Supplementary memorandum submitted by
the Ministry of Defence
Question 27 (Mr Williams): Clarification of the
members of the Acquisition Policy Board.
The Acquisition Police Board is chaired by the
Minister for Defence Procurement and has a total of eight members.
It was formed in autumn 2004 in order to bring together issues
that had previously been considered by three separate Ministerially-chaired
groups, which it replaced. It accordingly provides a clear Department-level
focus to direct and drive forward acquisition and industrial policy.
The eight members are:
Minister (Defence Procurement), Vice Chief of
the Defence Staff, Permanent Under Secretary of State, 2nd Permanent
Under Secretary of State, Chief Scientific Advisor, Chief Defence
Logistics, Chief Defence Procurement and Deputy Chief of the Defence
Staff (Equipment Capability).
Between Ministerially chaired meetings, it also
meets at official level under the direction of the Permanent Secretary.
Question 70 (Mr Jenkins): Details of the cancelled
projects.
In the past two years the following principal
projects have been cancelled:
ADW—Area Defence Weapon: Cancelled
pre-Main Gate due to value for money issues and operational limitations.
The capability requirement will be pursued through a new project,
Future Counter Mobility Capability (FCMC).
CARMS—Counter Anti-Radiation Missile
Suite: Cancelled during Assessment Phase due to value for
money for the project itself. The capability will now be delivered
by the ASAR (Automated Software Adaptive Radar) programme.
MINDER(RP)—Mine Detection, Neutralisation
and Route Marking (Route Proving): Cancelled during the Assessment
Phase due to the technical solutions not providing adequate military
capability.
LIDEA—Laser Identification Experiment
Airborne Technology Demonstration: Cancelled after the submission
of final business case due to affordability and value for money
issues It is envisaged that the capability requirement will be
met via other NEC linked sensors.
Specifically relating to the MPR:
MRAV—Multi Role Armoured Vehicle:
The MRAV requirement was cancelled as the vehicle is not ideally
suited to the type of operations now envisaged under the Strategic
Review New Chapter and other developing policy work. This policy,
and experience gained in recent military operations around the
world, have demonstrated the need for rapid deployability in expeditionary
operations, which MRAV cannot meet to the satisfaction of the
army and did not form part of the endorsed MRAV requirement. The
capability requirement will now be pursued through the Future
Rapid Effect System (FRES).
MR TRIGAT—Medium Range TRIGAT: When
the UK signed the MR TRIGAT Memorandum of Understanding in July
1999, indicating our intention to proceed to Industrialisation
and Production (I&P), we believed Belgium and the Netherlands
would sign the Memorandum of Understanding in a similar timescale.
By July 2000 the Memorandum of Understanding signature process
had not been completed while the uncertainty and the open ended
delay had increased further, this deterioration of the programme's
prospects led the UK to decide not to proceed into the Industrialisation
and Production phase.
Question 70 (Mr Jenkins): An assessment of the
impact on our military capability of the over-run of these projects.
The aim of the Department's planning process
is to ensure that the MoD is able to deliver the optimum military
capability possible within the resources available and each year
the Equipment Plan delivers within the resources allocated. The
forward Equipment Plan is regularly recosted to reflect changes
in: technology; policy; ideas about how to deal with a particular
threat; changes in the allies' intentions; as well as cost growth.
When this process indicates that the cost of the forward equipment
programme is greater than the resources available, it is necessary
to identify changes to bring demand and resources back in to balance
for each of the 10 years of the EP. Changes may include a combination
of deferral, descope and reduction in numbers.
A rigorous internal process prioritises these
changes according to their impact on the delivery of future capability;
those which have the least impact are recommended to Ministers
for implementation. Decisions are not driven by individual project
affordability, but rather by how best the whole forward plans
can be structured to obtain the best value for money from our
resources. CDP commented on the accuracy of our cost-estimating
in the past. It is worth noting that in many cases the cost-growth
reported by projects reflects the level of uncertainty in initial
cost estimates which were made with information available at the
time.
Therefore, the usual impact on military capability
of a project overrun is that some existing equipment has to be
extended in service and/or the rate at which some future capabilities
are introduced is slowed down. This does not mean that the Armed
Forces have no capability but rather that we have to introduce
new capability at the rate that we can afford. Often this is at
the rate that we would have planned, if we had more realistic
cost/time estimates when the programme began.
Question 118 (Mr Allan): We still have a gap between
`most likely' and `maximum' of £3 billion, amounting to 30%
of the cost. It seems odd to me that we have not been able to
narrow this down.
The NAO recognised in its Report of 2000 that
the process of training aircrew is complicated and must be viewed
as a whole if value for money is to be achieved. UKMFTS is a large
change programme, involving partnering with industry, designed
to address this point by delivering a fully integrated flying
training system to meet the needs of all three services across
all aircrew disciplines.
As I outlined in my evidence to the Committee,
the figure of £3 billion reported in MPR2004 reflected the
aggregate of potential risks and uncertainties that exist in such
large and complex programmes during their early gestation. In
this case, the figure covers the full projected life of the training
system programme, some 25 years, and not just the acquisition
phase. Such uncertainty embraces, inter alia: the types, sophistication
and numbers of new or modified aircraft required; the mix of live
and synthetic flying training to be adopted; potential transfer
of some training from more expensive operational aircraft to designated
training aircraft; the need to modernise dome MoD infrastructure;
variability of training throughput; and the whole-life cost variability
of platform support—particularly where a number of different
contender aircraft need to be considered.
Since the Project Summary Sheet (PPS) for MPR2004
was compiled, work has proceeded apace to mitigate these risks.
Following a detailed convergence process with industry, MoD now
better understands the level of risk that could be transferred.
Detailed technical studies have been undertaken to improve our
understanding of how to achieve the right balance of training
methods: for example, completion of training needs analyses, studies
into live versus synthetic flying. Platform mix, aircrew selection
standards, and civilian/military instructor mix. In addition,
my people are also researching the market place for aircraft and
supporting training technology, thus gaining a better understanding
of capabilities and potential costs. Meanwhile, as the Committee
may be aware, the impact of the medium term work strands within
the MoD has been to reduce our future training requirement for
certain aircrew disciplines, and this will impact on the design
and cost of the training pipelines within UKMFTS.
Theses changes will be reported in the PSS for
MPR2004 and will be reflected in the Invitation to Negotiate (ITN)
that will be issued to the three competing consortia as the next
stage in this important programme of work.
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