01 June 22. In a report today the Public Accounts Committee says the Ministry of Defence has “once again made fundamental mistakes in its planning and management of a major equipment programme” and is “failing to deliver the enhanced armoured vehicles capability that the Army needs to better protect the nation and meet its NATO commitments.”
The PAC says the Ajax programme, begun in 2010 and “intended to transform the Army’s surveillance and reconnaissance capability” has “gone badly wrong”. MoD has a £5.5bn firm-price contract with General Dynamics Land Systems UK for the design, manufacture and initial in-service support of 589 Ajax armoured vehicles, and initially expected to bring Ajax into service in 2017 – but subsequently missed a revised target of June 2021.
By December 2021 MoD had paid General Dynamics £3.2bn for just 26 Ajax vehicles, none of which it can use: MoD still does not know how to fix noise and vibration problems two years after identifying they were injuring soldiers using the tanks.
More than a year behind the revised schedule, slow progress and continued delays create “significant risks to value for money, put at risk the Army’s plans for transformation and mean soldiers will have to use existing outdated vehicles for longer”, while the “programme remains under significant pressure”. Trials involving Army crews have been suspended indefinitely and noise and vibration issues remain unresolved. MoD and General Dynamics remain in dispute over payment.
PAC report conclusions and recommendations
- The Department is failing to deliver the enhanced armoured vehicles capability that the Army needs to better protect the nation and meet its NATO commitments. The Department is upgrading the Army’s armoured vehicles to exploit modern technology and meet future threats, and it remains committed to delivering the Ajax programme to help achieve this. Ajax is central to the Army’s plans for developing a “system of systems” in which capabilities, such as armoured vehicles, infantry, and artillery, cooperate, using common information about targets. However, the programme has been running for 12 years but has not yet delivered a single deployable vehicle to the Army. The Department and General Dynamics remain in dispute over unresolved contractual, safety and technical issues but the Department seems reluctant to consider alternative options should the Ajax contract fail. The Army is bullish about managing the implications of delays to introducing Ajax and its ability to meet its NATO commitments, but has had to plan a series of operational compromises to achieve this. It is “cautiously optimistic” that the full Ajax capability will enter service by 2030, as part of the Army’s transformation outlined in the Integrated Review. However, any further delays to the Ajax programme will increase the risks of not achieving this aim.
Recommendation: The Department must assess the longer-term implications of delays for the Army’s transformation programme and investigate alternative options to Ajax now so that it can act quickly if the contract with General Dynamics collapses. We will expect an update on this when we next take evidence from the Department and answers by December 2022.
- The Department has once again made fundamental mistakes in its planning and management of a major equipment programme. Ajax’s design is based on a pre-existing vehicle, but the Department’s 1,200 capability requirements meant that, in effect, it was developed from scratch. However, the Department and General Dynamics did not fully understand the complexity and challenges of this hybrid approach and did not manage design changes effectively. The Department says it has reviewed its approach to requirement setting and now only approves programmes with a reasonable number of requirements, such as the 150 to 200 for the purchase of Boxer armoured personnel carriers and the upgraded Challenger tanks. Ajax’s problems were exacerbated by inadequate governance and programme management failures. The current senior responsible owner, appointed in October 2021, is the first to be full-time, but even he has additional corporate roles and responsibilities. The programme’s reset in 2018 introduced greater complexity and the revised programme schedule was unrealistic. While the profile of upfront investment before large-scale manufacture is unsurprising, the increased overlap of the demonstration and manufacturing phases means that unresolved technical and safety issues have remained whilst production continues. In response to these problems, the Department has commissioned a QC-led Ajax Lessons Learned Review into how it can deliver major programmes more effectively, including sharing and escalating information.
Recommendation: Once the Ajax Lessons Learned Review has reported, the Department should write to the Committee setting out how it will incorporate the recommendations into its future management of equipment programmes – considering the findings and recommendations of our and the NAO’s reports – to prevent this familiar list of mistakes being repeated yet again.
- The failure to escalate and address noise and vibration issues in a timely manner shows that the Department must simplify its over-complex safety processes and change behaviours. The Department acknowledges that it has injured some soldiers, which it rightly describes as “unforgivable”. It was slow to escalate concerns about noise and vibration because its processes were over-complicated, and parts of the Department lacked authority to ensure safety issues were addressed before trials began. The Army says it now places greater emphasis on safety and looking after its personnel, but acknowledges there is still more to do. The Department has started to implement the recommendations in David King’s noise and vibration report and introduced a new web-based application, which has led to a 40% increase in soldiers reporting incidents since January 2022. However, it needs to ensure the flow of information from junior ranks to senior officers will be thorough and transparent. Ajax’s safety problems have led the Department to investigate broader issues around noise-induced hearing loss, which results in the largest number of claims in the armed forces compensation scheme.
