Sunday Times: Devastating report slams MOD procurement

#1
The Sunday Times: http://www.timesonline.co.uk/tol/news/politics/article6806498.ece

A DEVASTATING official report suppressed by ministers has revealed that soldiers’ lives are being put at risk by “endemic” failures at the Ministry of Defence (MoD).

The secret dossier blames “political fudge” and Whitehall incompetence for the plight of soldiers in Afghanistan who are provided with inadequate frontline kit.

The 296-page report, leaked to The Sunday Times, claims the scale of MoD bungling is so severe it “is harming our ability . . . to conduct difficult current operations”.

The publication of the document will be a severe embarrassment for Gordon Brown, who has insisted that the armed forces always receive the equipment they need.

Today’s projects, the report says, are over budget by £35 billion and arrive five years later than expected.

The author of the report, Bernard Gray, a leading businessman and former special adviser to Labour defence ministers, writes: “How can it be that it takes 20 years to buy a ship, or aircraft, or tank?

“Why does it always seem to cost at least twice what was thought?

“Even worse, at the end of the wait, why does it never quite seem to do what it was supposed to?”

He says the MoD department in charge of procurement is so incompetent that it should be privatised.

The report was commissioned by John Hutton, who resigned as defence secretary in June, and was due to have been published last month. However, Hutton’s successor Bob Ainsworth, backed by the prime minister, decided to bury it after ministers were plunged into a damaging row with General Sir Richard Dannatt, the recently retired army chief, over equipment shortages.

Dannatt claimed that a lack of helicopters and other kit had restricted operations in Afghanistan, where the British death toll has now reached 206.

The Gray dossier says that nimble enemies such as the Taliban “are unlikely to wait for our sclerotic acquisition systems to catch up”.

His criticisms are all the more devastating for their plain language, rather than the usual serpentine civil service euphemisms.

“The problems, and the sums of money involved, have almost lost their power to shock, so endemic is the issue,” writes Gray. “It seems as though military equipment acquisition is vying in a technological race with the delivery of civilian software systems for the title of ‘world’s most delayed technical solution’. Even British trains cannot compete.”

Gray argues that the MoD has a “substantially overheated equipment programme, with too many types of equipment being ordered for too large a range of tasks at too high a specification”.

He concludes that in the long term “the programme is unaffordable on any likely projection of future budgets”.

He accuses Labour politicians of failing to make the necessary “difficult choices” on defence spending and of overestimating the limited capabilities of British forces.

Gray calls for legislation forcing defence ministers to hold full-scale defence reviews every four or five years and criticises Labour ministers for their failure to hold a strategic defence review since 1998.

“In corporate life, no enterprise would persist with a 12-year-old strategy without at least reevaluating it fully on a regular basis,” he writes. “Few who would expect to prosper would even try to do so.”

He also warns that delays in shipbuilding programmes have meant that over the past 20 years the UK might have been unable to fight a Falklands-style conflict.

“We would have risked significant casualties, the very significant costs of acquiring adequate equipment at short notice (if available) or the embarrassment of not fighting at all.”

Gray acknowledges that his proposals will be seen as controversial and predicts the defence establishment may try to sit on his findings. “Vested interests will not welcome these changes and may seek to undermine them,” he writes.

Liam Fox, the shadow defence secretary, said: “Labour has created a defence black hole which is not only impacting on current operations in Afghanistan but threatens to provide an ongoing defence crisis for years to come.

“On top of this, this government of fear and smear refuses to publish an important and distinguished piece of work, simply because it points out the serial incompetence of Labour on defence. This report must be published in full.” A spokesman for the MoD said: “John Hutton commissioned a review on acquisition reform from Bernard Gray because we want to ensure that we are buying equipment as efficiently as possible.

“This report is currently in draft format and we are working hard with him on the issues he has identified.”
Also: http://news.bbc.co.uk/2/hi/uk_news/8216556.stm

Not exactly ground-breaking news but an interesting development in this issue. From my short time in procurement I can agree with the incompetency charge. Will this report ever see the light of day publically? Will anything change? Would privatisation work? We all know that Labour has failed the Armed Forces and that failing to have a serious review in 11 years is a failing, however would a forced review every 4 yrs be a good thing or would we spend too much time chasing our tails from the last one?
 
