Select Committee on Defence Eighth Report

4  MANAGING RISK

  55.  Part of the 'Smart Acquisition' initiative (see Part 5 below) involved greater effort being put into the 'assessment' phase of projects, before designs are firmed up (at the 'Main Gate' stage) and before costs and timescales are contracted for, so allowing risk to be identified and managed at the early stages when it is easier to do so. The NAO's report on the Major Projects Report 2002[129] noted that while Smart Acquisition envisages (as a guide) up to 15% of total procurement costs being spent on a project's assessment stage only around 5% was being spent on average, though the trend was rising.[130] For Nick Prest of Alvis-Vickers, risk reduction had been one of the central pillars of the Smart Acquisition initiative, but "there was not the same attention being applied" to it as the others (the other pillars being the creation of the integrated project teams, and empowering leadership and decision-making at lower levels).[131]

  56.  The Defence Industrial Policy identifies this as an area where further improvement is needed. It notes that "we need to manage technological risk effectively. Burdening prime contractors with unmanageable levels of risk will not lead to efficient project performance".[132] Colin Green of Rolls-Royce singled out managing risk as the most important aspect of the Defence Industrial Policy—

If I were to pick out one thing in it that I thought was really good it is the recognition that we need to work together to, first of all, identify risk and then to reduce risk, and then have the appropriate contracting vehicles put in place as that risk is retired together.[133]

  57.  And, for CDP, risk reduction was a core theme of the Defence Industrial Policy.[134] In a list of his short, medium and long-term aims, he included the need for the Defence Procurement Agency—

…to get a much better understanding of the industrial base, a much better understanding of the suppliers, much better understanding of estimating in advance the risks which are being taken-on in any development programme, the right point at which to go to contract, the right way of assessing or attributing those risks and then working out the contracting risk/reward strategies accordingly.[135]

  58.  To explore how a failure of risk management can jeopardise projects, we explored the circumstances that had forced the MoD to renegotiate with BAE Systems its contracts for the Nimrod aircraft and the Astute submarine—perhaps the most significant of such cases in recent years. BAE Systems has suffered financially as the programmes hit difficulties because the contracts were fixed-priced, but the MoD (despite such contracts) has also had to pay more to bring them back on track. Nimrod and Astute have common themes. Both pre-date the Smart Acquisition initiative[136] (see paragraph 86 below). They have the same prime contractor. Both have been delayed because of technical difficulties which have prompted the MoD to renegotiate the development contracts, so that a halt will be called (after the first three aircraft, and after the first submarine) before decisions will be made to continue with the rest of the potential orders.

Nimrod MRA4

  59.  The original contract for the Nimrod MRA4 maritime patrol and anti-submarine/anti-ship attack aircraft was signed in 1996, for the refurbishment of 21 existing Nimrod MR2 aircraft, along with new sensors and other systems. Since then the MoD has revised its requirement down to 18 MRA4s and the contract has been renegotiated three times, most recently in February 2003.[137] In the latest change the fixed-price contract was restructured to a 'target cost incentive fee' contract.[138] The start of production of the bulk of the 18 aircraft, we were told, would be considered after "an appropriate level of maturity that has been proved on the first three aircraft during the flight trials programme". The MoD would contribute a further £270 million on top of the £3 billion budget, while BAE Systems was taking an £800 million charge on its Accounts (£300m in 2000 and £500m in 2002) for losses on the programme. The delay in the programme now stands at four years, with an in-service date of 2009.[139]

  60.  CDP said told us that "the Nimrod MRA4 design challenge was hugely underestimated by industry", perhaps a result of continuing to see the project as if it were the adaptation of an existing aircraft, as it was originally intended to be, when in fact some 95 per cent of the aircraft is new,[140] thus effectively creating a new aircraft. That greater than expected technical challenge required 'engineering concurrency', with design and engineering overlapping with production. The danger from this, Lord Bach told us, was that as production continued, so did the development work, and costs were added.[141] He explained that—

We thought that the only way of stopping this was to make sure there was this production pause [after the third aircraft].

