Appendix: Government response
INTRODUCTION
This is the Government's response to the Defence
Select Committee's report entitled "The Army's requirement
for armoured vehicles: the FRES programme" (Seventh Report
of Session 2006-07), published on 21 February 2007. The Committee's
conclusions and recommendations are set out in bold.
Responses to Conclusions and Recommendations
The medium weight vehicle requirement
1. The requirement for a new medium-weight fleet
of vehicles was identified in the 1998 Strategic Defence Review.
The experience of operations in Iraq and Afghanistan has strengthened
the urgent operational need for this requirement. The Snatch Land
Rover is very mobile but has proved vulnerable to attack from
Improvised Explosive Devices and Rocket Propelled Grenades, whereas
the Warrior is sufficiently armoured against most threats but
lacks mobility. If the UK is to execute its expeditionary policy
effectively, the Army urgently requires a fleet of vehicles which
are rapidly deployable yet provide sufficient protection for Service
personnel. (Paragraph 12)
We agree. The coherent approach being taken by the
Department to meeting its medium weight armoured fighting vehicle
requirements is consistent with this conclusion.
In the short term, there is an urgent need to address
the risks faced by our soldiers on current operations. To address
this need we are implementing a range of measures including upgrades
to protection equipment, vehicle upgrades (eg BULLDOG) and introducing
new equipment such as VECTOR and MASTIFF. These additional capabilities
represent a timely response to the needs of our forces on current
operations, and are already making a valuable contribution to
ongoing operations in Iraq and Afghanistan. These measures, however,
are not, and never were, intended to meet the Army's longer term
requirement for new medium weight armoured fighting vehicles that
will be effective across the full spectrum of operations including:
Rapid Intervention; enduring Peacekeeping and Peace Enforcement
operations and support to high intensity, major combat operations.
That requirement will be met by FRES.
To ensure the coherent and effective implementation
of these programmes, the MoD has established the Sustaining Armoured
Vehicle Coherence (SAVC) Pathfinder programme and the new DE&S
will organise its work in order to improve the focus on armoured
vehicles and force protection more generally.
MEETING THE REQUIREMENT IN THE SHORT TERM
2. We welcome the MoD's action in meeting the
immediate operational need for a medium-weight armoured vehicle
in Iraq and Afghanistan. But the procurement of Mastiff and Vector
does not provide a long-term solution to the Army's medium-weight
vehicle requirement. (Paragraph 20)
We agree with this conclusion. The Departments strategy
for meeting the Army's Armoured Fighting Vehicles (AFV) needs
makes a clear distinction between the urgent, short term need
for Protected Patrol Vehicles, such as MASTIFF and VECTOR, designed
for Peace Support Operations, and those AFVs needed to provide
an effective FRES capability across the full spectrum of future
operations.
3. We welcome the fact that the Treasury has funded
the procurement of Mastiff but are disappointed that it did not
make the funds available for the Vector procurement. On present
plans the post-operations, through-life maintenance costs for
Vector and Mastiff will fall on the defence budget. The Treasury
should make additional funds available to the MoD for the through-life
support and maintenance of Vector and Mastiff. (Paragraph 21)
We would offer two points of clarification regarding
current Departmental policy.
Firstly, HM Treasury has been equally supportive
of the need to field VECTOR as quickly as possible to meet the
demands of current operations; however, their support to the MoD
has taken a different form. Unlike MASTIFF, VECTOR was a project
that was already included in the core Defence Programme and this
funding was increased and brought forward through UOR procedures
to deliver the capability ahead of the original schedule.
Secondly, the current policy for UORs is that they
are procured with Treasury contingency funding, with support and
maintenance costs claimed from the same fund retrospectively until
they are brought into the core Defence Programme, at which point
the Department assumes responsibility for support costs of in
service equipment. In line with this policy, if a decision is
taken to bring VECTOR and MASTIFF into the core programme, support
and maintenance costs would properly fall to the defence budget.
