House of Commons - Defence

Select Committee on Defence Tenth Report

BOWMAN

•  Initially a competition, but since 1996 a single supplier.

•  A UK national programme.

•  Programme's first approval by the MoD: 1988

•  Originally planned in-service date: 1995

•  Latest estimate of in-service date: late 2003/early 2004

•  Cost: c. £2.5 billion

41. The Bowman programme is intended to provide the armed forces with a secure and robust data and voice communications system for land operations, and will replace the existing Clansman combat radio and the headquarters infrastructure elements of the Ptarmigan trunk system.[161] It consists of VHF and HF digital radios, a management information system to control frequencies and complex over-the-air "re-keying cryptographic protection systems".[162] Once available, it will provide the primary means of voice and data communications for mobile tactical level operations, linking radios carried by infantrymen, tanks, helicopters and warships through a 'local area sub-system'.[163]

42. Its progress has been woefully slow, however, since the MoD first defined its requirement in 1988.[164] Early studies found that intended systems to replace Clansman would not be able to carry the communications traffic of future operations in a 'digitised battlefield'—in particular the increasingly important data transmissions.[165] The programme therefore had to be expanded to meet these developing needs, with a local area sub-system, an additional High Capacity Data Radio and computer terminals added to the requirement.[166] In 1996 the then competing consortia merged, leaving the MoD to deal with only one bidder. In dealing with the complexities of the technologies and the problems over competition, the planned in-service date has regularly slipped, and is now running eight years behind its original schedule:[167]

Reassessments of the programme	Expected in-service date
Programme first endorsed (1988)	December 1995
After initial feasibility studies (1993)	June 1999
During Project Definition Studies	April 2001
At end of Project Definition (1996)	March 2002
Reassessment of technical risks (December 1999)	'Late 2003/early 2004'[168]

43. We have taken evidence from CDP on the Bowman programme on a number of earlier occasions, including during our inquiries into the lessons of the Kosovo campaign and the MoD's annual reporting cycle,[169] and he has made his growing exasperation with its poor progress very plain. He summed things up when he gave evidence to us in January this year, when he said that he was not proud of the MoD's record on Bowman.[170] As we illustrated below, Bowman remains a very good example of the antithesis of smart procurement—with over-ambitious requirements, inadequate competition and a lack of clear leadership (though on industry's side more than the MoD's). Clansman before it suffered some of these same deficiencies.[171] There are a number of recent developments, however, which together may prove to be a turning point in the Bowman programme, which we explore further below:

the separate procurement of a non-secure Personal Role Radio to give some earlier improvement in communication capability (initial delivery is expected by the MoD at the end of 2001[172]).

a reduction of the functionality sought for the Bowman system.[173]

seeking submissions from potential competitors of the existing prime contractor (Archer Communications Systems Ltd), which if necessary could allow the MoD to initiate quickly a new competition for the programme.[174]

The Personal Role Radio

44. Clansman involved old-fashioned radio technology. Indeed a report by a previous Defence Committee in 1981-82 highlighted the delays in introducing Clansman which meant that it was based in part on research and technologies dating back to the early 1960s.[175] The plus-side of this basic technology is that Clansman can continue to be maintained until Bowman is introduced, although because it lacks physical robustness this involves some cost in terms of support and repair effort.[176] To replace the Clansman radios before the delivery of the mainstream Bowman system, the MoD is now running a competition to produce nearly 44,000 'Personal Role Radios' for the infantry. They will not greatly improve capabilities—their transmissions will not be encrypted[177]—but they will be an improvement on Clansman's poor reliability and maintainability.[178] In the street-fighting and similar operations envisaged for its use, where the operational value of intercepted data quickly diminishes, the new radios are intended to provide a less expensive and early contribution to part of the Bowman package.[179]

The Changing Bowman Requirement

45. The fundamental requirement for Bowman—a secure communications system as a basis for a digitised network—has not changed since the programme was launched 13 years ago.[180] The National Audit Office's recent report on the financial management of the military operations in the Kosovo campaign highlighted the weaknesses of the MoD's existing operational communication systems that still needed to be resolved, including the low capacity of the Ptarmigan system for handling data transmissions[181] and the insecurity and unreliability of Clansman equipment.[182] (Our own inquiry into Operation Allied Force, also examining the performance of defence equipment and weapon systems, will be published soon). Recently, however, the functionality sought for some of Bowman's component parts has been reduced by the MoD—ruggedised computer terminals will now be acquired off-the-shelf, Bowman will be certified to less stringent US Military Build Standards rather than MoD standards, and more limited protection against jamming and interception of transmissions will now be accepted for some types of radio.[183]

46. Our MoD witnesses sought to allay our concerns about accepting such reduced capability and protection for communications. The communications market, and the technological capabilities it provides, has been advancing rapidly and will continue to do so.[184] Admiral Blackham also highlighted the fact that Bowman was envisaged originally in the Cold War and not surprisingly Bowman's requirements had changed since then.[185] In terms of protection for communications, for example, the impact of interception varies with different types of operation, with data used in street fighting having value to an enemy for only a short time.[186] On this basis, the MoD is acquiring the non-secure Personal Role Radio (paragraph 44). For systems needing protection, however, the MoD told us that it would be looking continually to upgrade the cryptological chips in the radios to retain their effectiveness.[187] Against that background, CDP asserted that the lower resistance to jamming now being sought was still satisfactory—