So the production pause…will allow, we believe, the design to reach an appropriate level of maturity before embarking on the main production programme.[142]

CDP elaborated—

…we need to make sure that we build to the right design, otherwise it is going to be even more expensive as we keep on having to modify the production models and keep on re-modifying them in the light of the design not having been finished off. The design maturity had not been achieved. We also needed to make sure that we got the information in terms of flying some of the early aircraft, so we proved the systems.[143]

We have learned that if you drive so hard toward an in-service date that you start to try to build the product before you have finished designing it, you end up in a ruinously expensive iterative process of design changes…Modification on modification on modification is very expensive. That has been at the heart of this.[144]

  61.  With the MoD having negotiated a fixed price contract with the prime contractor to manage the risk of delivering this project, the puzzle is why the firm (and indeed the MoD) so badly miscalculated. The previous Chief of Defence Procurement, Sir Robert Walmsley, told us in January 2002 that from the Nimrod case there were lessons to learn about accepting too readily a bid from industry (BAE Systems in this case) which was going to be too technically demanding to deliver within the cost and time offered.[145] In this current inquiry, Sir Richard Evans (in his capacity as chairman of BAE Systems) perhaps not surprisingly saw the Nimrod case as having lessons for both sides—

…the problem was…'concurrency' where because of the compression on the delivery time scales we really were required to move to production before we had got sufficient stability in design…both sides need to understand as early as possible what the risks are. We need to be able to orchestrate the way in which we contract these programmes in a way that does not inescapably tie-in the purchaser to a programme that, clearly, has got risks that are not being managed out of the design.[146]

  62.  Lord Bach highlighted the lessons of the project in terms of the unsuitability of contractual arrangements used for some high risk projects—

…the balance of risk and reward may not have been perfectly judged. We need to be anti-costs but not anti-profit, and we need to choose contractual pricing mechanisms that best reflect the degree of risk in our major development and production programmes. We think therefore that a target cost incentive fee is right for the restructured Nimrod programme. Firm and fixed pricing arrangements of course very much have their place in our procurement strategy, but they need to be targeted judiciously. [147]

  63.  Having again renegotiated the Nimrod contract, CDP was positive about the programme's future prospects—

…industry and the [MoD] project group are now very much closer in terms of working together on this…There is a very much stronger attention to measuring the risk levels of each of the key components of the technology…There is very much more emphasis being put on identifying some anchor milestones, perhaps two or three each year, which have visibility at board level in the company and at board level at [the Defence Procurement Agency], so that we…can spot the points at which things are beginning to go awry.[148]

…I find it hard to believe that we will get back into those [earlier] circumstances. A contract is a deal between consenting parties and the industrial side of these arrangements has learned that lesson, and very clearly.[149]

  64.  As well as ironing out technical issues, the MoD hopes that the pause after the third aircraft is delivered might provide an opportunity to enhance the Nimrod design to be an "adaptable aircraft".[150] The aircraft might be capable of deep-strike and network-enabling roles, in addition to its originally planned maritime surveillance and attack roles, "building upon the results of experience in Afghanistan".[151] The MoD envisages a possibility that the fourth and subsequent aircraft could have the "new adaptable standard" needed for any such wider capabilities.[152]

  65.  The main problem with the hiatus between aircraft 1-3 and aircraft 4-18, however, is its implications for the BAE Systems work force. In March 2003, the firm announced 1,000 job losses at the four sites involved in Nimrod production, reducing the Nimrod workforce by half.[153] The MoD reported that with the company they were studying the most cost-effective way to bring production of aircraft 4-18 to a "controlled stop".[154] This will have to be very carefully managed. Although the MoD and the firm are considering continuing some low-risk production work to maintain skills,[155] there remains a real risk that vital skills will be lost and will be very difficult to replace. Indeed, the Minister will no doubt draw the lessons from the Astute programme, which we cover below, where he himself attributed that programme's difficulties to a loss of skills—

