3 Through life costs were not rigorously
assessed
19. Successful procurement involves planning and
managing projects on a through-life basis, covering feasibility,
research, development, production, bringing into service, maintenance,
and eventually disposing of equipment. Bowman is a complex system
designed to provide a wide range of equipment and functionality
and consequently requires an extensive range of support services
for maximum benefit to be derived from the system. The Department
failed to plan adequately for the full range of costs associated
with introducing Bowman.[24]
20. When the programme was approved the Department's
expectation was that support costs would be broadly in line with
the equivalent costs for Clansman. But the Bowman CIP system comprises
between two and three times as many major components as the Clansman
radio that preceded it. It is difficult to get an accurate assessment
of support costs for new equipment until it is brought into service,
and some support costs associated with Bowman were initially under-estimated.
Support costs have also increased as equipment is deployed on
operations in difficult conditions such as those experienced in
Iraq. For the longer-term, the Department is looking at a built-in
through life support system for Bowman CIP consistent with the
partnerships envisaged in the Defence Industrial Strategy.[25]
21. The Department's assumption that training costs
should be no higher than those for using Clansman was clearly
unrealistic. The training requirement to ensure that users make
use of all the capabilities of the Bowman system will be significantly
higher than the equivalent for the much simpler Clansman radio.
Training costs were not fully assessed in the early stages. In
particular, Bowman requires not just initial training but also
regular continuation training. It is also an evolving system and,
as new capabilities are added, further training is needed.[26]
The Department acknowledges that the training budget was well
short of what was needed and agrees that in future it makes sense
to think in terms of acquiring not just a radio system but a radio
system with through-life support built in.
22. In December 2004 it became clear to all parties
that the Bowman CIP programme was over- ambitious and needed substantial
revision. The Bowman radio accepted into service was subject to
ongoing provisos and CIP failed to meet its expected In Service
Date. Following a detailed review and negotiations between the
Department and the contractor a recast programme was agreed resulting
in a further £121 million of funding and a two year extension
in the timescale. The Department and General Dynamics UK have
different views on how much of the £121 million represents
new or changed customer requirements and how much represents cost
increases in delivering the capability originally contracted for.
The Department described it as "regrettable additional expenditure".
The Department's view is that the basic capability requirement
is unchanged but that changes in the means of meeting it had to
be made in order to deliver the programme.[27]
23. Overall the cost overrun equates to 5% of the
initial programme cost, although on a unit cost basis the overrun
is clearly larger because the scale of the Bowman CIP programme
has been reduced. This outturn cost equates to an average £52,000
per radio installation.[28]
If the additional £200 million estimate for the cost of deleted
capabilities (paragraph 32), proves correct this would be a further
8% overrun on the original programme cost.[29]
24 Q 156 Back
25
Qq 50-51, 114-115; C&AG's Report, para 3.13 Back
26
Qq 7-8, 43, 82 Back
27
Q 46 Back
28
Ev 21 Back
29
Q 83 Back
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