188

47. CDP acknowledged that some of the reductions in the requirements sought were the result of challenging those who had set them without full regard to the costs involved. Some requirements were clearly unnecessarily high, such as seeking communication equipment for Warriors to withstand more shock that the vehicle itself was meant to withstand, and seeking the safeguards necessary to carry top secret transmissions when the system will be used by TA soldiers who are not cleared to that level anyway.[189] As a result of such cost/capability trade-offs, Admiral Blackham assured us that, as it now stands, the Bowman requirement satisfied the Army's needs.[190] CDP told us that he would—

191

The interaction between my staff telling Admiral Blackham's staff what it costs, and their understanding ... of the operational capability that is required, has produced a sensible adjustment of the specification in a number of areas. [192]

48. It is clear to us, however, that part of the picture was also the MoD's concern with wider trade-offs, in balancing investment in Bowman and other areas of military capability. As Admiral Blackham put it, the MoD—

193

What I have to do is make a judgment as to what the right balance is across a whole range of systems and capabilities. It would be foolish of me, irresponsible of me, and silly to specify a system which left our people unable to do their work or at excessive risk, and we do not do that.[194]

49. The requirement had thus been adjusted to make the solution affordable,[195] and the cost of meeting the newly defined Bowman requirement will be "significantly less" than for the originally specified requirement.[196] The MoD's ability to reduce the expected cost of Bowman, however, by about 30%,[197] was not in our witnesses' view evidence of past gold-plating on the requirement. Some of the saving was the result of the leverage now being exercised on Archer,[198] which we discuss below, and the MoD now believes it has a better understanding of the costs of some of the components of the Bowman system which prompted a deeper assessment of whether particular capabilities still had the same priority.[199]

50. It is of course right to keep the requirements of equipment programmes under review, and to shape decisions which reflect the most cost-effective results of trade-offs between cost, time and capability, and to avoid gold-plating. It is important that projects are kept relevant and affordable, and it is remarkable that Bowman's requirements have been established without close regard to their practicality or cost. The recent creation of the Equipment Capability organisation under Admiral Blackham gives the MoD the structure to ensure the necessary trade-offs are now addressed more directly. Such scrutiny of requirements needs to be cautiously applied, however, and should not run the risk of fielding systems which ultimately bring only marginal enhancements to the capabilities of the equipment they are intended to replace. In Bowman's case, we were glad to have the MoD's assurances that the revised requirement still fully meets the needs of the Army. The MoD must however guard against reducing the capabilities sought for the new communications systems (in order to make its delivery more assured), if the result is a capacity with a functionality little advanced from its predecessor or unable to counter the new and sophisticated communication threats it will have to deal with.

Competition

51. Apart from the technical difficulties of Bowman, the programme has also suffered from an absence of competition since two of the bidders—the 'Yeoman' and 'Crossbow' consortia—merged in 1996 to form Archer Communications Systems Ltd,[200] who, we were told, had not subsequently taken the project sufficiently seriously[201] or provided it with a clear leader.[202] CDP had tried to prevent Yeoman and Crossbow joining up, but in the end he had no means to prevent it.[203] Archer is now a joint-venture owned by three shareholders—BAE Systems, ITT and Racal[204]—who each have their own interest in securing orders from it.[205] The shareholders were the source for many of the bids for the components of Bowman,[206] producing what CDP called a "real tablecloth tugging exercise"[207] as they each sought to satisfy their shareholders rather than focus on what was best for Archer as a whole.[208]

52. With no competition in the running, the MoD's capability to discipline Archer has inevitably been curtailed. After the bidders merged the MoD's strategy was to deal with Archer by applying NAPNOC (No Acceptable Price, No Contract) scrutiny procedures, in particular to the systems integration work packages, and to require sub-contract tasks to be competed openly.[209] In this way, the MoD had believed that 10% of the value of the Bowman contract would be subject to NAPNOC and 90% exposed to sub-contract competition.[210] The MoD could not force Archer to put its work out to competition, however, and in its 1997 Major Projects Report the National Audit Office found that NAPNOC would instead be applied to 28-30% of the value of the work.[211] Our current inquiry shows that the MoD now expects only 60% (rather than 90%) of sub-contracts will be subject to competition.[212] The MoD is nevertheless continuing to work closely with Archer to foster as best it can a full and open competition for the different Bowman components, including having staff embedded in the firm to help assess sub-contract competitions and to compile and scrutinise costings for Archer's overall bid (being prepared as part of its risk reduction contract from the MoD).[213]

