Examination of Witnesses (Questions 20-39)
SIR PETER
SPENCER KCB, DR
IAIN WATSON
AND LIEUTENANT
GENERAL ANDREW
FIGGURES CBE
12 DECEMBER 2006
Q20 Mr Jones: So are you saying that
throughout this process you have got somebody of the lowest rank
who uses this equipment as part of that process?
Lieutenant General Figgures: Throughout
this process we have people at all levels who have a valid view
on the requirement.
Q21 Mr Jones: That is not my question.
Lieutenant General Figgures: Well,
I can answer your question: we have drivers, we have gunners,
we have infantrymen, we have radio operators, we have command
post operators; everybody is engaged in terms of determining the
requirement.
Q22 Mr Jones: And their input is
on an equal par with yourselves and other senior officers or are
they dismissed if it is not something that you agree with, for
example?
Lieutenant General Figgures: I
would not dismiss an opinion of a private soldier with respect
to his area of competence.
Q23 Mr Hancock: General, I was very
intrigued by your opening answer where you said that they could
not ask for something that could not be delivered. I am interested
to know who makes that judgment and how do the people who are
doing the asking know what can be delivered if somebody is not
telling them what is available or what the time-frame you are
working in is? To me it seemed a bit of a strange response to
give.
Lieutenant General Figgures: Well,
in the first instance I would turn to the Defence Procurement
Agency and I would turn to the scientific community. They in turn
would look to industry. I think then this becomes Sir Peter's
part of the ship and he would be best to answer that. In terms
of the scientific community, I run a research programme which
enables me to prove in principle technology which I can then put
forward as a proposition to the DPA to mature such that it can
be incorporated into the supply base.
Q24 Mr Hancock: You went on to explain
what your requirement was because you explained what would be
expected of this vehicle. There must be a factor where that vehicle
can either be supplied or it cannot. I want to know when does
the decision have to be made, by whom, and what is taken into
account? Is it simply at the end of the day that cost is the prevailing
factor, that at the end of the day you cannot have it because
it costs too much to do what you want it to do? It cannot simply
be that it is not available or cannot be done because if the price
is right people will do it, will they not? Defence procurement
has a track record of proving that point.
Sir Peter Spencer: This is what
the assessment phase is there to do. It is a fact that today the
requirement that is asked for could not be bought off-the-shelf
from anywhere in the world. So what we are looking at is the balance
between—
Q25 Mr Hancock: Sir Peter, my question
is not what can be bought off-the-shelf. If the requirement is
known, and this is what our Armed Forces need, and it cannot be
bought off-the-shelf, is price then a key factor in delivering
what the Armed Forces want; yes or no?
Sir Peter Spencer: Price is always
a factor. It is never the only factor because, as you well know,
we balance performance, time, cost and risk. My point is that
if you cannot buy something immediately off-the-shelf you then
have to look at the degree of development which is required against
a sensible timescale. This is the whole purpose of what we have
been doing during the assessment phase.
Q26 Chairman: You were asked if price
was a key factor and you said it was a factor but not the only
factor. So from the sound of things you are saying yes, it is
a key factor.
Sir Peter Spencer: There are four
key factors—performance, time, cost and risk. Neither dominates.
Q27 Chairman: So cost is one of the
key factors?
Sir Peter Spencer: As with any
other procurement activity.
Q28 John Smith: The General referred
to the capability requirement. To what extent has that requirement
changed over the last eight years, five years, or whatever it
is, and in what way?
Lieutenant General Figgures: I
think one must consider the way that we carry out our procurement.
We have a concept phase and then we have an assessment phase.
We are now in the assessment phase. We started our concept phase
in 2000-01 and we got to the start of the assessment phase in
2003. [1]We
did a lot of work in the concept phase on whether this was going
to be one single family of vehicles, whether it was going to be
a single family of sub-systems, whether they were all going to
have the same level of survivability, the same capacity and so
on and so forth. I will not say we came to firm conclusions but
we narrowed it down such that there were a number of questions
that could be sensibly answered in the assessment phase. We did
not have a firm requirement and at the start of the assessment
phase we had some, you might say, headline requirements which
as a consequence of the assessment phase we can firm up such that
when we actually decide to make the investment in this capability
we can judge the outcome against it. I think one has to understand
that this is an area during assessment when we are looking at
the risks, we are looking at how much it would cost to buy at
those risks to give the required performance, and we have to make
some trades in it. Just to go to the ultimate absurdity, if we
wish to provide protection against every known anti-armoured weapon
we would end up (and it is absurd) with something that might weigh
160-odd tonnes. That is of no military use so we are going to
have to make some judgments about survivability, capacity and
so on, against what is possible and what has military utility
in the hands of the soldiers. They would not thank us for that.
Q29 Mr Jones: I think I am a bit slow.
If you do not know what you actually want, how can you then say
you cannot buy it off-the-shelf?
Lieutenant General Figgures: We
want survivability—
Q30 Mr Jones: You have just said
you do not know what FRES is. I get this all the time. I had it
off the previous Secretary of State. If you do not know what it
is how can you then tell the Committee—
Lieutenant General Figgures: We
do know what it is.