4. The procurement of Mastiff and Vector must
not deflect the MoD from working to meet the requirement for medium-weight
vehicles over the longer term. (Paragraph 22)
We agree with this recommendation. The recent and
rapid procurement of vehicles such as MASTIFF, VECTOR and BULLDOG,
provide an additional capability to commanders, but remain separate
from the FRES programme.
MEETING THE REQUIREMENT IN THE LONGER TERM
TRACER and MRAV Programmes
5. The TRACER and MRAV programmes cost a combined
total of £188 million. The MoD asserts that output from these
programmes has informed work on the FRES programme, but it is
not clear how. The MoD should explain in its response to this
report how the work carried out on the TRACER and MRAV programmes
has contributed to the FRES programme. (Paragraph 26)
At this stage, specific pull-through from TRACER
and MRAV has been limited. However it includes sub-system engineering
expertise drawn into FRES TDPs during the IAP, improved understanding
of the relationship between weight, mobility, capacity and protection
characteristics, and understanding of the risks associated with
combining the Scout and Ground Based Surveillance roles in a single
vehicle.
Further opportunities for pull-through will be realised
during the Assessment Phase for the Reconnaissance family of vehicles.
The Department has initiated a project to ensure that a digest
of key relevant TRACER information is available for exploitation
at the launch of the Assessment Phase for the Reconnaissance family
of vehicles.
The TRACER and MRAV programmes were managed entirely
outside the scope of the FRES programme, however, a comprehensive
body of information from those programmes is available to the
FRES team and has helped to inform both the requirement and the
development of viable technical and programme options. Lessons
have been learned, as appropriate, from experience on TRACER and
MRAV, with key individuals across the Department embedded within
the FRES IPT. This has allowed the pull-through of analysis, methods
and results and more efficient execution of the IAP. It has also
helped to inform our understanding of integration risks, and the
development of a viable solution for the FRES programme.
FRES 2001 - 2003: "the concept phase"
6. Following the completion of the work carried
out by Alvis Vickers between 2001- 03, and over six years after
the requirement for medium-weight forces was articulated in the
Strategic Defence Review, FRES remained no more tangible than
a concept. (Paragraph 31)
We accept that the FRES concept phase was too long,
primarily due to inability to refine and stabilise the requirement
quickly enough and failure to adopt early the most appropriate
procurement strategy. The strategy was revised in 2003 to allow
for an independent assessment of the best way to meet the FRES
requirement, including consideration of the full range of candidate
vehicles and technologies, during the Assessment Phase. This revised
acquisition approach was approved via the Initial Gate Business
Case (IGBC) in April 2004, and was formally announced by the Minister
for Defence Procurement in May 2004. This established the firm
foundation from which the Initial Assessment Phase (IAP) was launched.
Progress during the Assessment Phase has been good[1].
The next stage is the competitive approach which was announced
in November 2006. The initial wave of 3 competitions, which will
select the Utility Vehicle (UV) Design, UV Integrator and System
of Systems Integrator, has already been launched. The UV Design
competition will involve trials of candidate vehicle designs this
summer, with the outcome to be announced in November 2007.
Going forward, we intend to complete a rigorous Assessment
Phase building on the outcome of these trials and competitions
as this is an essential pre-requisite to a successful main investment
decision. The Defence Committee has correctly urged[2]
the Department to ensure adequate risk reduction work is done
prior to the main investment decision.
The Requirement: the weight challenge
7. A vital requirement for FRES is that the vehicle
will provide sufficient protection against Improvised Explosive
Devices and Rocket Propelled Grenades. In the light of operational
experience in Iraq and Afghanistan, the MoD has revised upwards
its armour requirement for FRES. Consequently, the weight requirement
for the vehicle has increased from 17 tonnes to between 20-27
tonnes. We consider it vital that UK troops are provided with
sufficient protection and that the FRES requirement must be adapted
to reflect this. (Paragraph 41)
We agree with this conclusion. We can confirm that
the FRES Utility Vehicle requirement does reflect the need for
increased levels of protection. This need was identified in response
both to experience on current operations and our ongoing assessment
of the future threat, and was confirmed as part of the FRES requirement
at the end of June 2005. To meet the Army's minimum requirement
for protection, the FRES Utility Vehicle needs to operate in the
27-30 tonnes weight range, without compromising capacity or mobility
requirements. Only Current Development vehicles have the potential
to achieve this, whilst retaining the ability to upgrade FRES
in the future (as described in more detail in our response to
Conclusion 10).
