Examination of Witnesses (Question Numbers
120-139)
GENERAL SIR
KEVIN O'DONOGHUE,
DR ANDREW
TYLER AND
MR GUY
LESTER
1 DECEMBER 2009
Q120 Mr Crausby: To what extent has
the UOR programme really affected all of this? To what extent
will it continue to affect this?
Dr Tyler: The UOR programme is
obviously very specifically focussed at Afghanistan, and therefore
everything we are buying under the UOR programme is for fighting
the war that we happen to be fighting at the moment in
Afghanistan and is optimised for the conditions in Afghanistan.
What the SV programme, the FRES Scout programme is all about is
about investing in the future. That is not to say that those vehicles
once provided—if at that point we are still in Afghanistan—would
not have utility in Afghanistan; they might very well do; but
what this is about is building the Army's contingent capability
for the future and giving them a vehicle that is adaptable, versatile
and agile for them to use in the future for whatever conflict.
Q121 Mr Crausby: Am I right in saying
that the FRES programme has not stopped then?
Dr Tyler: No, it has not stopped.
General Sir Kevin O'Donoghue:
The FRES UV programme was stopped, but the overall FRES programme
is continuing.
Dr Tyler: The FRES name was used,
if you like, as a sort of overall name describing a whole family
of different types of vehicles. The reason why they were held
under this banner of FRES is because it was important, and remains
important, that those vehicles were able to operate very well
with each other, communicate with each other and be compatible
with each other in all sorts of different ways. As originally
conceived, and that concept has not gone away, what we wanted
the Army to have was a whole family of assets which were able
to work together on the battlefield. When we look back in the
rear view mirror now and think about why was it that FRES was
not successful in getting to where it needed to be in the time,
is because we were overemphasising the nature of this sort of
system, of trying to bring all these vehicles together. What we
have done subsequently is said, "We must not lose sight of
that but we must also recognise that what we are trying to do
is to deliver individual families of vehicles to meet particular
needs of the Army". So we said, "Right, we'll go back
to first principles again. We will say to the Army, `What is your
top priority?'" They made it very, very clear to us that
the Scout vehicle, which was part of the FRES family, was their
top priority, closely followed by the UV vehicle; so we said,
"Right, we'll concentrate our main effort on the Scout vehicle",
which is what we have done. We worked very hard with the Army
to get the requirement very quickly tied down, and made sure that
areas of significant technical risk and so on, or areas that would
prevent us from looking in the open market for vehicles that already
existed, were excluded. We nailed down the requirement, and since
that time we have been driving at very, very high speed to get
the project to the state where we will have a competition. We
have got the bids back in; we are deep in the assessment of the
bids now; and we will hopefully have it on contract early in the
new year.
Q122 Mr Crausby: Has Quentin Davies
changed his mind then?
Dr Tyler: No.
Q123 Mr Crausby: He sounded pretty
clear to me. He says, "It turned out to be a perfect disaster.
I will not dwell on a sad story. I have now stopped the FRES programme".
Dr Tyler: I can say, he was referring
to the FRES programme as we previously conceived it; and you yourselves
have described I think only last year the FRES programme as "a
fiasco". What we have done is said, "Let's look at the
individual constituents of the FRES programme".
Q124 Mr Crausby: The MoD's response
was that it was not a disaster and we intend to continue.
Dr Tyler: I was only describing
what you described it as last year. The Minister has clearly made
statements recently as you have just quoted to us saying that
it was not the best piece of procurement that he had ever seen.
I have to say, I would agree with that. I think there are a lot
of reasons why the FRES programme, as originally conceived, was
unsuccessful. All I am saying now is, concentrating on the positive,
we spent the whole of the last year reassembling, realigning that
programme to get it on the straight and narrow and concentrate
on delivering vehicles that the Army require, and we are within
reach of victory now in getting some vehicles on contract early
in the next calendar year.
Q125 Mr Crausby: He says, "I
will not dwell on a sad story". I think he needs to dwell
on a sad story. We need to know because it gives me the firm impression
in what he says that, "I have now stopped the FRES programme".
That needs to be clarified as to exactly where our manufacturing
base stands?
Dr Tyler: We have stopped the
FRES programme as it was previously conceived. We have restructured,
we have recast it now into a set of individual vehicle projects,
the first one of which is the Scout project; and it is still bearing
the tag "FRES" because that is its provenance in terms
of its requirement; and we are still sustaining this crucial factor
that the vehicles need to be able to operate with each other and
indeed operate with the other legacy vehicles, and indeed operate
with dismounted soldiers. That system (the "S" of FRES)
remains a very important thing. We need all of our assets on the
battlefield to be able to talk to each other and work together.
In that sense the system part of FRES lives on. The name, frankly,
I cannot get excited about. What is important is that we are now
focussed on delivery. We have got a project that is very, very
close to getting on contract with industry; and we will soon,
hopefully, have some Army vehicles on our hands under the programme
previously known as FRES.
Q126 Chairman: It is still looking
like a fiasco, is it not?
Dr Tyler: No, far from it. Absolutely
not.
General Sir Kevin O'Donoghue:
Absolutely not.