Recommendation: The Department should set out the changes to its safety processes that it is making in response to the King Report and how it is monitoring the effectiveness of these initiatives. This should include the steps it is taking to improve openness and communication, including the use of the new web-based application. The Department should provide us with an update on progress when we next take evidence.
- Nearly two years after identifying injuries to soldiers, the Department still does not know how to fix the noise and vibration problems. General Dynamics must produce vehicles that are safe and has proposed modifications to reduce noise and vibration levels. The Department has commissioned trials to test the efficacy of these modifications. It intends to analyse test data and better understand how things works in practice before accepting General Dynamics’ solutions. The Department has also found that the headsets worn by crews – which the Army uses on all armoured vehicles – did not provide expected levels of protection. It will start upgrading its headsets from August 2022. It does not expect to make decisions on noise and vibration issues – and how to move the programme forward – until late 2022, more than two years since it first identified potential injuries to soldiers. It remains unclear whether the proposed modifications – which seek to reduce the impact on crews – will be effective or whether a more fundamental redesign of the vehicles is required. This could have significant implications for the programme because General Dynamics had built 324 hulls by December 2021. In addition, the Department cannot be confident that the programme will not encounter further technical or safety issues. It has proven only 30% of technical requirements so far and is tracking 136 ‘concerns’.
Recommendation: As a matter of the utmost urgency, the Department must establish whether noise and vibration issues can be addressed by modifications or whether they require a fundamental redesign of the vehicle. If the latter, the Department must decide whether the right course is to proceed with General Dynamics or if it should opt for an alternative. We will expect an update on this when we next take evidence and an answer by December 2022.
- We are doubtful that the Department can recover the programme within existing costs and commercial arrangements. The programme remains under significant pressure. It is more than a year behind even the revised schedule, trials involving Army crews have been suspended and noise and vibration issues remain unresolved. Despite these problems, the Department intends to continue holding General Dynamics to the current firm-priced contract for delivery of 589 vehicles. It claims that the relationship with General Dynamics is good and that both parties are working collaboratively. However, because of programme delays and missed milestones, the Department estimates that it owes General Dynamics £750m for completed work, but has not paid anything since December 2020, and the parties remain in dispute. It is important that the Department uses appropriate commercial arrangements to incentivise delivery of the required capability, and it is seeking to resolve the technical issues and recover the programme through existing commercial terms. It says that the next step is to assess and seek internal approval for any changes to the schedule and definitions of capability, and agree any revisions to programme milestones with General Dynamics. However, the Department will not complete this process until it has determined how to resolve the noise and vibration issues, and so cannot say when it will decide on the programme’s future.
Recommendation: Whether or not the Department concludes that it should continue with the current Ajax contract, it must review its commercial arrangements to ensure these are appropriate to incentivise its prime contractor to deliver the programme and agree a recovery plan.
- The Department’s plans for using Ajax are at risk because of uncertainty about what constitutes full operating capability, when this will be achieved and how Ajax vehicles will be enhanced in the future. The Department’s original in-service date, 2017, was revised to June 2021, which has also been missed. It will not set a new initial operating capability date until it has resolved the on-going noise and vibration problems, and has no confidence in achieving the full operating capability target of April 2025. Therefore, 12 years after letting the design contract, the Department has no realistic target dates for introducing the Ajax capability. We are also extremely concerned that the Department may accept compromises on the level of capability that will be achieved at these milestones. Further, the Department is encountering difficulties on the enabling programmes needed to deliver the intended capability improvements and allow the Army to deploy Ajax on operations. In particular, delays to the Morpheus programme mean it will take longer before Ajax has the enhanced digital and communication systems which are so important to the way in which the Army plans to use the vehicles. The Department is seeking to develop a longer-term relationship with industry to enable upgrades throughout Ajax’s service life to keep pace with technological developments and future military threats.
Recommendation: Once the Department has reached agreement on solutions to the noise and vibration problems, it must agree a revised schedule and critical path for initial operating capability and full operating capability, covering all enabling programmes. This should include clear definitions of what will be delivered at each stage, without reducing requirements just to achieve these milestones./ENDS
Full details of the inquiry including evidence received (under “Publications”): https://committees.parliament.uk/work/6487/armoured-vehicles/