Just a few comments;
Fox (actually, Bernard Gray, judging by some of the language);
He will say: “For years successive Defence Secretaries have failed to get a grip on the equipment programme and failed to hold the department and industry to account for delays and poor cost-estimation.”
He will criticise what he calls a “conspiracy of optimism based on poor cost-estimation, unrealistic timescales” at the MoD and in industry.
“These practices in the MOD would simply not be tolerated in the private sector, and they will no longer be tolerated in the MoD.”
Here are three ideas. 1. Dig out the mandated “Permanent LTC Instructions”, unused by most since 1987 but never rescinded. (My dog-eared copy never left my side while at work). 2. Recruit people junior enough to implement them. (As no-one in DE&S is). 3. Implement them. Doesn’t solve every problem, but it avoids most of the recurring ones you come across. That is, it is the first step in Risk Management – avoid the avoidable, manage the unavoidable. And future Project Officers, Project Managers and Programme Managers will learn the basics.
Geehovah
That said, fixed price contracts do not work.
Old saying; Firm is Fixed, Fixed is variable. Fixed Price and Cost Plus contracts still have their place; the trick is having the experience and competence to know which works in any given situation. MoD no longer requires those attributes, and hasn’t since about 1990.
To solve this some form of closely monitored fixed price plus system is needed with a contingency built in to the contract funding.
Remember “Contract Branch Tolerance”? Allowed a 20% variation in price before resubmission was required. That sounds a lot, but typically 17.5% would be taken up because OR (DEC) forgot to include VAT! Something that didn’t happen when Scrutiny was conducted properly (as above).
Ah, Requirement Scrutiny, mandated by PUS (the Chief Accounting officer) and designed to ensure that a proposed spend is both proper and fair and reasonable based on the actual requirement; not necessarily what is in the proposal/SRD/submission/business case etc. Not conducted properly since 1992, when it was deemed an offence to do so. Upheld by CDP in 1998 and successive Ministers every year since. Rescind that one and take a huge step forward in getting the requirement and cost right.
In my experience that was things like operational testing so the "short cuts" remain undetected for longer and the effectiveness (and safety) suffers.
And it is that true statement that illustrates the link to Haddon-Cave (which everyone has heard of) and the previous, much more detailed and damning reports which make H-C look like a 5 year old having a strop (and which MoD don’t want you to know about).