8. We note the tension between the requirements
that the FRES Utility vehicles provide sufficient protection and
that they be quickly deployable. The requirement that the FRES
Utility vehicle should be transportable by the Hercules C130J
proved over-ambitious. It remains to be seen whether transportability
by A400M is achievable. (Paragraph 42)
We note the conclusion regarding the tension between
providing adequate protection and speed of deployability. The
question of the relative priority of speed of deployability and
force protection in theatre has already been resolved. It is covered
by our response to Conclusion 9. The decision to remove the requirement
for Hercules C130 deployability reflects the anticipated change
in the balance of the air transport fleet in favour of A400M.
It also reflects the increased protection levels required for
FRES which can not be accommodated within the C130 load limit.
Transportability by A400M is recognised as a risk
to the programme but is being carefully managed with appropriate
mitigation strategies.
9. We are concerned that there could be a vicious
circle of delays as the requirement is continually revised. It
is unrealistic for the MoD to seek a perfect solution to its medium-weight
vehicle requirement. If it is impossible to develop sufficient
armoured protection for the FRES Utility vehicle while remaining
within current weight requirements, the MoD should make a decision
as to which is its priority. Failing to make the decision will
simply cause further delay. (Paragraph 43)
We agree that the requirement should not be continually
revised. However, the Committee's recommendation at paragraph
41 makes clear the need for adequate levels of protection, and
we have acted in accordance with this recommendation. This does
not constitute a vicious circle of delays but rather represents
sensible decision making in light of operational experience. Both
the threat and the requirement remain under review.
We agree we should not pursue unrealistic levels
of capability for FRES. We are seeking a pragmatic solution that
delivers, at the earliest opportunity, the capability that the
Army needs with the potential for further improvements through
life.
The question of the relative priority of force protection
in theatre and air deployability has been resolved. Whilst both
are important, protection in theatre is a higher priority than
air deployability by A400M/C17.
Our intention remains to pursue the delivery of the
FRES UV at the earliest possible time while providing significantly
improved capability and sustained operational effectiveness through
life in comparison with relevant vehicles in the current fleet
(eg the FV 430 Series and SPARTAN).
An Off the Shelf (OTS) Solution
10. The MoD considers that there is no off-the-shelf
vehicle available which would be capable of meeting its FRES requirement.
It bases this judgment on its requirement that the chosen platform
should be capable of supporting upgrades for the next thirty years.
(Paragraph 46)
We agree that there is no in service vehicle currently
available Off The Shelf (OTS) that can meet the FRES UV requirement
and offer the following clarification.
An Off the Shelf vehicle has been defined as an armoured
vehicle currently in service that would not need further modification.
Evidence from the Initial Assessment Phase (iAP) has comprehensively
demonstrated that no OTS vehicle exists that would meet the UV
requirement. OTS vehicles cannot operate in the 27-30 tonne weight
range, the weight necessary to provide the required level of protection,
and cannot be upgraded to meet it in the future. This shortfall
in protection would mean that OTS vehicles would not be operationally
effective as the FRES UV.
Analysis of Current Development (CD) platforms indicates
that some do have the potential to operate in the 27-30T range
and could therefore provide the levels of protection required
for FRES. They may however require significant upgrades to their
current chassis, drive train, engines etc to achieve these levels
of protection and this would need to be achieved without unduly
compromising capacity and/or mobility requirements. In addition,
only current development platforms offer the potential to retain
the scope to upgrade FRES in the future, as re-iterated by the
Committee in Conclusion 11 below.
