Select Committee on Defence Minutes of Evidence


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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