Q127 Chairman: Jolly good, because
last year we said it was a fiasco. You said, "No, no, it
is not." This year the Minister says it is a fiasco. I say
it is a fiasco now. Do you not agree?
Dr Tyler: No.
General Sir Kevin O'Donoghue:
Absolutely not. We have turned the corner, as we have in a number
of projects.
Q128 Chairman: We are trying to get
to the bottom of whether the FRES programme still exists.
Dr Tyler: We are assessing two
bids at the moment from industry against a detailed specification,
bids the paper work for which is inches high, and I have got teams
working literally seven days a week assessing those bids in order
to get us into a position to be able to award a contract early
in the New Year. That sounds like progress to me.
Q129 Chairman: Early in the New Year.
Does that run the risk of falling into the General Election?
Dr Tyler: There is always a risk,
but we are working to a programme which would deliver us a contract
award before we got into the General Election period, and I do
not know what the timing of the General Election is specifically
going to be.
Q130 Mr Crausby: It is one thing
to keep buying vehicles—I think we all accept that—it
is another thing to have a Future Rapid Effects programme that
was supposed to be planned and integrated over a period of years.
It seems to me that all of that has completely collapsed.
Dr Tyler: I think it is very important
that we deliver some vehicles, and the criticism that I think
has been levelled at FRES by yourselves and others in the past
has been that FRES was not delivering anything. Now it is on the
verge of delivering something and I have said several times that
what is really important is that we do not lose the "S"
of FRES, the system piece of it, and that we have put instructions
within our organisation to make absolutely certain that when we
buy, first of all, the first of the Specialist Vehicles, the Scout
vehicle, and then, subsequently, the other variants of the specialist
vehicles, when we buy the Utility Vehicle, that we are buying
vehicles that can operate together, communicate with each other
and work together on the battlefield along with the legacy vehicles
and also with a dismounted soldier and ISTAR assets and all the
other things that we have to link together in the battlefield.
We have not lost the essence of FRES, which was to have an overall
systems view of it—that has not been lost.
Q131 Chairman: But, according to
the Ministry of Defence, for the last 20 years this programme
has been on the verge of delivering something and some of the
people who have borne the consequences of no delivery have been
defence industry. Is there any thought of the Ministry of Defence
compensating defence industry for the money that they have had
to spend themselves on what the Minister now describes as a perfect
disaster?
Dr Tyler: I think you will find
that the key industries who have been involved in this over an
extended period of time are involved in the current bidding for
the Scout project and, therefore, they have got a potentially
very large prize there, in industrial terms, if they are the successful
winners of the competition.
Q132 Chairman: So they do not learn
from experience.
Dr Tyler: I do not understand
that question.
Q133 Chairman: They have been trying
to get some contract out of this for the last 20 years. Not a
lot has happened.
General Sir Kevin O'Donoghue:
One of them will get a contract in the first months of next year,
subject, as you say, to the General Election.
Q134 Chairman: But there is no thought,
then, of compensating defence industry for what the Minister himself
has described as a perfect disaster.
General Sir Kevin O'Donoghue:
No.
Dr Tyler: I think that, of a number
of different parties, industry also has been one of the contributing
architects to the problems that we have had with FRES in the past,
along with the MoD, along with the acquisition part of the MoD,
along with the centre, along with the Army.
Q135 Chairman: Is the Ministry of
Defence paying for the costs of bidding into this new contract?
Dr Tyler: No, we never do.
Q136 Mrs Moon: Can I get it clear
in my head. How much does this perfect disaster actually cost?
Dr Tyler: I do not think that
is a question that you can put a number on in that way. We can
say what we have spent. If I take an example as being the Utility
Vehicle programme (and I do not have the precise number here but
we can let you have it), we have spent tens of millions of pounds
on the activity that led up to the abortive Utility Vehicle competition
this time last year, which was one of the reasons, I think, that
prompted your description of the programme as a fiasco last year.
However, that is absolutely not wasted money. There might be some
aspect of it that one can point to and say that might have been
nugatory spend, but actually the vast majority of it went in looking
at the overall system approach that we were taking to FRES, and
we are using all of that, as we speak now, in the competition.
It has also given us a very firm basis of the requirement for
a Utility Vehicle, so that when priorities permit in the planning
round we will be able to very rapidly get a Utility Vehicle specified
and get the bidding underway for it. So an awful lot of the money
that we spent previously has provided value, which we are using
today and will continue to be using in the future.
Q137 Mrs Moon: How many tens of millions
has this learning curve cost: 10, 20, 30, 50, 80 million? What
are we talking about? Give me some global figures here.
Dr Tyler: I could not give you
a precise number now, but we are at the upper range of your estimate.
Q138 Chairman: The suggestion last
year was £150 million.
Dr Tyler: For the UV programme,
I think. I was going to say 140, but it is of that order.
Q139 Mrs Moon: It would have been
£140 million for the UV vehicle out of which we have learnt,
what, 10 million worth of lessons?
Dr Tyler: I think the vast majority
of the money that we have spent on the UV vehicle—and bear
in mind that that was in the context of the overall FRES programme
(and back to the point about the system, the "S" of
FRES being very important)—has been spent in understanding
a system of systems, that will be all of the vehicles that will
sit within the FRES programme going forward. I would say the vast
majority of that has not been nugatory spend.
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