Gray Report into Defence Acquisition published.

[Jabba_TG12]

Can be found on the MOD AOF site, top right hand corner.

Making interesting reading....

[SirPeterHardingsLovechild]

MOD suspects they're rubbish, pays consultants to investigate, and can now conclude...

They are rubbish, and they know they are!

[Squirrel 41]

A solid - really solid - piece of work; wish I'd written it. Don't necessarily agree with all of it (contractorising DE&S doesn't feel deeply clever) but otherwise it shines a light on the things that MoD wouldn't / doesn't like.

If implemented, this could really work! :) However, I rather fear that the MoD will procrastinate until the furore has passed and that then they'll carry on as before - and probably with similar results. :hmm:

Rant on.

SHOW SOME MORAL COURAGE !!! :ugh:

Rant off.

S41

[Dengue_Dude]

SHOW SOME MORAL COURAGE !!!

That about covers it.

[tucumseh]

Don't necessarily agree with all of it (contractorising DE&S doesn't feel deeply clever) but otherwise it shines a light on the things that MoD wouldn't / doesn't like.
I’d say that contractorising even one aircraft/equipment IPT would shine a light on precisely those things MoD doesn’t want exposed.

For example, how on earth would you incorporate the raft of formal rulings imposed upon some procurement staffs by CDP and Mins(AF) into a contract, such as…….


If an aircraft is not airworthy, it is acceptable to make a false declaration that it is.


I can’t imagine for one minute any Westland staffs (for example) accepting such a condition given their long history of complaining against this ruling.


Or,

We shall not tolerate you delivering to time, cost or performance if other programmes in the IPT are not.


I think companies would be looking for a financial incentive to deliver to TCP. I accept this would cost more initially, but the sheer efficiency caused by shorter programmes, fewer cost over-runs and contented Users would soon outweigh that.


And having this under a formal contract arrangement would largely solve the biggest bugbear in any programme – wholesale, unfunded changes to the endorsed requirement.

I haven’t read the entire report yet, but a quick look indicates it doesn’t differentiate well enough between budget and fair and reasonable cost. While many projects may be over-budget, they do not exceed a fair and reasonable cost for the actual requirement. Which gets you down to the age old and most basic question in all acquisition – Who is responsible for Materiel and Financial Provisioning? I’ve asked this question in every project team/IPT I’ve worked in since the process was abandoned in the early 90s – not one person has answered. As time passed, fewer knew what I was talking about.

In practice, what this means is that the endorsed requirement often omits fundamental pre-requisites to a successful programme. For example, it is common to omit training, including the simulator, in its entirety. Similarly, sufficient spares, tools, test equipment and accurate tech pubs.

I recall one particular helicopter Director going ballistic at the mere mention of buying a simulator, walking away when reminded that without a trained aircrew you can’t demonstrate airworthiness or achieve an In Service Date (neither of which bothered him in the slightest). The User, but not their aircrew, actually agreed with him. As did our Director General (2 Star) and CDP (4 Star). We ignored them all and, much to their annoyance, delivered to TCP. The programmes that did what they were told are the subject of annual trashings by the PAC, NAO and HCDC. “Gold Standard cock-ups” is the phrase, I think.

Contractorising would get rid of those dangerous attitudes at a stroke. It may not work across the board, but I’d certainly give it a go, perhaps on a trial basis. As a project manager though, the one thing I’d want is the “prime” having was the right to “hire and fire” his suppliers. One cock-up you get a yellow card, a second and you’re red carded (or alternatively financial penalties). We go somewhere else, regardless of how well you know Ministers and senior officers. (Which, believe me, is another major bugbear. It would negate another CDP/Ministerial ruling – that if you cock-up you can be paid in full, and then paid again to try to get it right, and then paid………..).

[gijoe]

Squirrel,

Contractorisation is the only way forward - most of the Civil Servants employed in De&S are simply not upto the job and, even worse, have no desire to aspire to be upto it. There will always be a place for the contractor.