Industrial capability is [a] point I would like to raise in regard to Astute. It is a long time since a submarine was completed at Barrow… So key skills were lost in the gap before Astute commenced production.[156]

Astute submarine

  66.  The Astute attack submarine programme has also been significantly delayed, showing some similarity to the Nimrod programme. Its in-service date was moved back from 2005 to 2008 as part of the renegotiation of its contract in February 2003.[157] Under that new agreement, BAE Systems will build the first vessel (HMS Astute), and the production of the second and third boats will only go ahead "once confidence in BAE Systems' ability to undertake the work has been established".[158] The MoD has increased its funding for the Astute programme by £430 million (now expected to total £3.6 billion),[159] while BAE Systems have added £250 million.

  67.  As with Nimrod, the problem was one of inadequately managed risk; specifically, the unexpected complexity of using Computer-Aided Design (CAD) tools—"the first comprehensive application of CAD techniques to UK submarines".[160] For help with the CAD aspects, BAE Systems and the MoD will turn to a US submarine designer.[161] Lord Bach explained—

The introduction of computer-aided design was much more difficult, much more troublesome, than we had expected, either by the contractors or by us at contract-award. Transferability from a surface ship design has been of less benefit than expected because of the much more demanding component density and placement accuracy in a submarine. We now know, but we could not have known before, that the US Navy was having a similar experience with CAD with the design of their Sea Wolf submarines ten years ago in the early Nineties. In response, we have facilitated the assistance of General Dynamics Electric Boat Company to provide key design management expertise.[162]

  68.  In many ways, the root causes of Astute's problems had some similarities with Nimrod's. There was again, in particular, a degree of over-ambition in terms of sizing up the technical risks. In the Astute case, however, CDP saw both parties at fault—

The question is: was the ambition we had when the contract was priced misplaced and was the company's ambition in terms of their ability to use Computer-Aided Design Computer-Aided Manufacture too great? I think the answer to both questions is yes.[163]

  69.  There was also, as with Nimrod, a focus on contracting in a way that passed perhaps too much risk to the firm—

We were in an era of believing that we could negotiate very highly incentivised contracts and transfer risk hugely in one direction, and both sides at the time thought it could be done.[164]

…having let highly incentivised contracts in good faith and believing both in industry and in the Ministry that "eyes-on hands-off" here was the way of letting them to get on with it, we discovered, with the benefit of hindsight, that that did not give us enough visibility of progress. The new arrangements which are being put into place have a much more integrated management process with both parties working more closely together, which is easier to do with the target cost incentive arrangements,…than if you have a highly-incentivised, fixed or firm price arrangement.[165]

…if you stand back now, with the benefit of hindsight, and look at the impact we have had on the industrial base, driving some of the very tightly incentivised contracts which we have done, you find that what you actually get is perverse behaviour. We thought we were doing the right thing; we were putting it into context. Moving away from the old cost-plus regime into an incentivised contracting regime, all of which brought huge benefits. But you rarely get ought for nought in life and it brought a down side. The down side is an implicit but unthought through assumption that industry's resources are infinite and they can absorb any risk and that we could transfer total or huge amounts of risk…[166]

If you have something which is really just putting together well-established technology in a slightly different form and you recognise there is very little real technology risk in the programme, you are probably going to be veering towards a more highly incentivised contractual regime. If, on the other hand, you recognise that there are some things which again have to continue to be actively managed because, for reasons beyond your control, you have not managed to get the technology risk down to the levels you want…you get a different pricing regime.[167]

  70.  Another similarity with the Nimrod programme was that under such contract arrangements the MoD had little visibility of the impending crisis in each project,[168] and perhaps more remarkably neither did the senior levels of the firm—

The particularly disappointing aspect of the Astute programme is the fact that the difficulties had not been recognised at the senior levels in the company...since the contract has been let there have been seven different managing directors of the company which was created to run Astute…the metrics which you look for in terms of design and build of submarines, when you do them the old-fashioned way, are easier to spot than when you are putting together a hugely complicated piece of design in computers.[169]

The previous CDP, Sir Robert Walmsley, drew attention earlier this year to the problem of 'must-win' competitions—"which contractor has ever turned away work when asked if they are sure they have the resources to do it?"—which prompted the the Defence Procurement Agency to establish a 'Key Supplier Management System' to monitor the strains within 60 of the MoD's leading suppliers.[170] Such arrangements will play their part in adding early-warning visibility for the MoD.

