 
#3
Let's be thankful that at least the other 37 Billion is well spent then...
But thing of the extra good kit that could have been purchased!

Eg FRES - three quarters of a BILLION pounds to do what decide to purchase a design off the shelf for one of the main vehicles???? You could have bought one from the manufacturer to test out for probably less than 3 million!
 

Grumblegrunt

LE
Book Reviewer
#4
yet nimrod was actually going to be good kit! Bae being part of the a380 syndicate they could have tucked a few quid away from that in a spirit of patriotism.

I have it on good authority that the procurement civvies are going nuts because they know an allmighty slap is coming and it might effect their knighthoods
 
#5
Funny how the regular army reckons the TA don't know / practise / understand / have the skillset for current ops, yet reckon that they can do commercial contract negotiation on the back of a 2 year posting to Abbeywood....
 
#6
All reflected in the Topshop boss's recent review of government procurement - it is incompetent. Peter Green reckons he could save 17 billion pa by just tightening up our system of procurement. From what I saw in my old job in a high-prestige Whitehall office, there is no doubt he is right. Will the Coalition act on his report? We wait the outcome with interest ....
 

Grumblegrunt

LE
Book Reviewer
#7
I found a much high skillset in TA troops, what they lacked was fitness and muscle memory.

when I joined up TA first we could have built our own atomic bomb and delivery system from the talent at hand I reckon
 
#8
Nothing new really though, didn't new labour rip into the last lot of tories over this and bring out "smart procurement" as an answer.
Everyone knows the MoD needs a right good kick up the **** over this but the ones tasked with delivering it are the same ones that need it so it doesn't happen, will this report bring any change ?
 
#9
Funny how the regular army reckons the TA don't know / practise / understand / have the skillset for current ops, yet reckon that they can do commercial contract negotiation on the back of a 2 year posting to Abbeywood....
It always makes me giggle when the Army/MoD tries to negotiate with companies such as BritishWasteofSpace. They employ commercial lawyers on over 250k basic per annum with 15-20 years experience and sales professionals of similar experience. Against them the MoD puts together a Col or Lt Col and a Major, none of whom have ever worked for a commercial organisation. The cynic in me says that no-one from the MoD (uniformed or civilian) ever wants to look too closely at the deal because they are hoping for a nice bit of consultancy work when they retire...

One issue that has never been addressed (and even less so now that Qinetic was sold for nothing), is that the MoD pays BAe and other companies for the full R&D costs on a new piece of equipment. So how come the MoD don't own the technology or receive a slice of any future sales? Let's compare the Eurofighter Typhoon and the Bugatti Veyron.

Actual production cost of the Typhoon is probably in the order of 35-40 million GBP, yet Britain pays 130 - 160 million GBP each (depending on who you believe).

The Bugatti Veyron is on sale at around 1 million GBP, but actual production cost is 5 million. Why the difference? VW group know that they would never sell a car at 5 million, and the presence of the Bugatti strengthens the brand value of the whole group, as well as the technology used in the Veyron is being filtered throughout the group, resulting in better cars that sell for more money. i.e. VW make money in the long term by using the Veyron as a loss leader.

So why should the British Taxpayer get royally shafted by the cnuts at BAe?
 
#10
I found a much high skillset in TA troops, what they lacked was fitness and muscle memory.

when I joined up TA first we could have built our own atomic bomb and delivery system from the talent at hand I reckon

Well now... I reckon the lads I served with in the TA (I was a PSI) were a good bunch, but non of them were rocket scientists exactly. In fact some of them had problems tying their shoe laces correctly.
 
#11
The scale of the MoD’s bureaucratic mess is revealed in a previously unpublished report by Deloitte, the consultants, which estimates that the department could save up to 20 per cent of its running costs, or £4 billion, by streamlining management, privatising functions and outsourcing.
Riiiight, so a team of private consultants recommends more work is subbed out to....private consultants!

How many times have we been here? Bring in industry 'best practice', which very soon falls flat on its face when faced with the reality of military operations...'just in time' procurement anyone?
I also know of one MoD agency who hired in an industry 'top gun' to their commercial department. He decided he was going to shake things up and get rid of old school civil service 'dead wood' by making everyone in his department re-apply for their own jobs. This resulted in half the department losing their jobs - great he thinks, objective met, tick vg for promotion! However, there was no immeadiate plan to replace those who had been moved out...and as a result, for the next 6 months, the handful of remaining staff were barely able to keep up with demand when the shit hit the fan in UOR world...nice one Maverick! Of course, in his world, the UORs were an abberation that would be recorded as a 'risk' - in ours that meant delayed kit, and lives at risk.


