Second memorandum from the Ministry of
Defence
THE PROCUREMENT
CHALLENGE
The FRES fleet of vehicles will be significantly
more complex than previous generations of armoured fighting vehicles
as they will need to be fitted with the following types of equipment:
— passive and active armour and other
vehicle protection technologies;
— Bowman and other advanced digital
communication systems (both data and voice) to allow full integration
of the vehicles into the wider military network; and
— various weapons and sensor systems
depending upon the vehicle type.
In effect each FRES vehicle will have on-board
systems of similar complexity to a small aircraft. The high likelihood
of continuous developments in such systems requires that the FRES
fleet is designed to be upgraded easily in future. It therefore
requires a vendor independent "open" design for its
system architecture to allow a "plug-in and go" facility
for future capability upgrades.
The weight of the vehicles has a direct bearing
on the ease with which they may be transported by air; a key requirement.
The ease with which the FRES vehicles may be
maintained and upgraded to meet future threats and tasks over
their expected service life will have a major impact on their
through-life costs and hence overall affordability and value for
money. These features must be designed in at the start.
The harsh operational environment within which
the vehicles will operate, given their system complexity, will
present a significant engineering challenge.
The age of the current fleet of armoured fighting
vehicles requires that the FRES vehicles be delivered as quickly
as possible.
Meeting the above requirements presents a very
significant challenge to the MoD and defence industry procurement
community and has been a key reason for the time it has taken
to determine an effective acquisition strategy.
KEY PRINCIPLES
FOR FRES ACQUISITION
The Acquisition Strategy will be a key factor
in successfully delivering FRES and will form the foundation of
our future relationship with the Armoured Fighting Vehicle sector
of the defence industry over many decades.
The MoD has established certain key principles
for the FRES Acquisition Strategy to meet the procurement challenge.
The FRES Acquisition Strategy will be consistent
with the framework provided by the Defence Industrial Strategy.
The FRES vehicles will be a key factor in the
future effectiveness of the British Army and their flexibility
and characteristics will have an impact on future tactics and
techniques on operations. It is essential therefore that the intellectual
property underpinning the "operating systems knowhow"
of the FRES fleet is understood and controlled by the MoD to ensure
that the system architecture remains open throughout the FRES
fleet life and does not come under the effective control of another
party. MoD will acquire the necessary knowhow through the acquisition
process.
The FRES vehicles will be procured on a "through-life"
basis to deliver optimum capability at best value for money through
the full operating life of the vehicles from design through acquisition,
multiple upgrade cycles and eventual disposal.
The first of the FRES vehicles to be procured
will be the Utility variant. To reduce development cost and risk
the utility variant will be based upon a vehicle chassis that
is either already in production or is at a sufficiently late stage
of development that it can enter vehicle proving trials to be
undertaken by the British Army in 2007. The winning vehicle from
these trials will be then fitted with the necessary systems and
vehicle modifications required to meet the UK need.
Effective evolution of the vehicles through-life
to meet the currently unknown levels of future threat will require
an "open" architecture to the systems design and absolute
clarity on Intellectual Property and technology transfer issues
from the outset. Hence agreement to deliver "UK residence"
of all intellectual property and design authorities will be a
pre-requisite for companies to enter into the FRES procurement
process.
Industry and the MoD FRES procurement team will
be incentivised to meet the target date for the delivery of the
first vehicles (utility variants) to the British Army in the early
part of the next decade. By then we plan to have established an
acceptable level of performance and number of vehicles to deliver
an Initial Operating Capability. We will also have continued the
parallel assessment work on the specialist variants with a view
to delivering the full capability in planned increments thereafter.
In-service dates and costs for the Initial Operating
Capability will be set at the Main Gate main investment decision
point.
Early vehicles may be manufactured ex-UK on
an existing production line if needed to meet the target delivery
date for the first vehicles, but production (and all necessary
IP and design authorities) will be transferred to the UK for subsequent
vehicle manufacture to deliver UK operational sovereignty through
life.
The first priority in choosing the capabilities
of the FRES vehicles during the assessment phase will be the key
user requirements of the British Army. A second priority will
be to maximise opportunities for export sales in the design where
this is consistent with these KURs.
FRES ALLIANCE
The complexity and scale of the FRES fleet will
require a team of suppliers from several parts of the defence
industry (armoured vehicle suppliers, system integrators, digital
communications, weapons systems etc) to work together and with
the MoD in an efficient manner.
Given the recent positive experience on the
Aircraft Carrier project the MoD has therefore decided to establish
an alliance arrangement, to be led by the MoD as client, supported
by an industrial player acting in the role of System of Systems
Integrator (SOSI). The SOSI will be selected by competition. Alliance
membership will expand as competitive selections are made. This
approach will enable us to construct an industry team capable
of meeting the unique challenges inherent in the programme. The
programme will rely on having access to an appropriate blend of
skills and resources and be based on a commercial relationship
that is inherently flexible and capable of responding to the developing
requirement.
With a whole life cost estimated in region of
£50 billion it is vital to ensure that the alliance chosen
to deliver through-life capability is made up of the best possible
partners in each of the major areas of this programme. We will
therefore use competition to select "the best team"
and have concluded that there are four key roles in the delivery
of the FRES Utility Vehicle family. We would expect these roles
to be reflected in the other complex and heavy vehicle families,
although the potential competitive field may be smaller. The four
roles are:
System of Systems Integrator
Will aid the MoD led Alliance by undertaking
system engineering, capability level integration, programme management
and design services. The SOSI will ensure that coherent system
solutions, integration approaches, design techniques, support
and documentation are in place across all FRES variants. And that
the vehicles will be interoperable with all other force elements
in the UK ORBAT for both national and coalition operations. The
SOSI will be UK based. The SOSI will be responsible for the development
of the MoD's knowhow and control of the FRES operating systems
architecture.
Vehicle Designer
This will be the designer of the vehicle that
wins the proving trial. The vehicle will already be in production
or late-stage development and the winning vehicle designer will
implement the vehicle modifications required to meet the UK need.
A precondition for entering this competition will be that regardless
of the country of origin of the design, exploitation rights and
Intellectual Property Right will be available to the UK government
led alliance and will facilitate transfer to UK manufacture.
Vehicle Integrator
Will integrate the complex systems into the
vehicle chassis. This will include integration of communications,
command and control functions, plus the vectronics, sensors, weapons
and Defensive Aid System . The Vehicle Integrator will be UK based
with all the IP either created in the UK or made freely available
for exploitation in the UK.
Vehicle manufacturer
Will manufacture the FRES utility vehicle. In
principle this will be in the UK, but early production might use
an existing production line ex UK before transfer to the UK. High
efficiency and production quality will be essential. The vehicle
designer may also be the vehicle manufacturer or the manufacturer
may licence the rights to manufacture from the vehicle designer.
The above structure is needed to compartmentalise
the various elements of the procurement process to deliver clear
lines of responsibility and accountability within a teamed alliance
approach.
Having agreed the strategy the FRES programme
now has a clear path to deliver to the Army its essential future
medium weight capability.
7 December 2006
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