4 The way ahead
21. The Department acknowledged that Smart Acquisition
had only been partially implemented and that some of its key principles
needed to be applied more consistently. Recognising these shortcomings,
the Department has undertaken a review of Smart Acquisition and
has identified six areas where more needs to be done. The areas
for improvement are to:
- improve the ability to manage
projects on a whole life basis;
- facilitate effective trade-offs between capability
performance, time and cost;
- create a better, more open relationship with
industry;
- embed the concept of incremental acquisition;
- improve the approach to project approvals; and
- increase early investment to de-risk projects.[38]
22. As successive Major Projects Reports have recognised,
the Department has been trying to address some of the areas identified
for improvement for a number of years without much success. For
example, since 1999 the Department has emphasised the importance
of taking key investment decisions on the basis of whole life
costs. Yet it is only now that such data is being used to inform
decision-making and, as the Department admits, the quality of
the data is still very variable.[39]
23. The Department has recognised that it must be
candid about the extent to which the changes are being implemented
and how successful they are. To this end the Department is better
defining the processes, developing new performance measures and
putting in place a compliance regime together with much stronger
governance at Executive Board level. The performance measures
which the Department is proposing to use are listed in Figure
5.[40]Figure
5: How the Department proposes to measure the success of Smart
Acquisition
Defence Procurement Agency Key Targets
- Predicted percentage achievement of Key User Requirements
- Average in-year variation of forecast In Service Date compared with the "not to exceed" approval
- Average in-year variation of "not to exceed" forecast cost
- Customer and Partner survey satisfaction rating
- Achievement of planned efficiency measures
- Percentage variance between planned and actual in-year asset deliveries
Internal measures of the success in implementing key enablers
- Through Life Management Maturity score at Main Gate*
- Risk Management Maturity score at Main Gate*
- Survey results of progress towards more open relationship with Industry
- Percentage of projects following Incremental Acquisition strategies
- Time taken for approval of Business Case submissions
- Percentage of project cost spent in Assessment Phase
- Rate of consumption of risk differential at Agency and project level
Note: * when the main investment decision is made
|
24. Our recent Report on the Apache Attack Helicopter[41]
highlighted the value of having a single focus for the programme
management of all aspects of the delivery of a complex capability
and not just for the procurement and support of the equipment.
On the basis of best practice developed by the Office of Government
Commerce, a Senior Responsible Owner has been designated for the
Carrier Strike Capability. The principal components of the Carrier
Strike Capability are the Joint Combat Aircraft, the aircraft
carriers and the Maritime Airborne Surveillance Aircraft. The
Owner will be responsible for ensuring that all elements of the
Carrier Strike programme are managed comprehensively and coherently
to ensure the capability set out in Figure 6 is delivered.
The Department envisages that the Senior Responsible Owner job
will last only until Full Operating Capability has been achieved.
Figure 6:
Responsibilities of the Senior Responsible Owner
| Area
| Activity
|
| Equipment
| Requirements and procurement are properly structured and particularly the Joint Combat Aircraft and the Maritime Airborne Surveillance and Control Aircraft projects are being effectively integrated with the Future Aircraft Carrier.
|
| Sustainability
| Logistics to support the equipment are cost-effective and deliverable in the operational environment.
|
| People
| Recruitment and employment of the right personnel to deliver operational capability.
|
| Training
| Individuals and collective training ensures that the force operates at maximum effectiveness.
|
| Concepts and Doctrine
| The concepts and doctrine will underpin the full exploitation of the capability, in particular with respect to network enabled capability and US transformation.
|
| Structures
| The single-service force structures contribute to the realisation of the optimum capability.
|
25. The Senior Responsible Owner will remain in post
for 3-4 years and will operate with the direct authority of the
Defence Management Board. He will exercise this authority principally
by influence and persuasion, as he will not own the funds for
the programme, these being held by a number of budget-holders
across the Department. Where it is necessary to have management
agreements in place with budget-holders these will be set up.
The SRO and his very small team will not be doing the work of
individual areas, but will ensure overall coherence.[42]
26. Being associated with problem projects does not
seem to affect individuals' careers, so we questioned the Department
about incentives to encourage good performance. The Chief of Defence
of Procurement said that he believed they had strong arrangements
to recognise team and individual excellence which included the
respect and recognition of peers and small financial bonuses.
Although there were examples of excellence in project delivery,
more consistent performance was needed across all projects. To
this end, he was introducing a new performance management regime
from 1 April, central to which was the appointment of three operations
directors who would closely monitor project performance.[43]
38 C&AG's Report, para 1.25; Q 216 Back
39
C&AG's Report, Appendix 7; Qq 220, 288-289; Ev 42-43 Back
40
Qq 216-219; Ev 40 Back
41
46th Report from the Committee of Public Accounts,
Ministry of Defence: Building an air manoeuvre capability -
the introduction of the Apache Helicopter (HC 533, Session
2002-03) Back
42
Qq 210-215; Ev 39-40 Back
43
Qq 234-238 Back
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