Seriously, I don't doubt that things need to change in procurement...but one of the biggest problems we have is that military customer can never seem to decide what they really want, which may in turn be something to do with the fact that the same customer can change 3 or more times during the course of a major project!
 
#12
Now, lets go through the items in the report:

FRES
Yup, fair one, this has taken waaaaay longer than it should have.

However, most of this delay has been imposed by the fact the military customer(s) seemed to lose sight of what it was all about, and got caught up in the whole powerpoint, modular, network-centric pipe dream of the post 9-11 world.

However, of the money spent to far, how much of this has been spent on...wait for it....private industry consultants! WS Atkins, who managed to spend god knows how much cashing working out what everyone knew already - you can't get CR2 protection in a C-130 transportable platform, and that the industry offerings weren't suddenly going to go through a mobile-phone style quantum leap in technology.

Bulldog
Upgraded Bulldog as UOR for Iraq came out of Treasury Reserve - so not from MoD budget. The remaining mk3 replaced the Saxon in Mech Inf Bns until FRES delivers...so not really a 'scandal' that they did not go do Afghan.

Rivet Joint
Obviously couldn't find enough dirt here, so they concentrate on the fact that the RC-135 airframe is marginally older than the Nimrod airframe. Wow - can't be any good then, can it?


As above - I do think things need to change. However, much of the media-driven criticism is off the mark, and therefore does not help in advancing the cause - because incorrect allegations are easy to rebutt.
 
#13
One issue that has never been addressed (and even less so now that Qinetic was sold for nothing), is that the MoD pays BAe and other companies for the full R&D costs on a new piece of equipment. So how come the MoD don't own the technology or receive a slice of any future sales? Let's compare the Eurofighter Typhoon and the Bugatti Veyron.
What annoys me more is the fact that the MoD use BAe to tell them what equipment they need and how much it'll cost.

That's like me going into a car garage and saying 'Blank Cheque, tell me what I need'. Of course the guy is going to tell me that suede mats aren't enough and I need the velvet ones. BAe do the same to the MoD, and the MoD pay for both the velvet mats, and the consultancy fee for being told do buy them!
 
#14
What annoys me more is the fact that the MoD use BAe to tell them what equipment they need and how much it'll cost.

That's like me going into a car garage and saying 'Blank Cheque, tell me what I need'. Of course the guy is going to tell me that suede mats aren't enough and I need the velvet ones. BAe do the same to the MoD, and the MoD pay for both the velvet mats, and the consultancy fee for being told do buy them!
No they don't.

The MoD and single services decide what they want, write a requirement, and ask industry to cost it (who else is going to do that?). QinetiQ - who are industry now, but in most cases not a prime contractor are sometimes tasked to provide advice, but in most cases the 'independant consultant' role is carried out by Dstl, the part of DERA that wasn't sold (an usually overlooked).
 
#15
Outsourcing means jobs for the boys, not our boys. BAe spend our money hand over fist and what do we see for it? Their contracts are so written that their manning and office accomodation cost are paid for directly by the MoD, who have no control of those costs. Meanwhile our civil servants run around Abbey Wood searching for a free desk and phone.

Look at the PFI contract for plant equipment, staff, cars, managers, offices etc. sprang up everywhere. The people who used to fix the plant were much fewer and are still in place doing their other jobs. Where was the saving?
 

jrwlynch

LE
Book Reviewer
#16
One issue that has never been addressed (and even less so now that Qinetic was sold for nothing), is that the MoD pays BAe and other companies for the full R&D costs on a new piece of equipment. So how come the MoD don't own the technology or receive a slice of any future sales?
When I was involved, MoD kept all intellectual property rights on work they paid for. We developed the kit, and could try to market it overseas, but MoD could tell us "no sales to that dodgy dictator" and got a cut of the proceeds.

(Which was a problem when competing with US Foreign Military Sales and others who would practically give kit away as loss-leaders...)
 