In many of the projects or programmes the real expertise will come from brought-in personnel that, in many cases, is all that keeps things on track. Civil Servents almost accept it as part of their job to be ignorant about their projects - 'that is what the military or contractors are for'. The end user may as well be on the moon as long as the programme is on time and coming in on cost - that is all that matters to them because = bonus!! There are some much cited examples of lateness and overspend but some do come in on time and they tend to be simple projects. Industry laughs at the MOD and its processes...

So bring it on - DE&S needs a kick up the backside and DE&S needs to get smart when holding industry to their promises and contracts. This is my take gained from a not wholly-enjoyable experience in DE&S so please don't knock it :ok:

[Mr C Hinecap]

I disagree on contracting DE&S. The culture needs changing, not eradicating. There are some good people but the culture is driven by lifetime civil servants who tolerate behaviour and practices that would never be allowed in a successful business.

[GOLF_BRAVO_ZULU]

What, like trying to work with a Contractor to overcome a genuine, unpredictable difficulty and then finding that you’re not to be allowed to flex your funding between Years? Like having your carefully worked out funding bid subject to a scrutiny “realism adjustment” and, as a result, there is insufficient budget to pay for work or material at the time already agreed with the Contractor?

There are a lot of dedicated and motivated people in DE&S desperately trying to make the system work inside the Government (Treasury) finance rules and “precautions”. Any lack of knowledge and expertise in some areas is probably due to the ridiculously high rate of turnover of staff managing their own careers (also Government policy). That isn’t a problem for military staff as their high turnover and lack of continuity is already an accepted part of the process.

Top marks to yer man Gray for re-stating the bloody obvious in a new set of phrases.

[Not_a_boffin]

GBZ has it right. It's the inflexibility of the financial control system (compounded by all the nause of introducing and maintaining RAB) that leads to the endless rounds of savings measures which all inevitably result in cost escalation. There are also undoubtedly elements of requirement creep/change as tucumseh points out, not to mention pure unadulterated contractor FUs like MRA4 and Astute.

Put these together, particularly as the budget line is controlled at the eastern end of the M4 and you get your basket-case budget.

[Squirrel 41]

Tuc, N-A-B, GBZ, gijoe;

Good grief, a sensible discussion on Pprune for once. :D

My take is that there are some procurement disasters that we've discussed ad naseum - Nimrod and Astute are the most prominent and in both cases MoD had fixed price contracts and refused to enforce them. Why? It's absurd and there should be sackings and public vilfication of the officers and civil servants who allowed this to happen.

We also have a situation where the requirements change post Initial Gate and post Main Gate - which is always going to be expensive. If a requirement has been fully funded, (itself unlikely, as Gray points out - the structural biases are all in favour of massive optimism bias) then central Jt Cap budget should provide the cash to change things.

Overall, it is no surprise that there are therefore the number of projects that come in on budget to spec and on time are - Tuc aside - vanishingly small. But it is a problem - because money wasted on failed procurement is money not available for the weapons and supplies that are required by boys and girls in theatre. Those involved in the serial f*ck-ups should take a long look at themselves, and hang their heads in shame.

Somehow doubt that they will. :hmm:

S41

[tucumseh]

Well, I read it and there is undoubtedly some good stuff in there.


But it starts off badly. The Executive Summary contains some real howlers – I wouldn’t be surprised if many in MoD didn’t go any further. For example he clearly doesn’t understand the role of DLO (as was).

Nor does he appreciate (seemingly) that many of his recommendations are (a) reversions to old policies – he doesn’t seem to know the structure of MoD beyond 1999 and (b) are interlinked.

For example, he makes the recommendation to move to 10 year rolling costings – an excellent description of the old LTC process. Elsewhere, he calls for a top down approach, not bottom up – again a perfect description of the LTC 1st, 2nd and 3rd order assumptions (where you cannot have a 2nd OA without a complementing 1st etc), but he doesn’t mention them; and doesn’t link the two.

