Troops and Taxpayers' shoulder the burden of MOD failings

May 15, 2009 2:46 PM

Today the Public Accounts Committee (PAC) published the results of its long running enquiry into the Ministry of Defence’s (MoD) 20 largest military procurements. Pulling no punches in its criticisms, the report highlights a total cost overrun of £205 million and 96 months of additional ‘slippage’ from set target dates, equivalent to running 40 years late. These are the worst results since 2003. Estimated project costs between these 20 projects now sit in the region of nearly £28 billion, 12% over budget. And the consequences of these failures are clear on the ground; the Army’s new ‘Terrier’ armoured engineer vehicle in more than two years late, and in the mean time soldiers are forced to use far less protected JCB diggers, and at a further additional cost.


Defence procurement is not an easy task, and some of the problems laid out in the report are understandable; demands often change almost as soon as you make an order. The MoD is still trying to reorientate the armed forces to the intense climate and new type of ‘street war’ in Afghanistan and Iraq, in terms of weather just as much as strategy. Transporting around 300,000 personnel and 90 tonnes of freight into two mid-sized conflicts over the last two years, along with responding to rapidly changing needs, is a considerable challenge.


But these are not new problems, and as the PAC Chairman himself points out, the MoD has had 8 years to sort out supply chain problems. It introduced acquisition reforms in 2001, yet the evidence shows it is still failing to make better investment decisions and improve the execution of its projects. The PAC report chronicles widespread poor project ‘management’ and ‘a lack of realism’. It stresses that a more consistent skill level across staff is required.


The lack of realism is illustrated by the use of only one prototype vehicle in assessment and procurement. The Terrier combat vehicle for example (mentioned above), has been delayed by 27 months because of problems with the prototype. There is no alternative vehicle approved, so the army is forced to wait for the problems to be ironed out. The PAC report concludes that the MOD has been not only ‘over-optimistic’, but that it set ‘unachievable cost, time and performance objectives’.


It has been said before, but the MoD must build in proper contingencies in case of project delays. Troops put themselves in the line of fire daily, and part of the agreement is that they are provided with equipment needed to the job; they should not be forced to work with Land Rovers that offer little protection or Hercules jets kept on past their ‘Out of Service’ date. The MOD must work with industry to assess whether the project can be delivered within agreed timescales and with the right level of technical and management skills. It should be more realistic about the costs and delays likely; after half a century of less then glittering procurement, officials must be awake to all possible eventualities, and aware that the worst of them are always likely to happen. Similarly, procurement overseas is understandable if it is the cheapest option, but having a project team based abroad and the MoD team based in the UK (as increasingly happens) has clearly made it difficult to resolve arising problems (the PAC report details). Few private companies would let procurement projects run so staggeringly over time and budget; it is unfair that the troops and taxpayers should continuously shoulder the burden of these failings.

Today the Public Accounts Committee (PAC) published the results of its long running enquiry into the Ministry of Defence’s (MoD) 20 largest military procurements. Pulling no punches in its criticisms, the report highlights a total cost overrun of £205 million and 96 months of additional ‘slippage’ from set target dates, equivalent to running 40 years late. These are the worst results since 2003. Estimated project costs between these 20 projects now sit in the region of nearly £28 billion, 12% over budget. And the consequences of these failures are clear on the ground; the Army’s new ‘Terrier’ armoured engineer vehicle in more than two years late, and in the mean time soldiers are forced to use far less protected JCB diggers, and at a further additional cost.


Defence procurement is not an easy task, and some of the problems laid out in the report are understandable; demands often change almost as soon as you make an order. The MoD is still trying to reorientate the armed forces to the intense climate and new type of ‘street war’ in Afghanistan and Iraq, in terms of weather just as much as strategy. Transporting around 300,000 personnel and 90 tonnes of freight into two mid-sized conflicts over the last two years, along with responding to rapidly changing needs, is a considerable challenge.


But these are not new problems, and as the PAC Chairman himself points out, the MoD has had 8 years to sort out supply chain problems. It introduced acquisition reforms in 2001, yet the evidence shows it is still failing to make better investment decisions and improve the execution of its projects. The PAC report chronicles widespread poor project ‘management’ and ‘a lack of realism’. It stresses that a more consistent skill level across staff is required.


The lack of realism is illustrated by the use of only one prototype vehicle in assessment and procurement. The Terrier combat vehicle for example (mentioned above), has been delayed by 27 months because of problems with the prototype. There is no alternative vehicle approved, so the army is forced to wait for the problems to be ironed out. The PAC report concludes that the MOD has been not only ‘over-optimistic’, but that it set ‘unachievable cost, time and performance objectives’.


It has been said before, but the MoD must build in proper contingencies in case of project delays. Troops put themselves in the line of fire daily, and part of the agreement is that they are provided with equipment needed to the job; they should not be forced to work with Land Rovers that offer little protection or Hercules jets kept on past their ‘Out of Service’ date. The MOD must work with industry to assess whether the project can be delivered within agreed timescales and with the right level of technical and management skills. It should be more realistic about the costs and delays likely; after half a century of less then glittering procurement, officials must be awake to all possible eventualities, and aware that the worst of them are always likely to happen. Similarly, procurement overseas is understandable if it is the cheapest option, but having a project team based abroad and the MoD team based in the UK (as increasingly happens) has clearly made it difficult to resolve arising problems (the PAC report details). Few private companies would let procurement projects run so staggeringly over time and budget; it is unfair that the troops and taxpayers should continuously shoulder the burden of these failings.

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