A more detailed assessment of candidate current development
platforms will be carried out during the UV Design competition
(the Trials of Truth) in 2007.
11. The MoD must ensure there is scope to upgrade
FRES in the future. This must include the scope to insert new
technologies which must increase the vehicle's protection. Without
this, the MoD would have to procure vehicles off-the-shelf every
time operational threats changed. This would be unacceptable.
(Paragraph 47)
The Report rightly recognises the importance of growth
potential to allow FRES vehicles to accommodate new technologies
throughout their operational life in response to changing needs
and threats. We agree with this conclusion which is consistent
with the approach already adopted by the Department and reinforces
the need to base FRES UV on a current development solution which
has the scope for future upgrade.
International Co-operation
12. We consider it surprising that the MoD has
found no scope for collaboration with international partners on
developing FRES, particularly at the sub-systems level. The MoD
should consider whether there is any scope for exploiting synergies
with the programmes of other nations aimed at meeting a similar
requirement to FRES. (Paragraph 51)
The observation may have arisen from a misunderstanding
of the oral evidence provided by CDP on 12th December 2006. CDP
accurately stated that that there were no plans to conduct a co-operative
programme based on FCS (Future Combat System). However, this does
not preclude co-operation at the sub-system level with a number
of other nations. This is something we are actively considering
and we have already conducted a considerable amount of work with
Sweden, the US and other nations to explore the potential for
co-operation.
Engagement with Sweden has included requirements
harmonisation and co-operative risk reduction work. This work
is carried out under the auspices of an Implementing Arrangement
to the Defence Materiel Co-operation Memorandum of Understanding
(MoU), 1994.
Engagement with the US has been conducted under the
auspices of a Land Battlespace MoU which allows the exchange of
technical and requirements data between the US and UK project
teams.
We are also engaged with a number of European allies
who have defined medium weight armoured vehicle requirements to
examine possible opportunities for further joint working at the
sub-system level.
Whilst our current thinking is that there is no scope
to collaborate at the overall programme level, there is
scope for co-operation at the sub-system level. The Reconnaissance,
Fire and Manoeuvre Support vehicle families are likely to offer
further opportunities for co-operative working.
A decision on whether to pursue a collaborative programme
will be taken at the time of the main investment decision and
our open, competitive approach enables us fully to exploit relevant
international developments.
ARMY INVOLVEMENT
13. The success of the FRES programme is dependent
on the knowledge and experience of a wide range of Army personnel,
including those who will use the vehicles, being applied to the
programme. The MoD must ensure that the interests of the soldiers
who will use FRES are considered fully when defining the FRES
vehicle requirement. (Paragraph 58)
We agree with this conclusion which is consistent
with the approach already adopted by the Department. The importance
of engaging the views of the soldiers who will use the FRES vehicles
is well understood and is reflected by: the roles of the User
and Sponsor within the MoD, the use of Army Subject Matter Experts
in the FRES IPT[3] and
the involvement of the Army's Trials and Development Units, who
will play a key role in the Trials of Truth scheduled for mid
2007.
The Army is further represented at all levels throughout
the programme. The Army is an integral part of FRES programme
governance and is involved in all assessment phase activities,
in the initial wave of 3 competitions and in programme decision
making. The new DE&S organisation has further reinforced senior
Army involvement in the programme through the creation of Chief
of Materiel (Land) and Armoured Fighting Vehicle Group Leader
posts, at Lieutenant General and Major General respectively.
THE ROLE OF THE SYSTEMS HOUSE
14. We note with interest the appointment of a
Systems House and recognise the potential benefit to the MoD of
a source of independent project management expertise. We recommend
that the MoD publish the performance criteria by which the contribution
by Atkins to the FRES project will be judged and their subsequent
performance in meeting them. (Paragraph 61)
As the Committee has recognised, the Systems House
(SH) approach offers potential benefits to the Department.