#17
...but one of the biggest problems we have is that military customer can never seem to decide what they really want, which may in turn be something to do with the fact that the same customer can change 3 or more times during the course of a major project!
Nail, head. We have, unfortunately the desire to stamp our mark on things, in order to progress we need to show that we have improved our predecessors work. Very few people IMHO actually just focus on carrying on the good work done by those before them. I would argue that maintaining the same course and delivering an 85-90% solution should be the metric by which those in procurement are judged, changes of direction should be discouraged unless absolutely unavoidable.

...One issue that has never been addressed (and even less so now that Qinetic was sold for nothing), is that the MoD pays BAe and other companies for the full R&D costs on a new piece of equipment. So how come the MoD don't own the technology or receive a slice of any future sales? Let's compare the Eurofighter Typhoon and the Bugatti Veyron.
I think they do this to recover some of the PV money they invest. Some projects/TDPs... involve PV money, the way this "industry risk" is mitigated, is by retaining some of the IPR, particularly in the area of interfaces because you can bet at some point in the future we will want to network the deliverable with something else.
 
#18
Let's just look at a few of those allegations then:

"Corporate Lawyers running circles round Lt Cols, Majors and Captains". Well that could be possible if they were discussing the details of contracts without any advice from their professional contracts staff. My experience is you wouldn't last very long in the job if you did so. In my admittadly limited opinion the people most likely to ignore the advice of SMEs (contract, finance or technical) are the Ministers who get to meddle at very low levels of financial outlay.

Now to the VW/Veyron example - a good illustration of how industry will employ a sort of loss-leader. Wouldn't it be nice if British Companies could do this but don't forget we decided to try and have an ethical foreign defence sales policy. Most of the people in the world who have a need for weapons are not classed nice so it is difficult for industry to sell them stuff. Our competitors are a little less picky so the world gets saturated with cheap Chinese and ex-WP weapons. But at least we have a clear conscience eh, even if it does mean a declining defence industry.

"BAe Systems doing their own technical assessment?" Well no, of course they can't do their own assessments and most techie people I know are deeply cynical of BAe's claims and quality of work. They seldom deliver what they claim and we, the users know it. BAe however have massive influence and far too many tame MPs and people of influence in their pockets. Consequently they seem able to drive the agenda to their own purpose. Hence we seem to be forced into adopting strategies and equipment that is tailored to what BAe say they can produce. When the MoD doesn't play to Bae's rules they imply they will take their ball away and leave the UK without a capability. The Ministers then buckle to their will.

The latest report has been spouted forth by a Committee headed up by Margaret Hodge and alleges waste and corruption. Well if anyone should know, she should. Most of what they are saying can't be backed up and is just a feeble attempt to camoflage the depths to which the last government plunged the defence budget. It is absolutely inconcievable that Ministers did not get fully briefed on the impacts of delaying and cutting programmes. If they did not ask the searching questions or worse just accepted the down-stream impacts, then they were criminally negligent. It was their job to assess the impacts; they had no right to just allow things to drift for party political expediency.

Defence Procurement is nowhere near as simple as buying office supplies or managing retail purchase and sales, nor would I say the organisation is perfect, but the majority of staff in Procurement care deeply about what they are producing because they will in due course be out there using the kit. There is a crying need to recruit the brightest and best into Procurement and then encourage those with the right skills to return and be promoted to the highest and most influencial positions in the speciality. The problem is in a smaller Army, everyone want the brightest and best.
 
#20
The latest report has been spouted forth by a Committee headed up by Margaret Hodge and alleges waste and corruption. Well if anyone should know, she should. Most of what they are saying can't be backed up and is just a feeble attempt to camoflage the depths to which the last government plunged the defence budget.
As part of the last government, Margaret Hodge bears some of the responsibility for slow and wasteful procurement processes - but I'd hardly criticise "the depths to which the last government plunged the defence budget" when I compare it to the impact of the present regime ( I type as I sit watching the Harriers' farewell). Labour may have been slow in upgrading equipment to meet the needs of Afghanistan, but they didn't create the incredible capability gaps we will endure for at least the next ten years. (yes I know there is a public sector borrowing problem but that was caused more by reckless bank borrowing than Labour profligacy, is not exceptional by world or historic standards, and could be dealt with by taxation (for example of bankers who are back to paying millions in bonuses) as well as public sector economies, without endangering the nation's security.
 

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