Sir Peter Spencer: We do know
what it is. It is the medium weight component of the Future Army
Structure for the expeditionary force. We have a very clear understanding
of the sort of thing we want. The requirement has changed over
the last three years in terms of the level of protection which
is required because of the experience of current operations. When
you took evidence from me two or three years ago with General
Fulton, General Fulton explained that he felt that the sort of
weight we were going for was 17 tonnes. At that stage the aspiration
was for a single family of vehicles. As we have matured our understanding
of the technology which will be required, we have discovered we
could not deliver FRES as a single family of vehicles. It will
be three families of vehicles with a high degree of commonalty
at the sub-system level to take advantage of economies of scale.
We have also recognised that we will have to go for a weight which
is very much greater—between 27 and 30 tonnes—for
the utility vehicle. That is a direct consequence of the requirement
being iterated in the light of operational experience, which is
a perfectly respectable and legitimate activity in the assessment
phase to make sure that we understand what is needed and we do
not commit to procurement too early against the wrong requirement.
Q31 Mr Jones: While you are employing
all your civil servants at Abbey Wood people are actually dying
in action.
Sir Peter Spencer: 30% of the
IPT are military, as I said just now. It is not just civil servants.
Q32 Mr Jones: Do not just say that.
If you have not clearly defined what it is, how can you tell us
that you cannot buy this off-the-shelf or there is not some technology
out there that could be ungraded?
Sir Peter Spencer: Because we
do have quite explicit statements of what the customer wants to
have by way of levels of protection as the capability is introduced
into service, and we have clear statements of the amount of growth
over time that they wish to see in those levels of protection.
What I am telling you is that you could not go and buy something
off-the-shelf today which would meet that. We have tested it.
We did the research, we held a fleet review with the Army, with
representatives of all parts of the Army who had an expert view
on this, and presented to them what the products available today
are. On the utility variant the Army unanimously said that it
did not want to go for one of those products. It wanted us to
go for something which could be developed to give greater capability,
which is what the whole point of the assessment phase has turned
into now.
Q33 Mr Holloway: That is the front
end but at the back end in 15 years' time you have spent huge
amounts of money tailoring a completely new thing and then the
threat has evolved, so it is a bit like going to a tailor and
ordering a suit 10 years ahead with a brand new material and new
styling when every few years you could buy it off-the-peg relevant
to requirements.
Sir Peter Spencer: Which is why
we explained in the note that we gave to you that this is an incremental
procurement process, so that we go for the 80% solution on day
one with the ability to tailor it through time. In terms of the
amount of money which has been invested previously, this Committee
has actually pressed the case as to where do we stand in terms
of under-spending in the assessment phase and has said there is
a benchmark of 15%; where do we stand on that? We are looking
at an initial acquisition bill of well over £10 billion so
you would expect us to spend a lot of intellectual effort and
a lot of money researching so that we understand the technology
and we understand the requirement, and what we are putting together
is an incremental approach which will manage those risks.
Q34 Chairman: Sir Peter, one of the
requirements to start with was that these vehicles should be transportable
in the C-130J. Is that right?
Sir Peter Spencer: One requirement
was that they should be air-transportable and an aspiration was
to be transportable in a C-130J. There is no nation in the world
today that has a plan for being able to produce a vehicle that
light which has the degree to be able to be transported in a C-130J
and to be able to have the protective mobility when it is deployed
and goes on operations.
Q35 Chairman: What about in the A400M?
Sir Peter Spencer: We are still
planning at the moment to be able to make the utility component
airportable.
Q36 Chairman: In the A400M?
Sir Peter Spencer: In the A400M.
Q37 Chairman: How would that be affected
by any delay in the A400M programme?
Sir Peter Spencer: It would self-evidently
be affected by the fact that we would not be able to transport
them until the A400M comes into service, but we would have C-17s
to be able to transport them pro tem.
Q38 Willie Rennie: You have talked
about having the flexibility to have incremental changes as time
goes on as the requirement changes. I presume that is subtle changes
in the requirement. What happens if you face a substantial change,
as you have already recognised that you have had in the last few
years?
Sir Peter Spencer: This is the
whole point. We are aiming to be able to absorb the consequences
of quite major changes in requirement because our history has
told us that over a period of 30-odd years we will have major
changes in operational environment, so we will be looking for
something which has the physical and functional margins to be
able to adapt over time. One of the major drivers will be to be
able to update the vectronics packages and the sensor packages,
which is why for economic reasons we are looking for a vendor-independent,
open system of architecture so we design for that flexibility
from the outset and we do not become captive to a single supplier.
Q39 Willie Rennie: Why was that not
recognised at the very start of the process? Why has it taken
you this long to recognise that?
Sir Peter Spencer: It was recognised
that we needed to improve the logistic support and we needed to
improve the logistic footprint, and this is just the articulation
of the detail of one of the ways in which that will be achieved.
1 Note from witness: In house concept studies
started in April 2001 marking the start of the Concept Phase;
the Initial Gate Business Case was approved in April 2004, which
was therefore the start of the Assessment Phase. Back
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