Lessons (to date) from the A400M experience
Acknowledgements
A considerable number of uniformed officers and civil
servants gave freely of their time, knowledge and experience to
support this short investigation. The author is grateful to all
of them. He hopes to have captured all the implications of their
thought and to have done justice to their ideas. In order to encourage
people to speak freely, their identities are not revealed. Thanks
are also due to Cranfield's Lt Col (retd) Philip Poole who managed
this project on behalf of the university, provided timely support
and more than the occasional useful comment on the drafts. The
shortcomings of the report are the responsibility of the author,
but its qualities owe most to those who provided inputs to the
study.
EXECUTIVE SUMMARY
Background
This report was written in response to a request
from the House of Commons Defence Committee that the Ministry
of Defence should undertake an exercise on the lessons to be learned
from experience with the A400M project.
'The MoD should provide us by the end of September
2010 a written evaluation of the lessons learned from the A400M
experience which will establish the most effective basis for future
collaborative projects'.[3]
The report was drafted by Professor Trevor Taylor
of Cranfield University at the Defence Academy, Shrivenham, with
his draft then being reviewed by senior staff at the Defence Equipment
and Support (DE&S) organisation at Abbey Wood, including the
current A400M Team Leader, Director Air Support and the Chief
of Defence Materiel.
The generation of lessons from experience is an inherently
subjective activity involving judgement: different individuals
and organisations can derive very different lessons from the same
experience. Particular care needs to be taken in deriving lessons
from 'projects' which by definition have significant elements
that make them unique. Here, the lead author sought to articulate
lessons that could be derived from the views of UK participants
in the A400M project and endorsed by senior MoD staff. The particular
context of the A400M included its symbolic nature in terms of
European cooperation, its limited political support within the
UK defence sector, its large number of partners, its potential
to sell in wider markets, its importance for the civil aerospace
sector in the UK, and Airbus' success record with commercial aircraft.
The A400M was a very different prospect at the end
of 2010 from what it had been 15 months earlier. After a first
flight in December 2009, good progress was achieved including
more than 800 hours of flight testing. The DE&S Sentinel project
health tool showed the A400M in good shape with more than 75%
of the indicators involved showing 'green'.
LESSONS
L.1 Appreciate the range of motives behind participation
in a collaborative project and, if necessary, manage that range
as a risk.
L.2 & 3 Select, prepare, maintain in post staff
with the right attributes and skills.
L.4 Ideally collaborative projects should target
a significant 'gaps in the market'
L.5 and 6 Governments should fully resource the early
stages of a collaborative project so that its risks can be fully
assessed, and customers and suppliers should build and maintain
an agreed risk register.
L.7 The procurement approach should reflect risk
appetites, with a fixed price development and production contract
being recognised as risky for both customers and suppliers.
L.8 Payment arrangements should be against demonstrated
progress, and a significant final payment should be dependent
on project success. However Earned Value Management systems (EVM)
cannot be expected to operate without some flexibility.
L.9 European governments often engaged in collaborative
projects might usefully explore the idea of a shared acquisition
cycle and requirements engineering process for such projects
L.10 Governments may need to educate a commercial
contractor new to defence as to the full implications of a military
requirement and a fixed price development contract.
L.11 The scenarios against which a proposed system
is judged are central to the evaluation of that system and so
must be selected rigorously.
L.12 Incorporating a number of national requirements
into a single system brings risk but can also generate the flexible
and adaptable systems needed for the 21st century.
L.13 In assessing the risks in programmes, account
should be taken of the experiences of other government and companies
developing similar systems.
L14 A fixed price development and development contract
does not negate the need for a continuous frank dialogue between
supplier(s) and contractor(s), and consideration should be given
to the generation of a code of conduct between customer and supplier(s)
to direct their behaviour towards each other.
L.15 A fixed price development and production contract
does not negate the need for the MoD to make contingency provisions,
especially for large projects including significant technological
and managerial risk. This constitutes a further argument for the
establishment of a central MoD contingency fund as proposed by
Tom McKane in his Enabling Acquisition Change report of 2006.[4]
L.16 Decision-making on collaborative projects is
easiest with two partners. For projects where two states could
not provide a viable market, the MoD should seek to establish
an early close relationship with another major contributor in
order to be able to play a leadership and control role.
L.17, 18 and 19 Contracts should be placed with a
well-resourced prime contractor, not a single-project, special
purpose company, and account needs to be taken of all the commitments
and resources of the supplier. Governments should work to communicate
with the particular staff who will deliver a project.
L.20 The MoD and OCCAR management structures coped
well with the crisis that began in 2009 with the Airbus request
for additional resources, but thought could be given to the development
of crisis management provision for major international projects.
L.21 Greater transparency between Airbus and OCCAR
after contract signature would not have prevented the technical
problems associate with the A400M, but would have meant that such
problems could have been dealt with in a non-crisis context.
L.22 Rigorous commercial and military logic, alongside
expertise in areas such as logistics, programme management and
technology, matched with political acumen, may be needed to rescue
a struggling project, and crisis management needs to be able to
draw on such skill sets.
L.23 When a major defence project encounters technical
and managerial challenges, having a collaborative basis should
not be entirely bad news, since it has access to a broad range
of expertise and several parties are available to share any extra
cost burden.
L.24 The A400M demonstrates that Europeans can move
away from strict application of the juste retour principle. The
sub-contracting process for the A400M was clearly preferable to
that for Tornado or Typhoon, demonstrating that Europeans can
learn to improve collaborative performance.
L.25 It is difficult to find the right amount of
empowerment for the international governmental team managing collaborative
projects.
L.26 The UK can gain influence from being a second-ranked
but significant partner when it enjoys a reputation for impartiality
and expertise. The UK 2* and 3* representatives have been chosen
to chair both the Programme Committee and Programme Board.
L.27 'Be careful what you wish for' is a useful adage:
both customers and suppliers got what they wanted in the original
contract, and both suffered as a consequence.
CONCLUSION
In conclusion, there is a clear message for the UK
that collaborative projects will be necessary if any aspiration
for 'operational autonomy' is to be maintained. The A400M project
emerges as a risky but eventually positive experience, and the
most important lesson may be to work to run collaborative projects
better and not to expect to be able to avoid them.
3 House of Commons Defence Committee, Defence Equipment
2010, Sixth Report of the Session 2009-10, London, the Stationery
Office, 4 March 2010, p.23, http://www.publications.parliament.uk/pa/cm200910/cmselect/cmdfence/99/99.pdf,
accessed 25 October 2010. Back
4
Enabling Acquisition Change: an examination of the Ministry
of Defence's ability to undertake Through Life Capability management,
A Report by the Enabling Acquisition Change Team leader, London,
MoD, June 2006, paras 1.9 and 6.30 Back
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