#2
I am not sure how privatisation would help much, given the driver for profit, which would drive capability even further down the agenda. Time and cost are the fixed variables (of sorts) so capability is always traded. With a profit driven agenda, time and capability would be traded, not sure how that woudl be better.

If I extrapolated the sheer incompetent waste of money on an almost daily basis in DE&S from what is fact, then I would suggest there are huge areas where money could be better utilised. We might start with the reduction in the checkers checkers, the constant "transition" or "change", the removal of IPTL's responsibilities to the "cluster" the ill concieved reductions in resources, which in reality end up costing the program more (it may be from a seperate pot, but its still more!).

Let me exemplify, say 4 people are needed to verify and effect design on a project and those 4 people are required to go to N America to conduct this work. When tasked the flight cost might have been £2000 per person, due to length of notice. But then the number of signatures, checks and re-checks means the authority to book is delayed for 3 weeks, so when it comes the flights now cost £5000 per person, so £8k is now £20k. The checks are to ensure "value for money" yet they cost £12k or 120% increase over the initial cost.

Now if that is one piece of work amoung one project, and one project amoung many, it could be fair to assume that costs could run 120% over as a result of incompetence, masked as governance, across all of procurement.

So the answer from wise men is, stop travelling. Which sounds good, the checkers can check the checkers are checking no one is travelling, so they are still busy. IPT's and clusters show savings on the T&S line. But wait, what happens when non compliant capability turns up from the contracter, there is no evidence of course to start off with, and since no depth of checking has been able to be done, since no one travels anymore so the glossy slide show looks plausable. But then after accepting it you find it actually doesnt work as expected and has no military value, so it is put into storage. Its paid for but never fielded, lest say to the tune of £3.5m, but thats from the EP line, not the T&S line so the £100k T&S savings in year still look good.

But my bumper guide to maths says, £3.5m (wasted) - £100k (saved) = £3.4m wasted.

How on earth can anyone be expected to make any difference when the above formula makes sense to DE&S and is now directed policy?

You might be forgiven for thinking that when all these N American contracts were placed that recognition of the need to regularly interact, review and assess them might realistically require physical attendance at design reviews and requirements tests, which might be expected to cost money. So what happened to that assumption?

That is just a small part of the process, but it is indicative of the whole, and if simple common sense things liek that are mishandled so badly, then how is their any confidence that the bigger issues are managed any better.

You might also want to consider the line about equipment delivered and cross reference it with equipment delivered that meets the capability required, at which point I give you VIXEN and VECTOR.
 
#3
MOD waste? The report must be flawed! Lets put a team of civil servants on the case and maybe in 15 years time we may have some answers.
 
#4
I have it on very good authority that 48 hours before Hutton resigned he agreed in principle to cancel A400M, then Airbus went ballistic and in the melee Hutton resigned. He was a very good Defense Secretary. A huge loss.
 
#5
Pasty Boy said:
The Sunday Times: http://www.timesonline.co.uk/tol/news/politics/article6806498.ece

A DEVASTATING official report suppressed by ministers has revealed that soldiers’ lives are being put at risk by “endemic” failures at the Ministry of Defence (MoD).

The secret dossier blames “political fudge” and Whitehall incompetence for the plight of soldiers in Afghanistan who are provided with inadequate frontline kit.

The 296-page report, leaked to The Sunday Times, claims the scale of MoD bungling is so severe it “is harming our ability . . . to conduct difficult current operations”.

The publication of the document will be a severe embarrassment for Gordon Brown, who has insisted that the armed forces always receive the equipment they need.

Today’s projects, the report says, are over budget by £35 billion and arrive five years later than expected.

The author of the report, Bernard Gray, a leading businessman and former special adviser to Labour defence ministers, writes: “How can it be that it takes 20 years to buy a ship, or aircraft, or tank?

“Why does it always seem to cost at least twice what was thought?

“Even worse, at the end of the wait, why does it never quite seem to do what it was supposed to?”

He says the MoD department in charge of procurement is so incompetent that it should be privatised.

The report was commissioned by John Hutton, who resigned as defence secretary in June, and was due to have been published last month. However, Hutton’s successor Bob Ainsworth, backed by the prime minister, decided to bury it after ministers were plunged into a damaging row with General Sir Richard Dannatt, the recently retired army chief, over equipment shortages.

