1 Introduction
1. Defence equipment procurement accounts for a major
part of defence spending. The Defence Committee visited the Defence
Procurement Agency (DPA) in January 2006 and were told that the
DPA managed some 500 projects and that the value of the forward
programme was £75 billion. In 2005-06, some £5.9 billion
was spent on equipment procurement.[1]
Following the pattern established by our predecessors, we have
decided to undertake an annual broad defence equipment inquiry.
Our inquiry this year examined the performance of the DPA, and
the progress on several equipment programmes which our predecessors
had monitored:
- Astute submarine
- Future Carrier
- Joint Combat Aircraft (Joint
Strike Fighter)
- Chinook Mk 3 helicopter
2. The MoD has four categories of defence equipment:
- Category A—procurement
cost above £400 million
- Category B—procurement
cost of £100 million to £400 million
- Category C—procurement
cost of £20 million to £100 million
- Category D—procurement
cost of under £20 million[2]
Parliamentary scrutiny of defence procurement projects
has generally focused on the major defence projects, given their
financial size and impact on the defence budget, and their importance
to the armed forces. We examined two key defence projects—the
Future Carrier and the Joint Strike Fighter programmes—in
late 2005[3] and our predecessors
undertook regular inquiries into the progress of major equipment
projects and the performance of the DPA in managing these. The
National Audit Office (NAO) produces an annual report on the progress
of the top 20 major defence projects. While the procurement of
smaller-size equipment projects, particularly those procured as
Urgent Operational Requirements (UORs), have been examined as
part of inquiries into operations, scrutiny of smaller-size defence
equipment projects has, to date, been limited.
3. This year we decided to examine four smaller-scale
defence equipment projects as part of our inquiry:
- General Service Respirator
- ASUW Littoral Defensive Anti
Surface Warfare
- Maritime Composite Training
System Phase 1
- Thermal Sighting System for
the Self Propelled High Velocity Missile system
4. During our inquiry, the Ministry of Defence (MoD)
announced the merger of the DPA and the Defence Logistics Organisation
(DLO). We examined the aims of the merger and the progress being
made.
5. In undertaking our inquiry, we took oral evidence
on 27 June 2006 from three directors from the DPA: Mr Jonathan
Lyle, Operations Director, Air and Weapon Systems; Dr Andrew Tyler,
Director, Land and Maritime; Dr Iain Watson, Operations Director
for Information Superiority; and Lieutenant General Andrew Figgures,
Deputy Chief of Staff, (Equipment Capability), Ministry of Defence.[4]
On 10 October 2006, we took evidence from Sir Peter Spencer KCB,
Chief of Defence Procurement (CDP), DPA.[5]
We received a range of written evidence from the MoD and others.[6]
6. We are grateful to all those who contributed to
our inquiry including our specialist advisers.
1 Defence Procurement Agency, Annual Report and
Accounts 2005-06, HC (2005-06) 1164, p 21 Back
2
Ev 33 Back
3
Defence Committee, Second Report of Session 2005-06, Future
Carrier and Joint Combat Aircraft Programmes, HC 554 Back
4
Ev 1-14 Back
5
Ev 15-32 Back
6
Ev 33-56 Back
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