FRES 03Memorandum from Atkins
Introduction1. Atkins is pleased to provide this evidence in response to the invitation extended by the Defence Committee. It is structured as follows: · Atkins and its Role · Programme and Achievements · Technology Demonstrator Programmes (TDPs) · Industry Engagement · Summary · The Future
Atkins and its Role2. Atkins is performing the role of independent Systems House in the FRES Initial Assessment Phase (iAP). In 2004 MoD decided to conduct the iAP with a Systems House, independent of product or manufacturing capability, selected for its programme management, risk management and systems engineering capabilities. Using a large independent engineering and management consultancy for assessment work on a project of this scale is a new step for MoD, where more usually a prime manufacturer would undertake such work. In this role Atkins adds significant expertise and resource to the MoD, providing technical, programme and commercial advice and services which are entirely independent of downstream manufacturing interest since Atkins has no direct or parent ownership interests in the potential FRES supply chain. Atkins is able therefore to offer completely impartial advice to the MoD and, with wide experience gained both within and outside the defence market place, this advice should ensure that MoD's subsequent procurement plans are both realistic and consistent with industrial best practice. 3. Atkins is a FTSE250 company with a turnover of £1bn and 15,000 staff and is the UK's largest engineering consultancy, operating across a diverse range of markets. Atkins plans, designs and enables all aspects of major capital programmes, undertaking feasibility studies and impact analysis covering technical, logistical, legal, environmental and financial considerations. Atkins is a top 40 supplier to MoD with annual sales of £50M. 4. Following a competition, Atkins won a two year firm price contract in November 2004 to manage the FRES Initial Assessment Phase. Atkins has deployed a flexible and skilled engineering and management team of around 70, including many with a background in the Army, Armoured Fighting Vehicle industry or MoD, as well as those with a non-defence background in programme management and systems engineering to bring best-practice and to provide balance and experience. Based in Bristol, Atkins is able to work closely with the MoD in a spirit of partnering. 5. Our role is threefold: a. To define the FRES 'system requirement' - derived from the user requirement, taking into account technical feasibility, cost, programme and risk. b. To support the MoD in developing optimum through life acquisition and support strategies. c. To manage technology risk to acceptable levels. 6. As part of this, Atkins is managing a series of Technology Demonstrator Programmes (TDPs) on behalf of MoD which are de-risking crucial aspects of the potential FRES design. These are run over two years and are described at para 13 below. 7. Owing to their initial unaffordability, protracted negotiations and approvals, the TDPs commenced later than originally envisaged and so the MoD has proposed extending the original Atkins contract to July 07 to cover their completion. Also, Atkins has been tasked to undertake planning work for the contracting process for the first FRES family - the utility vehicles - and to scope the second assessment phase (covering the recce, fires and manoeuvre support variants). Programme and Achievements8. Atkins' work has encompassed requirements definition, trade studies and the creation of 'reference concepts', relating to performance, cost, timescale, risk, acquisition strategy and support solutions. The key achievement has been to provide a robust evidence-based independent view of the performance, cost, time and risk implications of the possible overall solutions, and of the key requirements that drive cost and/or time. In particular, and in line with MoD's Acquisition Values, realism has been introduced to the time it will take to field a coherent and reliable capability to the Army - based on past AFV programmes' performance and the views of Industry. 9. This will allow the MoD to proceed quickly to issue invitations to tender for the FRES utility variant, framed so that only realistic bids should be received and the necessary understanding will be in place to evaluate the bids robustly. 10. The iAP has been characterised by a series of major reviews, attended by a wide range of Army and MoD stakeholders, which have supported senior decision making. As part of a 'One Team' with MoD and Dstl, Atkins has played a leading role in these reviews which have covered technical, programme, risk and commercial aspects. A brief summary of the key events, reviews and associated achievements follows. a. Project Launch - November 2004. b. Fleet Workshop - April 2005. Atkins reviewed all possible approaches to FRES and down-selected 12 fleet options to focus further study work. c. Preliminary Fleet Review - July 2005. Atkins narrowed the fleet options to 6. d. Fleet Review - December 2005. Atkins rejected all existing 'off the shelf' vehicles and new design approaches, reducing the options to evolutions of vehicles currently being developed. Atkins concluded that a single vehicle family was unlikely to meet the requirement and noted that the aspiration to achieve an initial operating capability in 2012 was unlikely based on current evidence. For the utility vehicles, Atkins recommended running parallel prototype contracts between two competing consortia during the demonstration phase, and moving the main investment approval, Main Gate, from its planned point at the end of the assessment phase to the end of the demonstration phase - so that it could be based on the evidence of proven prototypes when a much better view of performance, cost, time and risk would be available. Stakeholder feedback has commented that this objective, evidence-based approach adopted by the Systems House is a considerable improvement to the usual assessment phase process. e. System and Programme Review 1 - June 2006. Atkins recommended ways to accelerate the programme schedule. Atkins launched scoping work for the second stage of assessment study for the 'specialist vehicles', and for the utility vehicle competition. f. Draft System Requirement Document (SRD) released to Industry for comment - July 2006. g. System and Programme Review 2 - Due to report in late November 2006. The primary objective is to set a realistic performance, cost, time and risk target to form the basis of the Invitation To Tender (ITT) for the utility competition. It is Atkins and the MoD's view that the FRES requirement can be met within the planned budget in a 2017/18 timeframe, and whilst it would clearly be desirable to achieve the required performance at the earlier date of 2012, there is currently little evidence to support this view and the Systems House analysis has had to be careful to ensure that the MoD is not lured into a conspiracy of optimism for which it has been so often criticised in the past. The proposed contracting approach retains the possibility of a 2012 date if Industry can provide credible supporting evidence through the bidding process planned in 2007. Overall, SPR2 puts the MoD in a position to launch the utility family competition with confidence in 2007. As part of the 'One Team' approach with MoD and Dstl, Atkins has provided a realistic programme with a controllable degree of risk. 11. Atkins fully understands the importance of this project to MoD and has delivered 100% of their required input to support FRES, on time and to the Project's satisfaction. 