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One Third of UK Major Procurement Programmes Need ‘Urgent Action’

Government Watchdog’s Latest Report Pulls Few Punches

Industry is letting the UK MoD down: the Department lacks the resources and skills necessary to ensure timely delivery of important new capabilities; and funding shortfalls are doing broad harm. These are the rather stark conclusions of the latest report on British defence procurement, published on 18 March by the National Audit Office (NAO).

The report report softens the blow marginally by acknowledging that delays today are less severe than they were ten years ago. However, it says that 10 of the 32 most significant capabilities in the Department’s Major Projects Portfolio (DMPP) either require urgent action to address major delivery risks delivery, or are undeliverable on the approved timescale, according to their Senior Responsible Owners (SRO). The average delay to projects yet to achieve initial operational capability (IOC) is 12 months; for those that have achieved IOC but are not yet fully operational – 26 months.

One of the most persistent problems is suppliers delivering faulty or late equipment, a problem that in some cases has persisted for years and has compromised operational capabilities, the report says, adding that SROs report serious concerns regarding supplier engagement or delivery performance, from poor quality control to lack of transparency. Within MoD itself, commands and delivery teams “lack capacity and skills,” with six of the 32 DMPP capabilities facing shortfalls of more than 20% in their programme teams.

Of the 17 most significant capabilities yet to achieve IOC, 12 are delayed. The ASTUTE-class submarine HMS AUDACIOUS, for example, was due for operational handover to the RN in August 2019, a date that has shifted to January 2021 thanks to what an MoD source terms emergent technical issues within the build programme, requiring unplanned repair and rework. In other examples, the Batch 2 OPV HMS FORTH had her IOC delayed for over a year by problems with build quality, while full operational capability (FOC) for the WATCHKEEPER UAS has been delayed by several years due to equipment problems. Technical issues continue to affect the availability of the F-35B LIGHTNING II and problems with its simulators are affecting training.

As well as delays, the NAO also calls out underachievement against capability milestones that count towards IOC or FOC, while acknowledging permitted exceptions, of which there have been a large number. The report says 102 exceptions were granted in five out of six case studies in which the option was available. Of these, 67 applied to the F-35’s IOC. In most of these, the aircraft did not achieve the required performance at the due date but the SRO declared it good enough.

Tellingly, the word “shortfall” appears 10 times in the report, mostly referring to capabilities but also to the size of the MoD workforce, the number of SROs and funding, while the word “funding” appears 22 times, mostly in association with troubling words such as “shortages”, “insufficiencies”, “shortfalls”, “challenging” and “delays”. This chimes with the NAO’s assessment over the last three years that, against the budget allocated by the government, the MoD’s overall equipment portfolio remains unaffordable. Trying to do too much with too little can only exacerbate industry’s shortcomings.

Peter Donaldson in London for MON

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