  71.  And finally, the ambitious timescales meant that with Astute, as with Nimrod, construction and design were being progressed together, and tripping over each other—

They had already started the construction and they realised that the design work was not keeping pace with the construction…[171]

  72.  The problems with Astute, however, also have wider implications for another programme—the Type-45 destroyer. In our procurement report last year, which focussed on that programme's importance in terms of the future of the UK warship building industry, we noted that a RAND study which shaped the MoD's 'block allocation' strategy for building the destroyers warned that scheduling of the construction and delivery of the blocks would have to be closely managed; a block arriving late at the assembly yard at Barrow might have caused significant delays in not only the Type-45 programme but also in the Astute programme.[172] In the event, it was delays with Astute that had an impact on the plans for Type-45, because of the likely congestion between modules of Type-45 destroyers and Astute submarines in Barrow's Devonshire Dock Hall.[173] In March 2003, following MoD agreement to a company request, BAE Systems announced that all of their Type-45 production work planned to be undertaken at Barrow would be transferred to their yards on the Clyde because of the Astute delay.[174]

  73.  If these difficulties were not enough, the Astute programme also depends on the delivery of another programme—the Swiftsure & Trafalgar Update, whose prime contactor is also BAE Systems. Astute submarines will replace existing Swiftsure & Trafalgar submarines, and will include the enhancements of the final phase of the Update (as well as using the nuclear power plant of the Trident submarines.)[175] The final-phase of the Update programme—to give a new sonar ('Sonar 2076') to the four newest Trafalgars—has already been delayed by at least two years,[176] because of technical difficulties experienced by Thales-UK (the contactor for the sonar) with the sonar system's signal and data processing software.[177] A new phased programme was agreed in November 2002 to introduce the capability of the final phase of the Update more gradually[178]—an initial capability on the first of the four boats involved is now expected in 2004, and will then be rolled out to the other three in the following years.[179] Lord Bach however made it clear that risks with this programme at least were less acute—

HMS Torbay…is due to receive the first increment of the sonar 2076 stage-four update during a repair and maintenance period starting in November this year, to meet the in-service date of August next year…I do not see this as a major risk or one of the biggest risks to the Astute programme at the moment.[180]

  74.  We have discussed how the contractual arrangements for both Nimrod and Astute were a significant part of the cause of their difficulties, requiring some renegotiation of the contracts. But given valid contracts, to which the prime contractor freely signed up, why should the MoD not insist that the firm make whatever financial contribution (or loss) is necessary to get them back on track? CDP provided part of the explanation, but only part, when he told us that "if you drive a competition too hard and you get people into position that they spend so much money on bidding that they cannot countenance losing, you actually drive them through competition into a contract which is unsound".[181]

  75.  Perhaps more tellingly, CDP told us in connection with the Nimrod contract—

[Nimrod] was not capable of being prosecuted to completion all the while the company felt that it was exposed to so much financial risk. The whole of the [contract] negotiation centred on the need to enable the company to close down that risk, bearing in mind that they have already incurred big losses which they have declared, in order then to establish the framework in which we could actually start to concentrate on bringing it to completion, as opposed to a mindset which was damage-limitation under the terms of the original contract.[182]

  76.  Lord Bach defended the MoD's extra financial contribution for the two programmes as "a sensible use of taxpayers' money".[183] Those contributions, it seems, reflected the MoD's "acceptance of a share of the responsibility",[184] but it is noteworthy that the figures were agreed before the new financial structures of the contracts were agreed.[185]When we questioned why the MoD should shoulder any blame in this affair, Lord Bach told us—

…I think on Astute we both misjudged, as I say, the influence of the CAD system and I think that is demonstrated by the amount that the Ministry is paying, in order to make sure that this does not happen again, compared to what the company is paying.[186]