12. As part of the 'One Team' concept and through our provision of robust evidence-based independent advice, feedback from stakeholders close to the programme indicates that Atkins is adding real value to the programme. Technology Demonstrator Programmes (TDPs)13. Atkins is managing a series of TDPs in order to de-risk potential technologies for FRES, and to feed the development of the SRD. Atkins has provided robust contract management of the TDPs on behalf of MoD. They are listed below, in order of start date. a. Chassis - General Dynamics. Contract let - August 2005. Planned completion - February 2007. b. Electronic Architecture - Lockheed Martin. Contract let - August 2005. Planned completion - March 2007. c. Electronic Architecture - Thales. Contract let - September 2005. Planned completion - March 2007. d. Electric Armour - Lockheed Martin Insys. Contract let - December 2005. Planned completion - June 2007. e. Chassis - BAE Systems. Contract let - December 2005. Planned completion - September 2007. f. Integrated Survivability - Thales. Contract let - December 2005. Planned completion - November 2006. g. Gap Crossing - BAE Systems. Contract let - December 2005. Planned completion - October 2007. Industry Engagement14. Atkins has sought to keep Industry in general abreast of the programme's development and of the opportunities for participation - through our web-site, an Industry day, strategic dialogues and attendance at defence conferences (e.g. RUSI). 15. A crucial aspect of the iAP has been to engage with Industry in order to assess their ability to manage and deliver in terms of technology, programme, cost, industrial capacity etc. This has occurred specifically through two mechanisms. 16. Firstly, 'rainbow teams' of recognised experts have been asked to undertake specific tasks to inform our work. These have been openly advertised and have drawn from academia and individual consultants as well as from Industry - spanning the range from SMEs to the primes. a. Some 75 companies are on contract and in excess of 130 tasks are in progress or have completed to date. b. These have provided invaluable information in areas such as: · Schedule timeline development. · Sensors, fuel systems, vibration management, armour, mortars, turret design, counter-mine technology and computer training 'embedded' in vehicles. · Acquisition Strategy. 17. Secondly, as the options have been narrowed, Atkins has sought to understand the maturity of current development vehicles by engaging with potential FRES suppliers. To this end Atkins has issued 56 'requests for information' which have also yielded important information. 18. The TDPs have provided an important avenue of potential involvement at all levels of the supply chain, and Atkins has required the prime contractors to compete sub-contract opportunities and enable SME involvement. 19. Generally, Atkins has enjoyed good relations with Industry. However, our role as a robust independent consultant has on occasion caused discomfort to Industry. a. It is endemic to independent assessment work that Atkins must on occasions challenge the overly-optimistic claims of Industry - which may be based on incorrect assumptions or be driven by marketing considerations, for example in relation to capability or a realistic in-service date. b. As a Systems House, Atkins has undertaken work which might normally have gone to Industry which might be a cause for complaint with certain companies. c. It is also inevitable that Atkins has been unable to engage as much as some would have liked nor provide the desired degree of programme information, owing to the sensitive nature of some of the study work. 20. Nonetheless, Atkins has found Industry to be constructive and a vital part of our assessment process. Summary21. Atkins has been a key part of MoD's team to define the Future Rapid Effect System, the Army's highest priority future procurement programme and one of the largest in Defence. 22. Our contract has been delivered to time and budget, with all contracted reviews and deliverables met to a high quality to MoD's satisfaction. Atkins has also provided support to the MoD in senior level reviews with the Army and the wider stakeholder community, providing a flexible and committed resource. 23. At all stages, Atkins has been careful to fully engage Industry through specific Industry Days, involvement in TDPs, information exchanges, conferences and their participation in rainbow teams. 24. Atkins believes that the Systems House role has made a real and significant positive difference to the FRES programme to date. Our contribution over the past two years has achieved the following: a. A broad shared understanding of the requirement and its implications for all stakeholders. FRES will comprise a number of families of vehicles, likely to include wheels and tracks, with sub-system commonality and derived from vehicles currently under-development. b. A narrowing of the potential solutions, now matched to the potential 'points of departure' amongst candidate vehicle providers for the utility family. c. A robust evidence-based independent view of the performance, cost, time and risk implications of the possible overall solutions, and of the key requirements that drive cost or time. In particular, realism has been introduced to the time it will take to field a coherent and reliable capability to the Army - based on past AFV programmes and the views of Industry. d. A vital tool with which MoD should be able to proceed quickly to issue invitations to tender for the FRES utility variant, framed so that only realistic bids should be received and the necessary understanding will be in place to evaluate the bids robustly. e. Taken together, Atkins has been able to identify and reduce risk across the FRES programme. Atkins has put the MoD in a position to proceed with the Utility contracting process in 2007 with confidence based on a realistic specification, budget and programme. The Future25. Atkins expects that our current contract will be extended to July 2007 to match the end point of key TDPs. 26. In addition, we believe that Atkins can continue to add significant value to the MoD in providing truly independent support as the programme moves forward into a. the second Assessment Phase for the 'specialist vehicles'[1] b. the contracting process for the utility vehicles, and c. the contracting process for the System of Systems Integrator. 27. Atkins believes that the current contracting arrangements for a Systems House contract works well with a firm price and scope, and incentivisation metrics on delivery, quality and behaviour. Atkins would recommend that as the project matures there would be merit in co-locating the MoD team and its partners, including ourselves, in order to maximise coherence and efficiency.
24 November 2006
[1] covering recce, direct fire and maneouvre support variants |