53. Without the disciplines of a competitive environment Archer had not performed well, and until recently had failed to give the Bowman project the management leadership needed to overcome the technical and contractual challenges.[214] When he gave evidence to us in January, CDP therefore welcomed the then recent elevation of BAE Systems to the management leadership role within the Archer consortium.[215] The "acid test" for the new leadership was going to be the selection of the VHF radio for which ITT and Racal were competing.[216] Last month, he told us that the change in leadership had "completely electrified the performance of Archer".[217] Six months before, Archer had been seen as "a mile away" from being able to reach a decision on the VHF radio, but they did subsequently select a winner and the other shareholders were able to "take it on the chin".[218] CDP ascribed some of the more focussed management that he detected in Archer to the merger of BAe and Marconi Electronic Systems, which had allowed the new BAE Systems company to bring in much greater competence in electronic systems.[219]

54. The MoD needs to see such new promise translated into a technically credible and affordable Bowman system. Archer remains the Department's preferred contractor[220] but the MoD will not let a contract with Archer until it produces a "rational, technical proposition".[221] The current risk-reduction work being done by Archer is aimed at giving the MoD sufficient assurance on the proposed system's performance, delivery timescales and cost before giving it 'main gate' approval. That work includes efforts to shave at least another £100 million (around 5%) off the cost, to bring it within the MoD's budget.[222] In the meantime, however, CDP told us that the MoD was not prepared to sit on its hands hoping for the best,[223] and at the beginning of this year it had issued £0.5 million contracts to potential alternative providers for Bowman—Computing Devices Canada and Thomson-CSF (now also the owner of Racal[224])—to produce their own proposals to meet the requirement.[225]

55. The MoD has asked these two firms to provide information on how they would satisfy the full Bowman requirement, and their estimate of the cost,[226] but we were told that these were not at this stage formal bids. CDP explained—

227

It is only if we decide not to go with Archer that we would then launch a formal competition, and this work we are doing now is helping us to prepare a competitive specification and to assess whether Computing Devices Canada and Thomson-CSF are reasonable propositions for undertaking a competitive solution.[228]

56. CDP set out the timetable for the next few steps. Computing Devices Canada and Thomson-CSF were due to submit their proposals at the end of May 2000,[229] and Archer their new proposals at the end of June, based on the results of the risk reduction work they are currently doing under MoD contract.[230] The MoD will then decide whether to proceed with Archer's bid,[231] and if so the next stage would be their confirmation of their bid by the end of September, allowing a recommendation to be given to Ministers before the end of this year.[232] Archer would have only 21 days' grace to remedy any failures to meet these milestones.[233] If on the other hand Archer's proposals are unsatisfactory at any stage, the alternative proposals (if satisfactory) would be immediately used to launch a competition between those two firms.[234]

57. In giving itself an option of launching a new competition, the MoD now has a sound strategy for putting Bowman back on track—the disappointment is that the Department had not resorted to this course sooner. The constant changes and delays in the programme so far have had damaging effects not only on the armed forces but on the potential suppliers of equipment, and their employees in turn, for whom the lack of firm future work has resulted in staff being laid off. The prospect of a new competition appears to have been a factor in Archer's improving performance over the last few months.[235] If Archer's proposals do not cut the mustard, the MoD should run a new competition without delay. The consortium has not earned any right to merciful treatment by its performance so far.

IN-SERVICE DATES

58. The anticipated in-service date for Bowman—now 'late 2003/early 2004'—will only be settled more precisely once a contract to produce it is in place.[236] The in-service date has been defined since 1998 as the date when 'a brigade HQ and two battlegroups are equipped and capable of deploying on operations other than war'[237]—the sort of force needed for Bosnia, Kosovo and Sierra Leone[238] rather than a bigger divisional deployment that might be used in high intensity warfare.[239] Full delivery is expected to be over the period 2003-2010, as army units are rotated through the stages of the formation readiness cycle.[240] CDP told is that the contract would have very clear requirements to demonstrate Bowman's performance on the large scale for which it is intended to be used, without which the contractor would not be paid.[241]

59. Admiral Blackham explained that when his organisation came together last year, drawing together staff from the three Services, it inherited a range of definitions of in-service dates. The Equipment Capability organisation was now examining whether a common basis for defining in-service dates can be devised, which would revolve around the ability to deploy the equipment on operations.[242] The new in-service definition for Bowman follows this line,[243] as does the date for the Type-45 destroyer, examined below. We welcome the new approach to the definition of in-service dates being adopted by the MoD, and we recommend that it be universally applied, including to Eurofighter whose in-service threshold is currently defined by the wholly misleading criteria of the delivery of the first aircraft by the manufacturers (paragraph 11).

161 Ev p 49, introductory para Back

162 Q 200 Back

163 Ev p 49, para 1 Back

164 Ev p 49, para 2 Back

165 ibid Back

166 ibid Back

167 Ev p 50, para 8 Back

168 HC Deb., 21 December 1999, c468w Back

169 Minutes of Evidence, Lessons of Kosovo, Session 1999-2000, HC 347-iv; Second Report, Session 1999-2000, op cit Back

170 Second Report, Session 1999-2000, op cit, Ev p 95 (Q 522) Back

171 Second Report, Session 1981-82, Ministry of Defence Organisation and Procurement, HC 22-I, para 131 Back

172 Ev p 50, para 9 Back