The Department's policy is not to release detailed
assessments of the performance of contractors into the public
domain because of their commercial sensitivity.
In keeping with normal contract management procedures,
the performance of Atkins has been kept under review throughout
the IAP. Their performance will be assessed formally at the end
of the phase. We would propose to update the Committee confidentially
(not for publication) on the contribution Atkins has made to the
IAP in the further update at the end of the year.
ACQUISITION STRATEGY: INTELLECTUAL PROPERTY RIGHTS
15. We welcome the MoD's insistence that intellectual
property rights to FRES should remain in the UK. For such a vital
project, the UK must retain the essential systems knowledge within
the UK. (Paragraph 71)
We agree with this recommendation which is consistent
with the approach already adopted by the Department.
Absolute clarity on the ownership of Intellectual
Property Rights and technology transfer issues will be essential
in ensuring we can upgrade FRES vehicles throughout their life,
thereby securing operational sovereignty. Agreement that all intellectual
property and design authorities should reside in the UK is a pre-requisite
for companies participating in FRES competitions.
16. Retaining the intellectual property rights
within the UK will enable the MoD and defence companies residing
in the UK to exploit fully the potential export market for FRES.
UK-based companies producing the FRES vehicle for export would
not only benefit the UK economy but also help support the UK's
defence industrial base. (Paragraph 72)
We agree with this conclusion which is consistent
with the approach already adopted by the Department. The benefits
to UK Industry and the UK Industrial base are recognised.
IN SERVICE DATE AND MAIN GATE APPROVAL: UTILITY VARIANT
17. The FRES Utility vehicle ISD must be challenging
but achievable. Although the Defence Industrial Strategy states
a planning assumption of delivery by "the early part of the
next decade", the Systems House, appointed by the MoD for
its project management expertise, considers there to be little
evidence that FRES will be in service before 2017. (Paragraph
81)
Our strategy is designed to achieve the earliest
ISD of a vehicle which meets the Army's requirement and offers
the potential for sustained operational effectiveness through
life. Our planned activities for 2007, together with the UV Demonstration
Phase which follows, are designed to generate the hard evidence
required for a successful Main Gate decision, and are designed
to provide the required capability much earlier.
18. The Army's lack of suitable medium-weight
armoured vehicles has meant that the MoD has had to devote considerable
sums on the ad hoc purchase of Mastiff and Vector armoured vehicles
and upgrading the FV430 series of vehicles. If FRES does not enter
service until 2017-18 further interim purchases are likely to
be necessary at considerable cost. (Paragraph 82)
We are driving hard for the earliest delivery of
FRES to minimise the need for interim expenditure on AFVs. Mastiff
and Vector, however, were purchased as Protected Patrol Vehicles
to address specific needs on current operations.
19. We acknowledge the increased rigour that Lord
Drayson's leadership has brought to the MoD's procurement process
and note the reasons he gives for not announcing the ISD for FRES
before it has passed its Main Gate review. However there is a
legitimate public interest in knowing at least the planning assumptions
of when equipment is expected to be delivered to our Armed Forces
and the MoD should be more transparent about this. (Paragraph
85)
Our decision not to formally release the in-service
date until all the relevant factors have been taken into account
and the main investment decision has been taken is consistent
with the policy outlined by Lord Drayson to the committee on 19th
December 2006.
20. We acknowledge the need for Ministers to have
bargaining power with industry. However, sparing Ministers from
political difficulties is not a sound reason to not announce targets
for the delivery of programmes. The decision not to announce a
target Main Gate for FRES might give the impression that the programme
is being driven by the concerns of the DPA rather than by military
need. In its response to this report, the MoD should explain its
overall approach to negotiating procurement contracts. (Paragraph
86)
We do not accept this conclusion. It is neither helpful
nor accurate to suggest that the Department's policy not to release
target dates for the delivery of equipment programmes ahead of
the main investment decision is in any way designed to avoid political
difficulties . Equally, there is no justification for the suggestion
that the FRES programme is being driven by the concerns of the
DPA (now DE&S) rather than by military need. In fact, the
converse is the case.