…we needed to make sure that, as with Nimrod, confidence was restored in the company that they had actually capped that risk, so they could then get on more positively moving forward to finish off the design of the submarine as opposed to damage limitation…This very damaging period of uncertainty needs to come to an end as soon as it can…[187]

  77.  On one level the MoD could stand by its Nimrod and Astute contracts and insist on delivery by the firm against the terms of those contracts. But the MoD needs those programmes to be delivered, and would have only a hollow victory if its insistence left the programmes stalled. In hindsight, it is clear that the firm discounted its bids by under-pricing its risks—either in error or by being blinded by a must-win determination. If the MoD now has had to renegotiate the contracts in a way which more reliably reflects those risks, then digging into its pockets to rescue these programmes might indeed be a "sensible use of taxpayers' money". It is important, however, that in bailing out the contractor the MoD does not pay more than that earlier unwarranted discount—to do so would send a message that commitments made in firm-priced contracts are in reality little more than a basis for further negotiation at the first sign of trouble .

Future Carrier

  78.  Unlike Nimrod and Astute, the Future Carrier programme involves the MoD having a role in the 'Alliance' team that will produce the vessels, rather than contracting at arms' length. It plans on taking on about 10% of the risk; "a sensible rule of thumb estimate at this stage as to how we feel about it and…a means of making clear the relative weights which will go on the participation of the three components in this alliance".[188] This should allow it to be part of the decision-making process as the Alliance develop the Carrier programme. The other members of the Alliance are BAE Systems (prime contractor), and Thales-UK (designer and 'key supplier').

  79.  We explored how the Alliance model might help in terms of risk-sharing and providing earlier MoD visibility of the programme's progress—two of the weaknesses in the Nimrod and Astute programmes. CDP explained how negotiations were continuing on the Alliance configuration,[189] and described his role as a "marriage counsellor".[190] BAE Systems' chairman pointed out that the Alliance approach has never been done before, and that to make it work there would need to be clear lines of responsibility and accountability between the parties.[191] It was, CDP told us, a relationship which combined the intellectual energy of two companies, based on the results of the MoD's continuous assessment, which gave the MoD—

…more understanding of the risks in this programme than we would have had with any one of [the two firms]. We also have in the aircraft carrier…a very well designed process of identifying the risks of the various components of the carrier and the very clear process of assessing the technology readiness levels…at the point at which we place this contract, the design maturity of the carrier will be more advanced than for any other warship [contract] we have placed… But there is great conscientiousness in looking at all of those things which could go wrong and at what is in place to deal with it, so that at the point at which we place a contract we are confident that the level of risk is containable. Part of the discussion will be the value that industry puts on that risk. If they are not persuaded that the level of risk is containable, then the risk contingency will be unaffordable. We will be very careful to ensure that we get the right sort of balance between a manageable amount of risk when we fire the gun at the beginning of the demonstration and manufacture contract and an affordable amount of contingency to cover those risks, and much greater transparency and involvement between a real integrated team…[192]

  80.  As part of the Alliance, the MoD hopes to be able to work with its industrial partners to "head off the problem, as opposed to trying to react to it after it has happened".[193] CDP cautioned, however, that—

…we are still learning what partnering actually means…It is how we draw up the arrangements to ensure that success rewards each of the [three] components [of the Alliance] equally…Everybody is great friends when it is going well. It is when the thing starts to wobble, when people start to worry about a time or cost overrun, that the test of whether or not you have something different will take place…If it is done properly…they will be too busy solving the problem so it does not degenerate into that. That may sound rather idealistic, but you have to find some way of working more like that more often.[194]

…Where we are all feeling our way a little bit is how to involve the Ministry team in that alliance in a way that everybody knows where the sensible boundaries of responsibility are, and where the liabilities are...It is going to be very important to document that in a way that is unambiguous, so it does not end in tears later.[195]

  81.  When the decision to follow an Alliance approach was announced by the MoD in January 2003,[196] it attracted some scepticism in the press about what seemed to some to be a compromise decision that kept both BAE Systems and Thales-UK in the UK warship market, and then later on concerns about the workability of choosing a prime contractor to deliver another firm's design. We had two briefings from Mr Ali Baghaei, the Carrier's project team leader in the Defence Procurement Agency, which have persuaded us that there is significant merit in this novel arrangement. There may be some very difficult issues to iron-out, which may yet defeat the MoD. But we welcome the way the Alliance model is trying to avoid some of the pitfalls of the Nimrod and Astute programmes.

