DE 11

 

 

Supplementary memorandum from the Ministry of Defence

 

 

TLCM

 

(i) At the evidence session on 18 November 2008, industry witnesses emphasised the importance of the Through Life Capability Management (TLCM) approach. Is the MoD content with the progress made to date in implementing the TLCM approach? When does the MoD expect this approach to be fully embedded within the department? To what extent is funding limiting the progress in implementing the TLCM approach?

 

Good progress has been made in implementing Through Life Capability Management (TLCM). Since the publication of the Enabling Acquisition Change report in 2006, the Department has introduced new capability planning structures and procedures, which were initially tested in Planning Round 08 and are currently being used across the MOD for Planning Round 09. The new approach is designed to ensure that all aspects of new and existing military capability (equipment, training, people, infrastructure, support, etc.) are planned and managed coherently from cradle to grave, with better knowledge of all relevant factors including up-front acquisition costs and through-life support.

 

TLCM will take time to implement as it requires different ways of thinking and working rather than just process change. The basic elements are already embedded across defence, principally to support the way we approach our capability planning. As part of the next phase, we are focusing on how we deliver military capability more effectively. In line with the Office of Government Commerce's guidance on Managing Successful Programmes, we will introduce a programme approach; aggregating many individual delivery projects, both new and in service, into broader through life capability based programmes. This next phase commenced in early November 2008 and is expected to be embedded by March 2010, although experience from similar changes in other public and private sector organisations suggests a need for continuous improvement over time.

 

Spending Review 2007 provided the Department with annual growth of 1.5%, raising the Defence Budget to £36.9 billion by 2010/11. The introduction of TLCM will help to ensure that the Department delivers value for money to the tax payer and the best solution for Defence within the resources available. The through life impact of both short and long term measures is taken account of in the Department's decision making process.

 

 

Programme Slippage

 

(ii) The MoD's Annual Report and Accounts 2007-08 states that slippage on several programmes "reflected low probability but high impact risks emerging during the test and trial phases towards the end of the programmes". What lessons has DE&S learned from these programmes? Is there scope to improve how future programme risks are identified and managed given the experience on these programmes?

 

Low probability but high impact risks are more likely to occur during the testing and evaluation phase of a project. Of the major contributors to the reported forecast slippage in 2007/08, three projects - Terrier (Combat Engineer Tractor) (27 months), General Service Respirator (22 months) and Precision Guided Bomb (18 months) - were at this stage. Delays to the Naval Satellite Communication Equipment (19 months) have occurred in a second increment to the project where delivery of the capability is dependent upon the associated US programme. For SOOTHSAYER (16 months) the delay reflects technical issues (classified) relating to Sensor development and platform integration.

 

To reduce both schedule and cost risk, greater emphasis is being placed on investment prior to Main Gate decisions, the aim being to ensure greater technical, financial and commercial maturity of solutions. Evidence of this comes from the Future Carrier programme where the assessment phase was extended to further mature the design and carry out additional risk reduction work aimed at reducing both schedule and cost risk. Other examples are the Search and Rescue Helicopter (SAR H) project and Maritime Airborne Surveillance and Control (MASC) project.

 

 

Armoured Vehicles / FRES

 

(iii) What will happen to the 400 vehicles that will be removed from current operations when the new vehicles, which were announced on 29 October 2008, come into service? If they are to be retained, will the storage and / or recuperation costs be funded from the MoD budget or from the Reserve?

 

A decision has yet to be made on this issue. The Department is considering the options to ensure it maintains the best capability for Defence at the best value for money.

 

(iv) Has a contract for the package of risk reduction work relating to the FRES Utility Vehicle programme been let and, if not, when is it expected to be let? When is the risk reduction work expected to be completed by?

 

As the Secretary of State announced on 11 December, it has become clear to both parties that it would not be possible to reach agreement on the commercial conditions required to enable further progress on the basis of the current procurement strategy. The Department has, therefore, withdrawn General Dynamics (UK)'s provisional preferred bidder status for the FRES Utility Vehicle design. As commercial agreement was the first stage of the package of work, the remainder of the risk reduction process had not begun.

 

Separately, as the Secretary of State also announced, in the context of current operations and bearing in mind the considerable recent investment in protected mobility, we have concluded that the highest priority should now be accorded to delivering the Warrior Capability Sustainment Programme and the FRES Scout vehicle as quickly as possible. Whilst this will mean a delay to the FRES Utility Vehicle programme, we recognise the importance of the Utility Vehicle and are now looking at the best way to take this procurement forward.

 

 

Nimrod MRA4

 

(v) In 2007-08, the Nimrod MRA4 programme experienced an additional cost increase of £100 million and an additional three months time delay. Has the programme experienced any further cost increases or delays in the current financial year? If so, of what order? If there are further delays on the programme, are there other aircraft which might meet the required capability and, if so, are they being considered?

 

In Spring 2008 further potential cost increases were identified by BAE Systems on the procurement aspects of the Nimrod MRA4 programme. Work is underway to scope the extent of these increases and identify potential mitigation measures. The programme has not experienced any additional time delays.

 

15 December 2008