Dannatt claimed that a lack of helicopters and other kit had restricted operations in Afghanistan, where the British death toll has now reached 206.

The Gray dossier says that nimble enemies such as the Taliban “are unlikely to wait for our sclerotic acquisition systems to catch up”.

His criticisms are all the more devastating for their plain language, rather than the usual serpentine civil service euphemisms.

“The problems, and the sums of money involved, have almost lost their power to shock, so endemic is the issue,” writes Gray. “It seems as though military equipment acquisition is vying in a technological race with the delivery of civilian software systems for the title of ‘world’s most delayed technical solution’. Even British trains cannot compete.”

Gray argues that the MoD has a “substantially overheated equipment programme, with too many types of equipment being ordered for too large a range of tasks at too high a specification”.

He concludes that in the long term “the programme is unaffordable on any likely projection of future budgets”.

He accuses Labour politicians of failing to make the necessary “difficult choices” on defence spending and of overestimating the limited capabilities of British forces.

Gray calls for legislation forcing defence ministers to hold full-scale defence reviews every four or five years and criticises Labour ministers for their failure to hold a strategic defence review since 1998.

“In corporate life, no enterprise would persist with a 12-year-old strategy without at least reevaluating it fully on a regular basis,” he writes. “Few who would expect to prosper would even try to do so.”

He also warns that delays in shipbuilding programmes have meant that over the past 20 years the UK might have been unable to fight a Falklands-style conflict.

“We would have risked significant casualties, the very significant costs of acquiring adequate equipment at short notice (if available) or the embarrassment of not fighting at all.”

Gray acknowledges that his proposals will be seen as controversial and predicts the defence establishment may try to sit on his findings. “Vested interests will not welcome these changes and may seek to undermine them,” he writes.

Liam Fox, the shadow defence secretary, said: “Labour has created a defence black hole which is not only impacting on current operations in Afghanistan but threatens to provide an ongoing defence crisis for years to come.

“On top of this, this government of fear and smear refuses to publish an important and distinguished piece of work, simply because it points out the serial incompetence of Labour on defence. This report must be published in full.” A spokesman for the MoD said: “John Hutton commissioned a review on acquisition reform from Bernard Gray because we want to ensure that we are buying equipment as efficiently as possible.

“This report is currently in draft format and we are working hard with him on the issues he has identified.”
Also: http://news.bbc.co.uk/2/hi/uk_news/8216556.stm

Not exactly ground-breaking news but an interesting development in this issue. From my short time in procurement I can agree with the incompetency charge. Will this report ever see the light of day publically? Will anything change? Would privatisation work? We all know that Labour has failed the Armed Forces and that failing to have a serious review in 11 years is a failing, however would a forced review every 4 yrs be a good thing or would we spend too much time chasing our tails from the last one?
He was doing so well until he thought privateisation was the way a head.

How would this help? PFI on bombers perhaps?

Why do we ALWAYS wait for a massive project to be absolutely needed, and needed now?

We know how many (for example) SSN & SSBNs s we need (we currently have 4 bombers and 9 attack) so surely a quick chat with the shipyards oop north and we have one new shiny sub sliding down the rails every couple of years.

It appears we need about 4 years for construction and commisioning, and the average operational life span seems to be about 30 years for bombers about 35 for Fast Attack. So if we add on to that a "out to pasture" phase, so we always have a reserve that could be called back in time of need.

We should aim to have a new nuke entering service every 4 years for Fast attack, and a new bomber starting to stealthily scare our foe every 7.

Pretty sure the ship yards would be happy with a nice sleek hull in two of their workshops, on a permenent basis.

Mods could then be carried out on each of the boats independently, with new classes being designated every full revolution of boats, or when the Admiralty deemed fitting.

Frigates and Destroyers could be dealt with the same way.

Helis and planes should be able to be similarly constructed, although (strangly) the numbers may not permit it, as we don't need that many I doubt we'd be able to keep a production line at full capacity.

The Israelis seem to do a similar thing with their Merkavas, they are rolled off their production lines, with constant small mods carried out (some mods are then implemented on in service vehicles).

At due points they redesignate the vehicle ie a Mk4 becomes a Mk 5, when the vehicle rolling of the production line has 5 major differences to the original Mk 4.

Surely good for the Armed Forces and good for British Industry? We could make sure that experienced hands go back to advise the builders.