He also calls for better articulation of the requirement, but without mentioning the obvious; that to cost, one must first quantify. He correctly notes that programmes aren’t costed properly from the outset, but doesn’t know that the above LTC process, especially the 1/2/3 Order Assumptions process, would go a long way to solving this problem.

Here’s my suggestion – dig out the old mandated LTC Procedures (which were never actually rescinded), and IMPLEMENT them.


Ah, implementation. He talks about this, and the skills needed to do the job. Excellent stuff in the main. He calls for better and more engineering skills and training, noting that many project managers are given jobs they are ill-trained for. But he doesn’t appreciate that the main reason for the last is that most DE&S direct entrant PMs have not been required to gain experience and demonstrate competence at around 5 previous grades. He makes a recommendation that 1* and above should not attain that grade/rank unless they have the requisite project management experience (he doesn’t mention competence). He doesn’t define experience, but if it is, say, 20 successful projects and is applied retrospectively, goodbye most IPTLs and the DE&S hierarchy. Come to think of it, goodbye if it is one project, successful or otherwise.

He talks much of IPT Leaders, the need for retention, double tours, experience etc. What he completely misses is that many IPTLs in DE&S are merely doing jobs which their older staffs regard as something you do before becoming a project manager. See above. Managing a multi-disciplinary team? Look at the grade description of the most junior PM in DE&S (Grade C2). ALL must have the proven ability to manage a 200 strong team. Next step up (C1) - 600. Because he doesn’t go back far enough, he doesn’t appreciate that the first iteration of IPTs, in 1989/90, had a C2 (HPTO in those days) as leader, with roles and responsibilities far more complex and demanding than those of many current IPTLs, 3 grades higher. Gray gets it right, but perhaps for the wrong reason, or without full understanding. In practice, and this is a major problem in IPTs, the structure is often upside down. The “leader” is often grossly inexperienced with no track record. Gray does dwell on this general problem (inappropriate promotions) and makes excellent points.

All in all, an excellent paper, collating many long standing recommendations (although I’m not sure he realises this). Implementation will need to be carefully managed. For example, the recommendation to strip out the superfluous senior management must happen first, which will get rid of most of those who would otherwise scupper his plans.

A final point. He recommends PUS, as Principal Accounting Officer, be made legally liable for Defence expenditure. Excellent. This would give PUS teeth which, in theory, he already has, but in practice lacks because he is so often over-ruled and undermined by those immediately below and above him. For example, he issues strict, mandated rules on how to avoid nugatory expenditure. His senior staffs and Minister have consistently ruled that these can be ignored – in fact, it is a disciplinary offence to refuse to ignore them. Fix that problem and waste will plummet while efficiency increases – which is the whole point of the report.

[Bag Man]

Back to first principles again. The defence industry is about jobs (that includes serving military) and not about delivering to TCP.

As a Civil Serpant once said to me, "delays are good - more jobs for longer".



Yours
Still a bit green

BM

[pr00ne]

Bagman,

Nonsense!

The defence industry is all about shareholder value. That's the only reason that these companies exist. They are some of the most voracious job cutters of ANY industry.

Drayson has said that he will implement the report in full with the exception of the suggestion to examine total privatisation of the function.

[tucumseh]

Bag Man is certainly right about defence not being about delivering to TCP. As I’ve said, dare do that and you can kiss your career goodbye – a simple fact confirmed by our old Director of Personnel Resources and Development, XD and CDP. As my Director once said to me, delivering a programme to TCP was “an embarrassment to the Department” (because it set an unrealistic benchmark for other programmes – the gold standard ones I mentioned earlier). I said my user would rather have the working kit now (especially as we’d launched production and commenced delivery, following successful trials), rather than the three year delay he had tried to impose upon me; to which he laughed and directed me to find a new job in a non-aircraft team. (Got that in writing, so confident was he that his bosses would support him. He was right).