  82.  In the latter stages of the Carrier programme, the MoD has begun sharing technical data with France. CDP told us that—

We will listen sympathetically to the needs we have got from the French. If there are options open to us, about which we are entirely neutral, which appeal to the French in some sort of way, then it is possible that it would go in a direction which they would find attractive.[197]

They were examining the scope for "co-operation" (not "collaboration"[198]) on a possible second carrier for the French navy. This, Lord Bach told us, was more likely to be on an industry-to-industry basis and directed towards "weapon systems rather that the ship itself".[199] However, although the discussions on the two countries' carriers had expanded recently to include "operational and policy aspects",[200] we welcomed Lord Bach's assurance that the discussions with France would not be allowed to jeopardise the UK Carriers' in-service dates, when he told us that—

I am not prepared for our Carrier programme, which is on a very tight schedule, leading up we hope to signing of contracts quite early next year, to be put back by my officials having to spend too much time on discussions with whoever it may be.[201]

Managing smaller firms at arms' length

  83.  Before the Defence Industrial Policy, and even before the Smart Acquisition initiative, the MoD's approach to managing risk in equipment programmes involved dealing with prime contractors, putting the onus on the prime contractor to manage the risks of integrating components and sub-contractors' input. As we have discussed, the Defence Industrial Policy puts forward a raft of measures for how the MoD will deal with the firms—the prime contractors—from whom it acquires defence equipment. However, as our industry witnesses identified, typically only up to 30% of a project's development and production costs would lie with the prime contractor, with 70% or more typically sub-contracted to second-tier firms.[202] A more stark example of that dividing line is that each of the top five contractors in the aerospace sector, relies on some 1,500 small and medium sized enterprises.[203] Sir Richard Evans told us that competitive pressures on the primes, and its manifestation in seeking efficiency savings and lean manufacturing, is driving prime contractors to reduce the number of suppliers they directly engage, however, causing 'clusters' of suppliers to form around those primes.[204]

  84.  We therefore sought from the Defence Manufacturers Association their perspective on the position of smaller firms in the light of the Defence Industrial Policy and the MoD's focus under Smart Acquisition on prime contractors. Their submission[205] highlighted a number of concerns:

• The focus of the MoD's Integrated Project Teams on the larger ('prime') firms means smaller firms do not have direct communication with MoD project teams. This means added bureaucracy of having to deal with several Integrated Project Teams and prime contractors running projects which smaller firms hope to supply.
• The MoD focus on prime contractors, with the Defence Industrial Policy also centred on providing transparency for the primes, means that "there is no clear MoD mechanism for assessing and influencing…the [sub-contract] procurement decisions of the primes".
• Because of the financial penalties of not complying with the ITAR waiver controls (paragraph 43) smaller firms may choose not to sign up. If that happens, UK primes (who have signed up) may not turn to UK sub-contractors.

  85.  When we asked him about the challenges for smaller firms, Lord Bach was clearly familiar with the issues for small and medium enterprises (SMEs)—

