13 May 22. An Op-Ed piece published in ‘The Times’ on Saturday is not what the new boss of the Abbey Wood, Bristol based Defence Equipment & Support (DE&S) Andy Start will have wished to read.
Mr. Start already knows that the Public Accounts Committee has said that the system that the procurement system is broken and he will also be well aware that one of the House of Commons most vociferous critics, Mark Francois, recently called the Abbey Wood procurement based system “a shambles and that presiding over this steaming heap of institutional incompetence is the minister” Jeremy Quin.
Remarks made by Mark Francois are more than a tad harsh and indeed, little short of insult to DE&S staff and particularly to the outgoing CEO Sir Simon Bollom and who has made significant progress in reshaping the defence procurement system. OK, so that job is far from being finished and when it comes to the appalling mess that is the Ajax Infantry Fighting Vehicle procurement please bear in mind that Bollom inherited that particularly mess and that suffice to say, the sooner that this project is dead and buried the better.
Yes, there is ongoing blame attached to DE&S in regard of its ‘policing’ of the Ajax IFV contract and perhaps believing a little too much of what the contractor was telling them. But remember that the Ajax procurement harps back to another era of defence procurement, long before Simon Bollom or for that matter, his poorly chosen predecessor arrive at DE&S and when in this case, it appears that General Dynamics UK and maybe also the parent US company were using retired senior members of the military to push the so- called advantages of buying an armoured vehicle that was not already proven in service.
Ajax the wrong vehicle for the job and one that has been found seriously wanting through the protracted procurement process. There is nothing good to say about Ajax save that it was at least a procurement based on a fixed price contract signed in 2014 meaning that it will be GD that picks up the tab for failure if it fails to get the blessed thing right. The latter appears to me to be very unlikely. To make matters worse I recall when contracts were finally signed following six long years of lobbying and promises made that the ‘vehicle’ would be ‘manufactured in the UK’ what we got is what I warned of at the time, a ‘vehicle’ that would ultimately be glued together at a converted former fork-lift manufacturers site in Merthyr Tydfil made up of, apart from the UK manufactured turret and tracks, predominantly Spanish made component parts. There is, I might add, nothing wrong with either the turret or the vehicle tracks!
Enough of Ajax save to say that I hope all those that played a part in the Ajax procurement between 2008 and 2014 and subsequent to the contract signing will not be let off the hook lightly at what I envisage being another inevitable inquiry into how the procurement was done and subsequently implemented.
In recent weeks someone suggested to me that Ajax was the worst procurement that they had witnessed since the Nimrod MRA2/MRA4 conversion, a procurement programme that was eventually scrapped in 2010 for reasons that I will not go into here. That point was not lost in the Times article but is, as far as I am concerned, little more than an object of procurement history and one that bears little if any similarities to Ajax.
It is of course, all too easy for MP’s and others to criticise MOD and specifically, DE&S performance. It is equally right to say that the MP’s, House of Commons Select Committees and the National Audit Office (NAO) have the right to criticise when the procurement process appears to have failed. It is also far too easy in this day and age to blame procurement issues on industry rather than the MOD and the procurement system that it operates, particularly without having sufficient evidence.
And yes, DE&S needs to redouble its efforts to help small and medium sized entities to break through the bureaucracy and find a way of getting themselves and the products and technology they have into the defence equipment organisation.
The culture of defence industry may be summed up as being an absolute desire to succeed and one that provides the ultimate customer with exactly what they want. Sadly, all too often these days, industry critics suggest the object as being one of unbridled pursuit of profit. That is both wrong and unfair but such is the world we live in. Yes, industry does occasionally get it wrong but all too often it receives and unfair and unjust level of blame that ignores the constant mass of changes demanded by the customer and that impact and raise costs across the particular programme.
Sadly, the reality is that the system is partially flawed because large procurement decisions are often politically as opposed to militarily and need based. Some are badly thought through and advised.
That is not to suggest, for instance, that we should allow the Army, Royal Navy or Royal Air Force to have complete or even the final sway over what equipment is procured with tax-payers money. Far from it and heaven forbid.
But it is to suggest that what the UK defence procurement system appears to lack and may need at the outset of any large programmes is some independently based judgement that is neither politically or militarily influenced.
That by the way is not to suggest that we should hand important procurement decisions over to a bunch of academics and who I am sure would probably suggest that we need to scrap the notion of maintaining sovereign manufacturing capability in the UK in favour of buying off the shelf. Heaven forbid if that was deemed to be the way forward!
For some strange reason though the UK has got into the habit of having an Inquiry into procurement issues and problems after the event rather than seeking to look at what is being acquired before contracts are signed. Why not have an independently based inquiry before the event and ensure that the MOD procurement process itself is fit for purpose and that the project has sufficient numbers of experienced people and skills to see it through.
I am not about to look at their respective CV’s but I would question what experience and knowledge does a Secretary of State for Defence, his Defence Procurement Minister, the Chief of Defence Staff, his Vice Chief and the Service Chiefs have in respect of procurement contracts and financial and budget issues that automatically go alongside. Of course, they all rely on advice – or we hope that they do – but is that enough?
Rarely a week goes by without one seeing a headline suggesting that the procurement system is flawed or has failed. Whether correct or not, there is an additional problem here in relation to the structure of MOD organisations such as DE&S – this being in the mix of civil servants and members of the military and sometimes a lack of specialist experience and knowledge.
Part of this can be put down to the inadequacies of the military promotion system – years ago I recall being told that it was almost a standing joke that if the promotions boards didn’t know what to do with someone there was always the opportunity to despatch them for a spell in DE&S. They came with no experience of the procurement culture albeit that they may well have had useful hands-on experience within military operation. They knew nothing about time, cost, contractual requirements or accountability and they often spent the best part of the first-year learning what it was all about before working on a specific project.
Once they got the hang of it, they would probably be allocated to one or a number of specific procurement or support contracts in order to oversee and work with all the various parties involved. Then, just as they were starting to play a useful part in the overall process, they were promoted to somewhere else or maybe decided to leave the MOD.
The above is I know something of a simplification but it isn’t far from the truth. By the time strong contacts had been established with their counterparts in industry it was almost time for them to move on. Interestingly my own analysis suggests that the situation in industry is quite the opposite and that most of those working on a specific project on year one were still in place five years later.
But the MOD and DE&S isn’t all about serving members of the military being engaged on procurement programmes that they have too little experience. The MOD as a whole, employs over 55,000 members of the civil service – a figure that is recent reports suggesting that HMG seeks to cut overall numbers of civil servants employed across all government departments by 90,000 might suggest that the MOD would need to cut numbers of civil servants employed by another 10,000.
If that was to occur one would be entitled to suggest that problems at the MOD and DE&S might well be about to get worse rather than better. Civil servants play a crucial role across the whole of defence. They bring experience just as they bring some degree of very necessary consistency. They are an essential part of the skills capability required in order to ensure the wheels of the procurement system itself are properly oiled.
Since 2010 numbers of MOD based civil servants have been cut by around 30%. I am not suggesting that these should not have occurred but whilst MOD may well have lost a lot of ‘hangers on’ they have also lost a very large amount of experience. Clearly, many of those previously employed left because much more of the whole UK defence model was being outsourced.
To Be Continued!
CHW (London – 16th May 2022)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785