The Defence Committee has agreed to the following
MAJOR PROCUREMENT PROJECTS
1. This is the third of our annual inquiries examining
the progress of a selection of major equipment programmes, as
- Future Aircraft Carrier (CVF)
- Future Carrier-Borne Aircraft (FCBA)
- Type-45 destroyer
- Ro-Ro strategic sealift
- Bowman communications system
- Tactical Reconnaissance Armoured Combat Equipment
- Beyond Visual Range Air-to-Air Missile (BVRAAM)
- Advanced Short-Range Air-to-Air Missile (ASRAAM)
- A400M and C-17 strategic lift aircraft
2. Each year we have focused on those programmes
at particularly important stages in their development. Thus in
our first report
in the series we examined the then recent collapse of the collaborative
'Horizon' frigate programme and its replacement by a national
Type-45 destroyer programme, as well as the vessel's PAAMS missilethe
other major component of the aborted Common New Generation Frigate
programmewhich was to continue. Our second inquiry
focussed on the Beyond Visual Range Air-to-Air Missile (BVRAAM)
for the Eurofighter and strategic air-lift, the competitions for
which had then just been decided, and the Bowman communication
system whose competition was on the brink of having to be relaunched.
3. In our latest inquiry we received a further memorandum
from the MoD summarising the state of play with our ten tracker
and we took oral evidence on 2 May 2001 from Sir Robert Walmsley,
the Chief of Defence Procurement, and Vice-Admiral Sir Jeremy
Blackham, Deputy Chief of Defence Staff (Equipment Capability).
On this occasion we have reviewed progress on: the Future Aircraft
Carrier and its Future Carrier-Borne Aircraft; the Advanced Short-Range
Air-to-Air Missile, intended for the Eurofighter and other aircraft;
the Roll-on Roll-off ships providing a strategic sealift capability
by means of a Private Finance Initiative programme; and enhancements
to the UK's precision-guided bombing capability in the light of
the lessons drawn from the Kosovo conflict.
The Future Carrier Force
4. Our examination of the witnesses focussed on currently
critical issues for each of these programmes. On the Future Carrier,
the MoD was about to launch the second phase of the Assessment
development programme, and there had been reports that BAE Systems
(one of the two competing consortia) had offered an alternative
timetable for that work which would increase its scope and duration.
This proposal potentially had implications for continued competition
for the project. This was also a good opportunity to review the
progress of the collaborative US/UK Joint Strike Fighterthe
MoD's preferred candidate for the Future Carrier-Borne Aircraftafter
the MoD had signed up to the next phase of the aircraft's development
in January 2001.
As the Chief of Defence Procurement pointed out, the aircraft
is the more complex and expensive aspect of the package that goes
to make up the future carrier force.
We therefore questioned our MoD witnesses, in particular, on:
- The basis for the MoD's decision to continue
with the next phase of the Joint Strike Fighter development programme,
and the grounds for the selection of that aircraft as the preferred
solution for the Future Carrier-Borne Aircraft.
- Progress with the JSF programme, and the United
States' commitment to it.
- UK national requirements in the Joint Strike
Fighter programme, and their potential cost.
- The relative advantages for the UK of the two
possible variants of JSFa 'Short Take-Off and Vertical
Landing' aircraft, and a 'Conventional' carrier aircraftand,
if both remain available, at what point a decision needs to made
about which to pursue.
- The requirement for two carriers, their affordability
and their expected in-service availability.
- The progress achieved with the carrier's Assessment
studies, being undertaken by the two competing bidders.
- Representations from industry about how the second
phase of those studies might be taken forward, and the MoD's view
on the way ahead.
- The interaction of the carrier and aircraft programmes,
and their relative risk.
5. We also discussed the latest position on the MoD's
plans for maintaining competition on the Type-45 destroyer programmeanother
project in which BAE Systems had reportedly raised the possibility
of dispensing with competition for the remaining work.
The MoD's review of procurement strategies for naval work, currently
underway, will affect both the Type-45 and Future Carrier programmes.
We would expect that that review 
will feature in our successors' deliberations.
6. We recently received information about technical
problems with the Advanced Short-Range Air-to-Air Missile that
had prevented the MoD accepting it from the contractor.
