By Julian Nettlefold
8 Sinclair Gardens
London W14 0AT
0207 610 5520
The Rt. Hon. Liam Fox M.P.
Secretary of State for Defence
The House of Commons
London SW1A 0AA
Friday, 21 May 2010
After many years in Opposition, you and your team now have the opportunity, with the forthcoming Strategic Defence Review, to develop a whole new process in the Ministry of Defence procurement process. The Gray Report has laid the foundations for wholesale reform of the process which could save billions, streamline procurement and buy the best equipment. Since Labour came to power, our readers and the Editor have made many comments about the equipment purchased and the means by which it was or was not, in the case of FRES, achieved. Below we give a synopsis of these comments as an aide memoir:
1. Any Corporation in a debt crisis will sell assets. The MoD has assets in abundance, may lying in dark expensive warehouses expensively staffed or in land waiting for the time for development.
a) Much of this land was slated for development under deals with developers, but they have turned their back on these deals following the collapse of the market. It may be soon to re-look at these assets.
b) Much of this land and old airfields and barracks have extensive assets lying underground, such as old pipes, cabling and other metals. More use should be made of such Companies as Gilmerton Land Services to turn these assets into money at no cost to the MoD. This Company has already paid the MoD and BAE Systems, millions of pounds.
c) Warehouse content. The size of DISDA in particular shows the size of the stored inventory in the MoD from tanks, vehicles, engines, spares, ships, aircraft and engines. To save storage costs, we recommend and immediate inventory of what is in store and to sell those items which are not required.
d) In the case of vehicle spares which take a 6.5% tax by the MoD, we recommend that the MoD pass management of all these spares to industry.
2. Cost of Procurement. For years industry has been complaining about the huge cost of procurement which run into many millions for large contracts. These costs end up in higher equipment costs. The UOR process has shown that equipment can be procured in a fast, cheaper and streamlined manner, with no ‘gold plating’ of requirements – this process should be extended and refined.
3. Future Equipment Budget and R&D. The MoD has a huge £120 million Future Equipment Budget spent on such Programmes as CTA which suck up millions of pounds and sometimes never see the light of day. R&D, in many cases, has become R&D for ‘R&D’s sake’ with nothing tangible coming out the other end. A proper Panel of Experts should be formed to analyse these projects and see whether they are technologically viable. If not they should be cancelled. This should also apply to large contracts where changes in specifications have made the equipment too expensive, out of date or unreliable. Note should be taken of existing technology available from other countries which could be bought off-the-shelf, in the case of CTA, Bushmaster from ATK in the USA.
4. Project Teams at Abbey Wood. By their very nature these project Teams are in the business to evaluate equipments which, in some cases, become self-satisfying to those jobs involved. More key personnel who understand the technology involved should be inserted in these teams.
5. FRES – it’s time to take stock of this monolith and cancel it and start again. Tinkering with a Study Contract from GDUK based on a vehicle which is nearly twenty years old since inception, it not the way to give the army the right vehicle for the right war. When these vehicles were conceived the process of war was different and IEDs and suicide bombers not even on the radar. The use of composite materials in vehicles has grown at an astonishing pace since that period; these are lighter and more effective and