…there is some concern…as to whether Smart Acquisition leaves them out in the cold, particularly in relation to the [Defence Procurement Agency] and the Ministry, in a way that did not happen so much before because of the obligations that we put on prime contractors to be responsible for their own sub-contracting...I am concerned that we do not lose sight of SMEs in the Smart Acquisition process, and I am also concerned, and this is a personal view, that the sub-contractors, small companies, are dealt with fairly always by prime contractors. This, I think, is crucial. There can be a tendency for prime contractors, the big beasts, as it were, to make their sub-contracts go sometimes not necessarily to the places where they ought to go. When small and medium firms write to me and say, …"We are not happy that we were not given a chance in this contract"…I am not prepared to accept the answer [within the MoD] "Well, actually it is nothing to do with us. It is a matter between the prime contractor and yourselves". It is that area where I think we can perhaps start looking carefully at what we do with SMEs. You know that there are codes of practice of course, but the codes of practice of course are toothless and not legally binding. It is essential that if the codes of practice are breached by prime contractors, and I am not saying this happens as a regular thing, but if they are, then I think we should be prepared to take some action against the prime contractors which will affect them. It is keeping that confidence between SMEs and the Department that I consider to be one of my priorities…[206]

We welcome the Ministers' robust approach. Smaller firms provide the essential foundation for the UK defence industry, and the MoD must ensure it considers the implications for such businesses as it develops its procurement processes and policies, including efforts to make it more 'agile'. In our future inquiries we will ask the MoD how being part of the prime contacting 'alliance' in the Future Carrier programme might have given it a clearer perspective on life for the second-tier firms with whom the alliance will be dealing.

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129   Report by the Comptroller and Auditor General, Major Projects Report 2002, Session 2002-03, HC 91 Back

130   Ibid, paragraph 2.9 Back

131   Q101 Back

132   Defence Industrial Policy, paragraph 23 Back

133   Q 3 Back

134   Q 117 Back

135   Q 111 Back

136   Q 219 Back

137   Ev 91 Back

138   The 'Target Cost Incentive Fee' approach allows savings/over-runs to be shared, by an agreed formula, between MoD and the service provider. Back

139   Ev 91 Back

140   Q 219 Back

141   Q 218 Back

142   Ibid Back

143   Q 170 Back

144   Q 166 Back

145   Second Report, Session 1999-2000, Ministry of Defence Annual Reporting Cycle, HC 158 (Qq 508-09) Back

146   Q 93 Back

147   Q 218 Back

148   Q 167 Back

149   Q 165 Back

150   Ev 92 Back

151   Ibid Back

152   Ibid Back

153   Ev 93 Back

154   Ibid Back

155   Letter from Lord Bach to Sandra Osborne MP, 30 June 2003, placed in the Library of the House of Commons Back

156   Q 218 Back

157   Ev 105 Back

158   Ibid Back

159   Ev 107 Back

160   Ev 106 Back

161   Ibid Back

162   Q 218 (see also Q 224) Back

163   Q 184 Back

164   Ibid Back

165   Q 219 Back

166   Q 114 Back

167   Q 231 Back

168   Q 168 Back

169   Q 184 (also Q 168) Back

170   Smart Acquisition: The next steps, speech at RUSI conference, January 2003 Back

171   Q 186 Back

172   HC (2001-02) 779, paragraph 17 Back

173   Q 224 Back

174   Ev 74 Back

175   Ev 104 Back

176   Major Projects Report 2001, 2001-02, HC 330, p143 Back

177   Ev 101 Back

178   Ev 102 Back

179   These dates were given to the Committee, but are classified. Back

180   Q 223 Back

181   Q 163 Back

182   Q 176 Back

183   Q 228 Back

184   Ev 106 Back

185   Ev 125 Back

186   Q 219 Back

187   Q 186 Back

188   Q 202 Back

189   Qq 191-192 Back

190   Q 198 Back

191   Q 96 Back

192   Q 191 (see also Q 230) Back

193   Q 191 Back

194   Q 192 Back

195   Q 193 Back

196   HC Deb, 30 January 2003, col 1026 Back

197   Q 236 Back

198   Ibid Back

199   Ibid Back

200   Q 233 Back

201   Ibid Back

202   Q 83 Back

203   The Importance of SMEs, Mr Stan Porter (Director General Commercial, MoD), article in Defence Contracts Bulletin, 4 June 2003 Back

204   Q 85 Back

205   Ev 113 Back

206   Q 262 Back

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Prepared 23 July 2003