Lord Drayson outlined the Department's policy on
the release of planned in service dates to the committee on 19th
December 2006. He made clear that the premature release of cost,
timescale or performance forecasts can lead to pressure to conclude
projects within unrealistic constraints. It is MoD procurement
policy therefore not to release such data, including a target
date for Main Gate and the in-service date, until all the relevant
factors have been taken into account and a thorough risk assessment
conducted. With regard to FRES, however, we have provided further
advice, in confidence, to the Committee.
The Department's approach to contract negotiation
recognises the uniqueness of each project. In general terms, we
seek to apply commercial best practice, tailored to the particular
circumstances of a given negotiation. The report rightly recognises
the need for Ministers to have bargaining power with industry,
conducting negotiations in public would undermine this aim.
THE HEAVY AND RECONNAISSANCE VARIANTS
21. The MoD gives no indication of when the Heavy
and Reconnaissance variants of FRES will enter their Initial Assessment
Phase. As with the Utility variant, it remains unclear when the
Heavy and Reconnaissance variants of FRES will enter service.
The procurement of a successor reconnaissance vehicles is particularly
important owing to the ageing fleet of the CVR(T) vehicle. (Paragraph
91)
We accept the conclusion regarding the importance
of replacing CVR(T). However, in recognising its importance, our
first priority remains the delivery of the UV family. FRES programme
activity reflects these departmental priorities.
Work on the Reconnaissance and Heavy vehicle families
has already begun, and an initial contract has been placed with
the Systems House. Under this contract they will begin the work
necessary to further define the Reconnaissance family requirements
and analyse options for meeting a number of the Manoeuvre Support
vehicles within the Heavy family.
OVERALL CONCLUSION
22. This is a sorry story of indecision, constantly
changing requirements and delay. We are concerned that the FRES
requirement may simply be unachievable without a major technical
breakthrough. The tension between the survivability and deployability
is particularly acute: satisfying both requirements may prove
impossible. It is high time the MoD decided where its priorities
lay. We shall take further evidence on the FRES programme in the
Autumn of this year. (Paragraph 93)
We accept that the FRES Concept Phase took too long,
primarily due to not adopting early the most appropriate procurement
strategy and not adopting early a process to refine and stabilise
the requirement. We also accept many of the recommendations made,
noting that the majority are entirely consistent with the approach
that the Department has adopted for the FRES programme.
However, we believe that real progress has been made
since the launch of the IAP in April 2004. The Acquisition Strategy
was approved and announced by Min(DES) in November 2006, and the
initial wave of three competitions has formally been launched.
Candidate Utility vehicles will undertake proving trials this
Summer, with the outcome to be announced in November 2007.
Moving forward, we intend to build on the successes
achieved during the IAP, taking the decisions necessary to drive
the programme forward at pace. This will enable delivery, at the
earliest opportunity, of a FRES capability that will ensure value
for money and be operationally effective through life.
We look forward to providing a further update towards
the end of the year.
1 All key decision milestones have been achieved on
time and all of the Technology Demonstrator Programmes are performing
well against their contract schedules Back
2
HCDC Sixth Report 28 July 2004
CONCLUSIONS
4. It comes as no surprise that
a key underlying cause of poor performance, in terms of delivering
projects to time and cost, has been MoD's failure to invest enough
money and time to sufficiently de-risk projects in the Assessment
Phase.This is a concern which we, our predecessors and the National
Audit Office, have highlighted over the past 20 or so years. MoD
now proposes to spend more money and time in the Assessment Phase.
We welcome this intention, but given past failures to address
this longstanding problem we are still to be convinced that it
will be implemented in practice. (Paragraph 28) Back
3
30% of total IPT numbers are embedded Army personnel, half of
which are Army Subject Matter experts. Back
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