Memorandum from Serco
You invited industry to submit written evidence
to your inquiry on the Defence Industrial Strategy (DIS) published
by the Ministry of Defence in December 2005.
We welcome the DIS and congratulate Lord Drayson
and the MoD team on the robust way they have developed this paper.
If implemented and joint implementation between the MoD and Industry
during 2006 is going to be critical in initiating the changes
proposed in the document, then it has the potential to be a watershed
within the Defence community. Conversely, if it is not implemented
properly, it may drive the wrong behaviours by industry. We reinforce
that success will depend on a change of culture on both sides.
In particular we welcome:
— The proposal to review the "acquisition
construct";
— The greater clarity DIS provides
on policy, capability planning and budgets in individual sectors;
— The emphasis on different procurement
models to ensure long-term value for money.
The DIS is inevitably focussed on the part that
technology development and our manufacturing industry plays in
delivering operational capability. We support your view that it
is critical for the MoD to invest early in identifying the true
costs of programmes, including the operation, upgrade, maintenance
and repair of platforms and weapon systems, together with the
manpower and appropriate training support required to provide
the desired operational capability. However, whilst stressing
the importance of improved "Through elsewhere. Whilst manufacturing
companies are an essential element of TLMP, there are a range
of other companies who can bring an independent approach and have
the potential to provide better long-term value for money solutions.
It is also important that in implementing the
DIS, the MoD recognises more clearly that industry does not consist
only of manufacturing "Primes", a supply chain and innovatice
SMEs. The term "Prime" should more logically describe
the role that a company plays in a particular prohect and not,
as the paper suggests, represent a position in the marketplace.
The paper gives little recognition that there will be projects
where it is more appropriate for non-manufacturing companies to
take a "Prime" role and for manufacturing companies
to be sub-contractors and part of the supply chain.
Overall, along with the rest of the DIC, we
thoroughly support the aims and benefits of the strategy and look
forward to playing out part in its implementation.
19 January 2006
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