After a suitable contract that prevents "advisers" being paid by anybody but HMAS. (Civvie "advisers" could be added on to a reserve list with the manufacturers paying the MoD, who then pay the "consultant".
 
#6
MOD procurement waste and incompetence? Surely not!

This would be the same MOD that delayed starting Apache pilot training because they assumed that the WAH-64 programme would be over budget and a few years late as was the way with all MOD programmes.

Alas, Boeing and Westland were churning them out the door on time and budget. Seems no one in charge of the progamme had noticed that Boeing were rather good at turning out AH-64's after a decade of practice and nearly a thousand builds.
 
#7
I think if you talk to anyone in the MOD nowadays, there is a clear acceptance that we have huge challenges in front of us. These are caused, in no particular order, by the following:

1. Lack of Strategic Defence Review since 1998, while prosecuting two campaigns. This has meant our source of doctrinal guidance is totally out of date, but we are still driven to procure kit iaw guidance.

2. Lack of money meaning the Equipment Programme (EP) is constantly being restructured to meet the demands of Yr1-4 challenges (in other words delaying stuff now to save money) but the delay built in increases costs. More money now to solve the yr1-4 problem makes life a lot easier.

3. Utter political cowardice from preventing us from cancelling a Cat A project, and rebalancing the programme. Cowardice which stems from No 10 directly.

4. The weakest ministerial team in the history of the MOD, who are simply not up to their briefs. Certain members of whom are currently more concerned with briefing against the CGS and not supporting him.

5. The focus on delivering UORS (which the department does very well at doing) means that the less current procurement projects are not getting the staff they require to see a job through. Instead staff are being redeployed to meet operational needs, and mainstream projects suffer.

6. The lack of career prospects for MOD CS procurement staff meaning the experienced ones are walking. this is set against the fact that the Armed Forces move people on too often, so there is no continuity in post.
 
#8
jim30 said:
I think if you talk to anyone in the MOD nowadays, there is a clear acceptance that we have huge challenges in front of us. These are caused, in no particular order, by the following:

1. Lack of Strategic Defence Review since 1998, while prosecuting two campaigns. This has meant our source of doctrinal guidance is totally out of date, but we are still driven to procure kit iaw guidance.

2. Lack of money meaning the Equipment Programme (EP) is constantly being restructured to meet the demands of Yr1-4 challenges (in other words delaying stuff now to save money) but the delay built in increases costs. More money now to solve the yr1-4 problem makes life a lot easier.

3. Utter political cowardice from preventing us from cancelling a Cat A project, and rebalancing the programme. Cowardice which stems from No 10 directly.

4. The weakest ministerial team in the history of the MOD, who are simply not up to their briefs. Certain members of whom are currently more concerned with briefing against the CGS and not supporting him.

5. The focus on delivering UORS (which the department does very well at doing) means that the less current procurement projects are not getting the staff they require to see a job through. Instead staff are being redeployed to meet operational needs, and mainstream projects suffer.

6. The lack of career prospects for MOD CS procurement staff meaning the experienced ones are walking. this is set against the fact that the Armed Forces move people on too often, so there is no continuity in post.
Civil Servant in "It's not our fault shocker."

While you make some valid points;
It says the report's author Bernard Gray, a former government adviser, has called the problems "endemic".
 
#9
PE4 - Where did I say "its not the CS fault"?

If you talk to anyone senior in the Department today, then they openly acknowledge we're in dire straights. My point was to set out the wider circumstances that lead to things going wrong though. Its not about a bunch of lazy CS sitting around doing **** all, its about the legacy of a system that has been underfunded for over a decade, and asked to fight two wars while simaltaneously make savings.
 
#10
PE4rocks
Code:
Civil Servant in "It's not our fault shocker."
No a civil servant who has shown repeatedly that he a) knows what he's talking about and b) gives a shit about how it effects the forces telling it precisely how it is and probably being far more candid than he should have been.

That doesnt mean of course that the 25,000 people in DESO are doing their job sensibly but 8,000 of them are not civil servants and they're not immune from cocking things up as has been amply shown by Nimrod and the Chinook fiasco
 
#11
jim30 said:
PE4 - Where did I say "its not the CS fault"?