At that stage, the programme was already running two years late,
and the new difficulties mean that a further delay in its now
overdue in-service date would have to be set after a recovery
programme had been devised. We accordingly questioned our MoD
- The scale of the problem encountered with the
missile programme, where the fault lay, and the remedial action
- The reporting of ASRAAM's likely performance
in the Major Projects Report, and possible lessons for the way
equipment programmes' capability is evaluated in that annual document.
- Lessons that might be drawn from the difficulties
encountered in the ASRAAM programme for application to the 'Beyond
Visual Range Air-to-Air Missile' to be procured from the same
7. We examined the witnesses on the Ro-Ro PFI programme.
The MoD selected Andrew Weir Shipbuilding as the preferred bidder
for this PFI contract, which will entail four ships being build
in a German yard and two at Harland & Wolff in Belfast. However,
the MoD has recently had to take over the contract for the construction
of these latter two vessels, apparently casting doubts on the
progress and viability of the programme and the rationale for
pursuing the PFI route for securing this capability. We questioned
our witnesses on:
- The reasons for the MoD having to take over the
construction contract for some of the Ro-Ro vessels, and the consequences
for the management of the remaining stages of this PFI programme.
- The continued rationale for use of the PFI procurement
route in this case.
Lessons of Kosovo
8. We also reconsidered the equipment lessons of
the Kosovo conflict, picking up some of the conclusions and recommendations
that we made in our report last year on Operation Allied Force.
We questioned our MoD witnesses particularly on:
- Progress with acquiring the Enhanced Paveway
ground-attack weapon to satisfy the requirement for an improved
GPS-based precision-guided bombing capability, and the latest
progress with the delayed Tornado GR4 upgradethe main aircraft
to deploy that weapon system.
- The scope for upgrading or reconfiguring the
MoD's submarine-launched Tomahawk cruise missile capability.
- The need for a review of the types and quantities
of the various precision-guided ground-attack munitions.
9. An aim of our series of major procurement projects
inquiries has been to inform the annual defence equipment debate.
The next debate, however, will now fall in the next Parliament.
To make the oral and written evidence gathered from our latest
inquiry available for that debate, we have decided to publish
it with this brief Report. We had intended to take further oral
evidence from the Minister for Defence Procurement on 16 May,
but the dissolution will now intervene. We hope that early in
the new Parliament our successors will continue the examination
of the issues relating to the programmes on which we have focused
this year. We also hope that our successors will continue our
series of annual inquiries, monitoring progress with the MoD's
more significant procurement programmes and other programmes which
may, from time-to-time, raise particular issues.
8 Eighth Report, Session 1998-99, Major Procurement
Projects Survey: The Common New Generation Frigate Programme,
HC 544 Back
Tenth Report, Session 1999-2000, Major Procurement Projects,
HC 528 Back
Subsequently, the MoD reopened the Bowman competition in June
2000 (Ev p 39) Back
Ev pp 22-68 Back
QQ 1-153 Back
See Fourteenth Report, Session 1999-2000, Lessons of Kosovo,
HC 347, paras 140-157 Back
The UK signed a Memorandum of Understanding with the US in January
2001 to take part in the next stage of JSF development beginning
in October 2001 - 'Engineering and Manufacturing Development'.
This allows UK to take part in the selection of the winning design,
between proposals being developed by teams led by Lockheed-Martin
and Boeing. Back
QQ 56, 66 Back
QQ 2-4, 10-12, 60 Back
QQ 8, 16-17, 59 Back
QQ 5-7, 9, 18-20 Back
QQ 13, 21, 25-27, 57-58 Back
QQ 42-46, 61 Back
QQ 31-39 Back
QQ 47-55 Back
QQ 28-30, 40-41, 56, 63-69 Back
QQ 126-131 Back
Ev p 69 Back
QQ 70-90 Back
QQ 91-97 Back
QQ 98-110 Back
QQ 111-116, 119, 121 Back
QQ 117-118, 120, 122-125 Back
Fourteenth Report, Session 1999-2000, op cit Back
QQ 133-135, 150 Back
QQ 140, 151 Back
QQ 136-139, 141 Back