Examination of Witnesses (Questions 60-63)
MR NICK
WHITNEY, MR
DAVID PITCHFORTH,
MR DEREK
SHARPLES AND
MR ALEX
SHARP
19 MAY 2009
Q60 Chairman: You would like to see
a second version of the Defence Industrial Strategy soon, would
you?
Mr Pitchforth: It has always been
our understanding that that has been on the cards.
Mr Sharp: To follow my colleague
from Eurocopter's comments, of course we are always happy to bid
or be involved in anything that we can be. The real question—in
terms of "is competition working for you"—is probably
better answered by asking the question not to us as industry colleagues
but more to the MoD; and that is to the brave men and women that
fight for your country. Do they think they have the best products
on site in Afghanistan and Iraq? If they think they are operating
the best equipment that is going to give them the greatest advantage
while they are in harm's way then your strategy is working; and
if they do not then you do not.
Mrs Moon: I can assure you this Committee
does ask that question on a regular basis.
Q61 Mr Crausby: Can you tell us something
about Integrated Operational Support—how is it working in
comparison with the more traditional support systems?
Mr Whitney: The Integrated Operational
Support models that I referred to earlier on, IMOS for Merlin
and SKIOS for Sea King, are working very well. We have a partnership
so we have taken on board the supply base; they are part of our
team. We have taken on board the MoD and work in a totally joined-up
manner in delivering the support necessary to keep those aircraft
on the front line. I think it is worth also pointing out to demonstrate
the value-for- money case to meet Treasury approval we had to
demonstrate the fact that we could do this even more efficiently
than the previous regime. In terms of the Sea King business case,
I think the figure was 10% cheaper; the Merlin was nearer 20%.
That is what is being delivered today. The transfer of risk to
industry I think allows the Ministry of Defence to walk away from
those risks; industry can manage it. As I said previously, the
incentivisation is now with us to improve the product through-life
and maintain it through- life. By having a long-term partnered
arrangement, looking forward, with a five-year pricing period
allows us to work with the supply base and plan accordingly; rather
than perhaps in the past where orders would have been sporadic—every
three or four years a spike of orders; business cannot plan on
that basis. Business needs predictability; and the Ministry of
Defence obviously needs flexibility and it is a balance. I think
the IOS arrangements allow us to strike the right balance with
improved value for money.
Mr Pitchforth: Our version of
the Integrated Operational Support scheme is TLCS for the Chinook.
When we took that on three years ago we contracted for 12,000
flying hours of Chinook. The RAF had never achieved 12,000 hours
at the point when we took over the contract. We are now heading
towards 16,000 hours with a target of going even higher than that
in the future. To answer your question: we are delivering capability
in theatre today as we speak from the Chinook fleet at a lower
cost than we were doing previously. I regard that as a success.
Q62 Mr Crausby: How does that work
from a safety point of view? I understand there is a transfer
of financial risk, but is there a transfer of personal risk to
industry from the MoD?
In the sense that the MoD have a responsibility
to ensure that our service personnel are unbelievably safe, and
sometimes a reduction in cost can have an effect on that. How
can we be assured that the transfer of financial risk to industry
maintains the standards of safety?
Mr Whitney: There is no change
in the airworthiness approvals process as a result of this. The
underwriting of the aircraft safety primarily is down to the Ministry
of Defence being happy with the evidence that is given to them,
and that does not change. I do not think airworthiness changes
in any way. There is no way that we, industry, could for instance
fit a part to an aircraft that was not of the right standard.
I think that is what you are potentially suggesting could happen;
that would not happen in this instance.
Q63 Mrs Moon: Could I just talk to
you about the system of Integrated Operational Support and how
that is working. I wanted to find out whether, in fact, in terms
of support on aircraft and their maintenance and their actual
operation in theatre and preparation for deployment, do you think
there is a greater role for industry; is there a possibility of
you extending your role in making sure that craft are available
and are actually serviced and ready for deployment? Is that something
you feel is an area you can expand further into?
Mr Sharp: I cannot comment on
SKIOS or IMOS—those are not our programmes. I would tell
you that I think in the commercial world, certainly our commercial
business, we have tried to employ new technology, latest technology,
we call it HUMS but it is an integrated HUM system—Helicopter
Usage Monitoring System—which monitors wear, monitors vibrations
and so on and so forth. Rather than a reactive maintenance—where
the airplane comes in, the pilot reports it broken and we go to
maintenance and we ask for the right part to fix the airplane
and get it back up—what HUMS allows you to do, certainly
in businesses in offshore oil where you are trying to make money
on thin margins at high operational tempos, is that it allows
you to predict a bearing starting to go bad and then pre-ordering
it, selecting it and doing that maintenance, rather than waiting
for the thing to break. We have talked to our military, our government
about that and that is going to be going on; the next generation
Black Hawk is a full up HUMS system that the military will be
able to take advantage of that same technology in terms of more
predictive maintenance rather than reactive maintenance.
Mr Pitchforth: We are actually
doing that already; we are moving forward with our Vector colleagues
to support the Chinook fleet forward at RAF Odiham and also into
Afghanistan; and that is to take the knowledge and skills that
we have established in Fleetlands in changing the depth facility
and learning through our lean process and moving that knowledge
out, first of all to the UK operating base at Odiham and then
further forward even to theatre. Today in theatre we have a team
led by Boeing with Vector technicians helping the RAF today on
the ramp as the aircraft take off at theatre. So we like to see
the learning from that and we do not know if that is a short learning
exercise that we will need to repeat periodically or whether that
is a constant involvement that we are taking the first steps into
helping in the way that you have described.
Chairman: Can I say thank you very much
indeed to all of you for your helpful information, which is the
first part of our evidence session today.
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