Memorandum from the Society of British
Aerospace Companies (SBAC)
1. SBAC is the UK's national trade association
representing companies supplying civil air transport, aerospace
defence, homeland security and space markets. Together with its
regional partners, SBAC represents over 2,600 companies across
the UK supply chain, assisting them in developing new business
globally, facilitating innovation and competitiveness and providing
regulatory services in technical standards and accreditation.
2. SBAC welcomes the opportunity to contribute
to the House of Commons Defence Committee inquiry into defence
equipment, focusing on the last year of the Defence Procurement
Agency (DPA) and the development of Defence Equipment & Support
(DE&S).
3. The April 2007 merging of the DPA and
Defence Logistics Organisation (DLO) to create DE&S flowed
from the Enabling Acquisition Change Report which launched the
Enabling Acquisition Change Programme. It represented one of the
key steps, at the strategic level, in the implementation of the
Defence Industrial Strategy (DIS).
4. Industry broadly supported the conclusions
of the Enabling Acquisition Change Report and endorsed MoD's objective
to manage programmes on a through life basis to help better ensure
the effective performance of the Ministry's acquisition plans.
In particular, the establishment of DE&S was welcomed as an
opportunity to embed the proper practices (based on the Defence
Values for Acquisition) in the customer organisation and to develop
a joined up approach in dealing with procurement, support and
the through life approach.
5. Merging the DPA and DLO was intended
to eliminate barriers between provision of equipment and in-service
support, while creating greater consistency in the interface with
industry. While it is too early to assess whether these objectives
have been realised, the task of bringing the two sizeable organisations
together was effectively handled by MoD. Although industry was
apprehensive about the magnitude of internal reorganisation required,
the merger did not appear to distract MOD officials from ongoing
business. Those delays that did occur in procurement decisions
were largely attributable to pressures on MoD's programme budget.
6. The new DE&S is charged with equipping
and supporting the UK's armed forces for current and future operations.
It acquires and supports through life, including disposal, equipment
and services ranging from ships, aircraft, vehicles and weapons,
to electronic systems and information systems. In so doing it
is ascribed a challengingly wide range of responsibilities and
its expenditure represents over 40% of the defence budget.
7. While it is too early to assess the impact
of DE&S' creation, the DIS process, of which the establishment
of DE&S is a part, has had the effect of improving industry
working relationships with MoD. It is the continued positive development
of this relationship that should be the priority for MoD as it
reviews DIS. DIS v2.0 should not detract from, but rather reinvigorate,
the implementation of the original Strategy and there is more
to be done, particularly at the operational level, to transform
the vision of DIS into a workable reality. MoD's DIS v2.0 engagement
plan offers the opportunity for implementation strategies to be
properly discussed and coordinated with industry to ensure that
they are effective.
8. A key priority for DIS v2.0 should be
to clarify how through life capability management will be achieved—a
principal concern for DE&S. The Sustained Surface Combatant
Capability and Sustained Armoured Vehicle Capability pathfinders
have, for example, made progress but MoD must ensure this work
is taken forward. Long-term partnering agreements were a significant
element of the original DIS but of five partnering agreements
foreseen (rotary wing, fixed wing, AFVs, submarines and complex
weapons) only one has been brought to conclusion to-date. MoD
provision of some guiding principles for partnering would be helpful
in showing what partnering relationships should look like and
might also help speed up the MoD's internal processes for addressing
sectoral partnering arrangements. The implications of long-term
partnering for the industrial supply chain also need to be examined
to ensure that the competitiveness of UK industry continues to
improve under these arrangements.
9. Industry would recommend that the effectiveness
of DE&S should be reviewed again, once it has had the time
to settle down as an organisation and a greater proportion of
the original objectives of DIS have been achieved. Industry would
welcome playing a part in that review.
12 October 2007
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