Memorandum from KBM Consultants
1. PERFORMANCE
OF DE&S
1.1 Implementation of "Blueprint":
a flawed compromise
1.1.1 The DE&S Blueprint compromised
on the recommendations made by Richard Brooks "Future Options"
study in the summer of 2007. The DE&S has signed up to the
core recommendation of a "Decider Provider" model but
has maintained an organisation of such proportion and scope that
it cannot help but get involved in "Provider" functions
such as programme management, technology management (eg the Future
Business Group IPT) and systems engineering activities.
1.1.2 As a direct consequence, industry
is confused as to the role that DE&S will play in "Team
Defence": is it a contracting authority or is it a programme
management office? FRES (see below) is but one example of where
this confusion is causing further delays and increased costs in
acquisition.
1.2 Consistency of DE&S Staff
1.2.1 DE&S (and in particular, Steve
McCarthy, DG Change) should be commended for the structure of
their PACE programme, which provides a robust framework for organisational
change.
1.2.2 As the PACE programme has explicitly
recognised, changing behaviours remains the biggest challenge.
The Defence Values for Acquisition toolkit sets out good positive
behaviours and it is commendable that compliance is tested in
personal annual reports. However, the incentives to "comply"
are not strong enough and there is no mechanism for industry to
report examples of negative behaviours. As a consequence, the
only people within DE&S that are really changing are those
who have volunteered for the "early release" scheme.
1.2.3 The various DG cluster business plans
and DE&S Risk Register provide a real indication of the DE&S
commitment to change at the middle-management level. If the Committee
members were to examine them, they would find too many examples
of the (potential) transfer of tasks to industry being used as
an excuse to maintain capabilities in-house "in case they
(industry) do not deliver".
1.2.4 In summary, whilst the organisational
culture of MoD refers to industry as "contractors" then
the success of "Team Defence" will be undermined; the
flip side of this also holds true. For DIS to succeed, both Industry
and MoD need to change behaviours. In the past, Industry has demonstrated
its ability to make such changes; MoD needs to demonstrate that
it can do the same.
2. FRES
2.1.1 FRES remains a prime example of how
not to manage a complex programme. It is difficult to see how
any programme can succeed when it has the following structure:
— An IPT to oversee the whole programme,
with its own systems engineers and technical staff, led by a gentleman
with precious little previous defence experience and knowledge
(he is a railway signals engineer).
— A Systems House (Atkins) that has
its own systems engineers and technical staff who are "shadowed"
by the IPT and its advisors in dstl.
— A System of System Integrator (Thales
& Boeing) that also has its own systems engineers and technical
staff, who by all accounts have been through the same learning
curve that Atkins went through and is effectively being paid to
do the same job (whatever the reasoned arguments of DE&S senior
management might suggest).
Further delays and inefficiencies would have
been caused by the IPT leader's long period of absences due to
ill health, not valuing the free information from US Manned Ground
Vehicles programmes (an element of the Future Combat System covered
by a TAA) and general disregard for the Defence Values for Acquisition,
in particular, "time matters", "openness and transparency",
"best being the enemy of the very good" and "identifying
trade-offs between performance, time and cost".
2.1.2 The Committee may also wish to examine
in closer detail how Thales and Boeing became to be appointed
by the FRES IPT as the SOSI. In the June 2007 DE&S in-house
magazine "Preview", David Gould (the then COO of DE&S)
appeared in a photograph opening Boeing's new office in Bristol.
The accompanying text made it clear that it was Boeing's intention
to use this facility to support the FRES programme, which David
Gould was clearly supporting. Whilst this seems perfectly laudable
now, this article appeared before the FRES SOSI PQQ was issued.
The Thales and Boeing team was consequently appointed as SOSI
on the strength of their PQQ submission in the Autumn. It is unclear
as to why the IPT was allowed to dispense with due competitive
process (as laid out in the "Restricted" procurement
procedure).
2.1.3 As far as the selection of the FRES
Utility Vehicle (UV) is concerned, there is much concern within
industry as to whether DE&S ever intended to sign a contract
with General Dynamics for risk reduction work. Rumours abound
as to the state of the relationship between the company and the
IPT staff, which is interpreted by many as stalling tactics by
the IPT. If the UV requirement is going to be cancelled (and it
is difficult to see how it can be justified in the context of
29 October announcement for new vehicles) then the IPT should
be open and honest with all concerned.
14 November 2008
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