Memorandum from the Defence Manufacturers
Association (DMA)
BACKGROUND
In giving evidence to the Committee in January
on the newly published Defence Industrial Strategy (DIS), the
DMA welcomed it and noted that implementation would be critical.
We noted a number of issues that were key to
this implementation. These, and others, are addressed below.
The overall position on implementation can,
probably, be fairly summed up as follows. There has been a considerable
amount of work done, studies embarked upon, plans for organisation
change made. Some partnership arrangements have been agreed. Industry
has been offered unprecedented involvement in this work and activity.
However, measurable progress and achievement is more elusive,
albeit some of the measures proposed in the Enabling Acquisition
Change Programme (ACP) are profound in their implications for
the way business will be done in the future.
A concern considered even by the MoD itself,
and expressed by Industry, is whether the changes envisaged are
too much to manage, whilst fighting two major campaigns, without
damage and delay to routine acquisition business—it is too
early to judge.
BUDGETARY/FINANCIAL
PLANNING CHANGES
The intention to streamline IAB and Approvals
procedures (only the most significant projects will be submitted
to the IAB in future but there will be increased scrutiny for
these, including an external "due diligence" review)
is welcome and highly significant. This could lead to increased
delay, prior to Main Gate Approval, for the largest projects,
hopefully compensated for by less delay/cost overrun downstream.
Meanwhile any improvement in the Approvals process for lesser
projects will depend on the degree and level of delegation of
authority and streamlining of bureaucracy. The detailed plans
for this have yet to be seen.
The intent that the IAB should, in future, consider
future support costs in their deliberations is also welcome and
essential if the through life costs of capability are to be effectively
managed.
DATA
A major problem facing the MoD (and, indirectly,
Industry), in trying to implement these changes is a lack of data.
This is an acknowledged limitation. Much data is available but
it is dispersed, fragmented and not available in useable form.
For example, central MoD, generally, can identify how much money
it has spent overall on buying spares. What it does not easily
know is how many of them have actually been used, or indeed, for
spares that have application on more than one platform, which
ones they have been used on. Similarly, manpower costs for maintenance
are not easily attributed. Thus establishing true running costs
for in-service equipment, for comparative purposes, is notoriously
difficult. Much of the relevant data also lies with Industry and
there is a concern that companies will incur costs in providing
it to MoD. Much work is necessary in this area if aspirations
are to be met.
DE&S
The plan to create DE&S is, again, a welcome
and sensible move in trying to eliminate the stove piping of acquisition
and its through life support. We note, and are somewhat reassured
by the determination of CDP and CDL not to allow the re-organisation
to disrupt business with Industry—we keep our fingers crossed.
One key DE&S question that has not been
satisfactorily made clear, yet, is the role of the three three-star
officers. The Committee might help here.
SKILLS/TRAINING
The skills issue will continue to be a problem
at many levels especially for commercial and technical staff.
A sensible initiative is proposed for more MoD/Industry joint,
post-graduate level courses (and others) to be held at Cranfield
on defence acquisition issues. This is welcome but is likely only
to attract industrial attendance from the larger, better resources
companies.
DEFINITIONS/METRICS
Our earlier input noted an important need for
agreed definitions between MoD and Industry of concepts such as
"operational sovereignty", "value for money"
and "metrics to validate success". Agreement and clarity
is still elusive, although we applaud Lord Drayson's success on
securing agreement with the US on JSF source codes. This suggests
that, although "operational sovereignty" is hard to
define, we can recognise it when we see it!
ACCESS TO
MARKET/SUPPLY
CHAINS/SMES
Considerable joint discussion has gone on, reference
made and working groups set up, to consider these issues. Progress
has been slow but we have recently made proposals to the MoD which
we believe could help, albeit they would require a few additional,
or a re-brigading of, staff within the MoD to be implemented effectively.
MoD's plans for the future of the Defence Diversification Agency
might provide a source of staff effort.
RESEARCH
The DMA welcomed the publication of the Defence
Technology Strategy. It is a helpful document, albeit Industry
is convinced that, without a real increase in MoD research investment,
many of its aspirations will remain unfulfilled—a point
we made to the Committee in January.
SUMMARY
Concern has sometimes been expressed from time
to time about the fate of the DIS and ACP were Lord Drayson to
move on. We do not share this concern with regard to the ACP;
it has considerable momentum and "top of the shop" support.
Of more concern is whether key (for Industry) elements of the
DIS, as reflected in hundreds of day to day decisions made in
IPTs, DECs, etc, will be lost in the overarching changes and restructuring
of the ACP.
14 December 2006
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