Conclusions and recommendations
1. A third of Urgent Operational Requirements
to support the war-fighting phases of operations in Iraq were
to fill previously identified gaps in capability which the Department
considered too low a priority to fund from its regular procurement
budget. As part of its
contingency planning the Department, working with potential suppliers,
should routinely put in place suitable plans to mitigate the risk
that known capability gaps cannot be filled in a timely and effective
manner.
2. Over half of the Urgent Operational Requirements
procured to support operations in Iraq are now planned to be retained
permanently by the Department. Yet the Department's planning processes
still assume the equipments will be retained for just one year.
Where there is a prospect that an Urgent Operational Requirement
may be retained for longer than one year the Department should
specifically consider longer term ownership costs in developing
the business case to support its initial procurement.
3. With the on-going commitment of the Armed
Forces to a wide range of operations, flexible and responsive
means of supplementing or enhancing existing military capability
are likely to become increasingly central to the Department's
business activity. As a starting point,
the Department should re-examine whether the Urgent Operational
Requirement process should still be viewed as a separate activity
from mainstream acquisition. If it decides to retain a separate
Urgent Operational Requirement process, it should consider re-allocating
existing resources to work directly for the Senior Responsible
Owner, so he can better discharge his duty to provide for rapidly
emerging equipment needs.
4. The Department has no system for comprehensively
tracking the cost, timely delivery and use of Urgent Operational
Requirements, and it had to undertake a one-off exercise to provide
the information for this Committee's enquiry.
The Department should introduce a management information system
to facilitate the full and timely capture of data on the progress
of Urgent Operational Requirements and their effectiveness in
use, and ensure it is accessible to the many different parts of
the Department, such as the Equipment Capability Customer and
Defence Procurement Agency, who require this information.
5. The NAO's Report identifies significant
weaknesses in the current monitoring systems for Urgent Operational
Requirements, which make it difficult to assess how well the existing
processes are working and to identify how best to develop these
processes and ensure they are applied to consistently high standards.
The newly appointed Senior Responsible Owner should develop Performance
Indicators covering both the efficiency of the various activities
undertaken to cost-effectively deliver Urgent Operational Requirements
when they are needed, and the extent to which the delivered equipments
meet the operational needs of the Armed Forces.
6. In a number of cases, notably the urgent
procurement of Global Positioning Systems, the Department met
a proportion of its requirements by procuring lower capability
commercial systems which met the required performance at a tenth
of the cost of the military version. As
part of its regular procurement activity the Department should
examine the costs and benefits of utilising commercial off-the-shelf
equipments to meet its requirements.
7. Many of the Urgent Operational Requirements
to support operations in Iraq were successfully developed and
introduced into service in very short time-scales. Much of the
Department's regular procurement is to deliver items of similar
cost and complexity, yet takes much longer.
The Department should examine what lessons it can learn from its
flexible approach to Urgent Operational Requirements, including
the less bureaucratic streamlined processes used to conduct competitions,
and apply these more consistently to its routine procurement activities.
8. Under the pressure of conflict, the Department
and its industrial partners have shown considerable resourcefulness
in coming up with good solutions to address urgent shortfalls
in capability. The delivery of equipment
such as the Shallow Water Influence Mine-sweeping System showed
how the Department and industry can innovate quickly and economically.
These successes contrast with the recurring interminable time
and cost problems reported regularly in the Major Projects Report.
The Department needs to refresh its approach to its mainstream
procurement activities to capture the verve and élan it
regularly demonstrates in a crisis, with timely solutions that
work instead of an open-ended quest for perfection.
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