As for jobs, the report confirms the DE&S planned reductions, which on the face of it seem quite substantial. But, one must temper this with the fact that when MoD(PE) split into DPA and DLO, and “support” projects were transferred from DPA to DLO, very often DLO employed whole teams to do what the DPA regarded as a minor task. In my case, I transferred four hours work per week, and was given an extra few projects to make up my time. DLO manned the job (and the IPT still does) with 4 full time posts, plus consultants. A little bit of levelling and rationalisation required there.





Bags - not all are "serpents", and some are still "civil". :ok:

[Squirrel 41]

Simple then! Tuc for Head of DE&S, N-a-B for Head of Requirements centrally.

Points? Questions?

Good!

S41

[elderlypart-timer]

Tuc seems to understand a lot of the background to this - in particular the issues around staffing and the old LTC procedures.

One thing I think could be very positive is the proposal to actually publish the 10 yr equipment plan and then give it some sort of legal status. In my experience the willingness of everyone involved to dick about with programmes has been highly destructive. For instance one of the easiest ways to cut spending when the Treasury gets on the phone demanding cutst is to push something to the right. A published equipment programme makes that much more difficult to do. Another problem has been the willingness of the services to try and sacrifice someone else's programme in order to keep their pet project alive - again much harder to do with a published plan.

[Mr C Hinecap]

tuc is dead right with the recent history there. I'd add that the seperate cultures of DPA / DLO were badly clashed together. To many (of the DLO world), the outcome of the project is the project itself - rather than a bit of robust kit that men and women use on ops. Too many (IMHO) get swept up in the process and never focus on support to ops and supporting now. I also see some of the CS moving posts ahead of project delivery - thus absolving themselves of any real responsibility for their actions.

[tucumseh]

Simple then! Tuc for Head of DE&S

I know you mean well but I wouldn't last 5 minutes.

The first thing I'd do is enforce the legal obligation to ensure "requirements" that do not pass Requirement Scrutiny are not approved. At a stroke this would force most of DE&S and DEC to acquire competencies the rules say they should have, but have not been imposed for 17 years (Dec 92), when DGSM (RAF) ruled it a sackable offence to refuse to make a false declaration that a requirement passed scrutiny, when it did not. (i.e. commit fraud). A ruling subsequently upheld by PE, DPA, DLO and a raft of Ministers although, to be fair, they removed the sacking bit. (First offence - formal verbal warning and told to find another job).

As this would directly oppose Ainsworth, as well as senior MoD staffs, I'd be sacked on the spot.

But I'm sure the NAO would be interested and the tribunal entertaining.

[Not_a_boffin]

S41 - thanks for the recommendation - but tours in town don't appeal - been there and done that!

Whoever does end up as DCDS CAP needs to be able to fight off the idea that requirements can all be measured and traded off against each other scientifically across capability areas. Great idea in theory, but actually generates an entire self-serving process dedicated to fiddling with scenarios, high and low level OA and requirementeering for requirementeerings sake. Don't get me wrong - the idea of Joint capabilities is a given, we're not in the position that replacing service-led capabilities with more of the same is inherently justifiable. However, any procurement process has to be able to move in a timely manner, not just sit endlessly waiting for the next iteration of OA.

Speaking of which, I see one of my favourite horror stories\- the Fleet tanker, is back in the contracts bulletin - less than a year after being shunted three years right. Straight into a brand-new contracting exercise after the reprofiling in PR09 led to cancelling a tender process when the IPT had the jester's feet, which allegedly resulted in a fairly high-level snotty gram from the Korean MoD with two RoK firms bidding.

Still a ludicrous £800M for six ships, when the commercial equivalent can be had for $70M each. Would still need a bespoke design for the flightdeck hangar and accommodation, but come on, got to be double what we should be paying!