If you talk to anyone senior in the Department today, then they openly acknowledge we're in dire straights. My point was to set out the wider circumstances that lead to things going wrong though. Its not about a bunch of lazy CS sitting around doing * all, its about the legacy of a system that has been underfunded for over a decade, and asked to fight two wars while simaltaneously make savings.
In points 1,2,3,4,5 and 6, or have I misunderstood?
 
#13
Remember the Nimrod AEW?...Years behind & millions over budget & in the end we ended up buying the Boing E-3 Sentry anyway,then the was the Tornado F-2(now F-3),Also introduced to compliment the Nimrod & flew with a 'Blue Circle' radar because the Foxhunter radar was haveing 'teething probems', despite RAF aircrew who went on exchange tours with the USAF preferring the F-15.
Then we had the E-2000 Eurofighter Typhoon,again millions over budget & years late & the Nimrod MR4,millions over again & doubtful this time if it'll enter service,again the same with the F-35 & associated new aircraft carriers.
One has to wonder how much money would have been saved by buying off the shelf equipment & adapting it to UK needs?..
 
#14
Code:
So you are blaming uniforms then Mick? Nice one.
I am not blaming uniforms generally. I'm just pointing out that it is a misperception to think it is always down to civil servants
 
#15
There's a lot of 'something is wrong' quotes, but no 'this is how to fix it' quotes.

Privatisation, well there are very few companies who could take on the work, and the minute that's done you either have a conflict of interest, or you have a company doing both the buying and selling. Also, what happens to the thousands of service personnel if DE&S go private, do their posts transfer, or do we lose all that expertise and knowledge?

As i've said before, there are problems, they need to be fixed and quickly, but very little seems to be getting done at a higher level, leaving those in DE&S having to follow guidance as stated by Jim30, maybe instead of all the reports and thinktanks the government will come up with an actual plan to fix the problems, but i won't hold my breath, i expect we'll get another McKinsey assessment or another private company coming in and telling us the problems that need fixing, then charging tens of millions for them to come up with some new policy that will again only cover a small area, not the wider procurement cycle.
 
#17
from the times

In 2002 the Dutch government resigned when a report found it had sent soldiers into combat without the necessary equipment. It says much about the prime minister that his only response has been to suppress the report.
 
#18
spike7451 said:
ice,again the same with the F-35 & associated new aircraft carriers.
One has to wonder how much money would have been saved by buying off the shelf equipment & adapting it to UK needs?..

Probably quite a lot, but the NIH stamp is a powerful weapon wielded with alacrity.
 
#19
One step the MOD should take is to employ "civilian personnel" under completely new arrangements. By withdrawing from the civil service completely, we could in effect set up a 4th service which works solely within and for the MOD. This service could have pay scales similar to military, with proper equivalency across the ranks, but also have money in it for a proper bonus scheme tied to long term project success. Reporting could be harmonised with military counterparts, which would in effect actually deliver some value - promotion would be linked to consistent performance over a period of years, along with educational attainment in areas of required competency for the next grade. You could even send some of the MOD Civilians on ICSC and ACSC - especially those working within the R&P world.
 
#20
Argee2007 said:
There's a lot of 'something is wrong' quotes, but no 'this is how to fix it' quotes.

Privatisation, well there are very few companies who could take on the work, and the minute that's done you either have a conflict of interest, or you have a company doing both the buying and selling. Also, what happens to the thousands of service personnel if DE&S go private, do their posts transfer, or do we lose all that expertise and knowledge?

As i've said before, there are problems, they need to be fixed and quickly, but very little seems to be getting done at a higher level, leaving those in DE&S having to follow guidance as stated by Jim30, maybe instead of all the reports and thinktanks the government will come up with an actual plan to fix the problems, but i won't hold my breath, i expect we'll get another McKinsey assessment or another private company coming in and telling us the problems that need fixing, then charging tens of millions for them to come up with some new policy that will again only cover a small area, not the wider procurement cycle.
The whole thing needs speeding up. Projects are left for years, and during their "life" they end up being tweaked and played with.

Each of these tweaks involves more delay and costs (sometimes massively so).

We need a system that can decide on a requirement and implement the solution. Once the requirements are set, that should be it... sh1t bust.

We'll worry about mods when the kit comes out.

9/10 the solution is there already.

CVR (T) diesalisation or a whole new vehicle fleet?
 

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