Examination of Witnesses (Questions 40-59)
SIR PETER
SPENCER KCB, DR
IAIN WATSON
AND LIEUTENANT
GENERAL ANDREW
FIGGURES CBE
12 DECEMBER 2006
Q40 Willie Rennie: You said that
you had a substantial change in circumstances because of your
experience in Afghanistan, et cetera. Why was that not recognised
before, because these conflicts are not new, these conflicts have
been going on for years?
Sir Peter Spencer: Because we
are in the assessment phase and the whole premise of the assessment
phase is to make sure that we do understand what the threat is
likely to be and we do understand the sorts of operations that
we are likely to be conducting in the future. The strategic circumstances
have changed in defence. When this was first conceived in 2001,
it was conceived largely to be a capability which would be used
in conventional, high-intensity operations. What we have seen
over the last few years is a much greater use of this sort of
capability in peace-keeping and peace enforcement operations.
It puts you into a totally different position vis-a"-vis
your ability to defend against a threat, and we have uncovered
a whole lot of much more difficult threats in the last few years
than had previously been anticipated. Fortunately, we have not
committed to the main gate investment decision otherwise we would
be in a mess, would we not.
Q41 Willie Rennie: Who else runs
a process like this in the world? Why has it taken eight years
to go through that process?
Sir Peter Spencer: If I can just
put this into context. To correct the General on a point he made,
we did not start the assessment phase formally until 2004, so
we have been in the assessment phase for two and a half years,
and a two and a half year assessment phase for more than £10
billion initial acquisition programme is quite a short space of
time and that compares with anybody else doing this sort of business
if they are starting to tackle this sort of degree of challenge
in their capability. We have benchmarked how long it normally
takes to bring a new armoured fighting vehicle into service and
the timescales that we are driving towards compare very favourably.
Q42 Mr Hancock: General, you were
asked a question and you were just about to answer when Sir Peter
eagerly jumped in and gave us a definition of what the requirement
was. I was rather surprised that you did not tell us as you were
the person who tailored the Army's requirement and you did not
seem to know what the requirement was and you seemed to be unable
to answer the question. I want you to clarify just where you are
with your view of what the requirement was.
Lieutenant General Figgures: I
am reassured that my supplier knows the requirement otherwise
I would be lost.
Q43 Mr Hancock: I am not reassured
as to why you did not answer the question.
Lieutenant General Figgures: I
am in danger of repeating what he said but FRES is required as
a replacement armoured vehicle in the armoured brigades and to
equip the medium weight brigades, now known as the three mechanised
brigades. It is required to enable the armoured brigades to fight
conventional wars, rather as we saw in Telic 1, and it is required
to enable the mechanised brigades to both support the armoured
brigades with what we in the Army would say a manoeuvre support
brigade, and also to be deployed in peace-keeping and peace enforcement
operations. So there is a balance of capability between those
two and the tactics, techniques and procedures which are used
in those instances are subtly different because of the rules of
engagement and so on and so forth.
Q44 Mr Hancock: We can be absolutely
sure that when you retire you will not write and say that the
DLO did not produce the vehicle that you required? You are in
common agreement now that the product they are seeking to give
you is exactly what you want?
Lieutenant General Figgures: We
are in common agreement.
Q45 Mr Jones: Sir Peter, you said
that it is remarkable that this assessment phase has taken two
and a half years and how far you have got. Can I just go over
the history of this programme. There was a non-competitive contract
let to Alvis Vickers to lead a FRES assessment phase with an in-service
date of 2009. Can I ask what that cost and why it was ditched?
Sir Peter Spencer: That predates
my involvement. Put it this way: when I arrived in 2003 this Committee
asked me questions about FRES; FRES had been the subject of an
initial gate submission.
Q46 Mr Jones: You actually let a
contract to Alvis Vickers.
Sir Peter Spencer: I will go back
and research it for you. What I am explaining to you is from personal
knowledge. The submission for the initial gate was then resubmitted
to the IAB towards the end of 2003. The approval was not given
until 2004, so we did not start the assessment phase until spring
of 2004. I have no recollection of an assessment phase contract
being given to Alvis Vickers but I will certainly go away and
look up the detail and if I am wrong I will send you a note. [2]
Q47 Mr Jones: You are wrong because it
did take place.
Sir Peter Spencer: In which year?
Q48 Mr Jones: 2002.
Sir Peter Spencer: I am sorry,
but this was before the initial gate so it was not an assessment
phase contract full stop. It may have been a pre initial gate
contract. There may well have been some concept phase work.
Q49 Mr Jones: So when you came in
it was year zero on FRES, was it?
Sir Peter Spencer: In terms of
the—
Q50 Mr Jones: Come on. Was it year
zero? When you came to your desk—
Sir Peter Spencer: —Year
zero on FRES—
Q51 Mr Jones: —was it a blank
sheet of paper on FRES? Is that what you are saying? No work had
been done before then?
Sir Peter Spencer: No, I am not
saying that. I am saying there is work that takes place before
an initial gate which is done usually by the future business group
and it looks at applied research, concept work and technology
demonstration.
Q52 Mr Jones: Can I say, Sir Peter,
I find it absolutely remarkable that you can come here today in
charge of this programme and say that you did not know about a
non-competitive contract let to Alvis Vickers. I know about it;
industry knows well about it.
Sir Peter Spencer: You called
it an assessment phase contract and I challenged the fact it was
an assessment phase contract.
Q53 Mr Jones: That is changing it.
Are you aware of any non-competitive work given to Alvis Vickers
in 2002?
Sir Peter Spencer: I am aware
there was non-competitive work done before the initial gate.
Q54 Mr Jones: What was that?
Sir Peter Spencer: It was simply
pre initial gate phase work.
Q55 Mr Jones: What was involved in
that?
Sir Peter Spencer: To set out
what the options would be.
Q56 Mr Jones: A minute ago you told
us you did not know about it. Now you are trying to describe what
went on.
Sir Peter Spencer: I am sorry,
I do not mean to be pedantic but you asked me about an assessment
phase contract; it was not an assessment phase contract.
Q57 Mr Hancock: What was it then?
Sir Peter Spencer: For the third
time, it was a pre initial gate concept phase contract.
Q58 Mr Hancock: What did you get
out of that?
Sir Peter Spencer: You get a broad
understanding as to the sort of capability, the sort of aspirations
that the customer has, the sort of technology which needs to be
matured in order to move towards a solution. It is a perfectly
normal part of the cycle. It is unexceptional.
Q59 Mr Jones: Sir Peter, that is
not true, I am sorry. If you are sitting here today and telling
us that that was just part of this entire process, that is not
the case. Alvis Vickers were livid when you severed that contract
because they were under the impression that FRES was going to
be a non-competitive process and that work was part of what they
thought was the start of the actual process. I understand—and
they can supply the information to us if you want—that something
like £14 to £20 million was spent in that phase. What
happened to that work? It is no good coming here trying to wriggle
out of it and say to this Committee firstly that you did not know
what was going on and the next thing trying to explain what went
on.
Sir Peter Spencer: Chairman, do
I have to be on the receiving end of quite so much provocation?
We could have quite a sensible and illuminating discussion.
2 See Ev 27 Back
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