UK Armed Forces are superb, but why is procurement so bad?

[airborne_artist]

The Nimrod thread, and others highlight the issue. The UK has some really very good guys, who are superb on the ocean/ground/in the air. See Falklands, Southern Iraq, Helmand, etc.

Why then is procurement such an impossible task? What ever it is, MR4, Typhoon, FRES etc. are all horribly late, horribly over budget and diverting management time and badly needed cash from the task in hand. In the Cold War this was bad, but almost acceptable, as not many shots were being fired, but it's come into sharp focus since we tried fighting on two fronts without the kit that should have been delivered by now.

I appreciate it's not going to get solved overnight by throwing money or brains at the problem, but will we ever learn how to get it right? Where are the mistakes being made, and why do we keep making them?

[timex]

It seems every thing we buy in the UK "has" to built and or designed here, we never seem to put anything up to tender, so it's take it or leave it. We also protect our home grown industries...

We have had some great kit but usually only after the Mil has done the R&D in the field.


Shaun

[ChristopherRobin]

Simple answer: civil servants (by far the majority of people in Defence Procurement) and their military colleagues in procurement don't/can't run their projects like a business.

Look at any government procurement project, not just military - best example? NHS IT project, already £10 billion over budget!!! A third of the defence budget on one project that doesn't work and isn't needed according to practically all health experts.

Procurement employees: you can't sack them and you can't give them life-changing bonuses. It's a gravy train. Translate that into any business and it would fold immediately. Yet Defence procurement is a business! But it's a complex inter-related business with huge budgets and its foundations resting on sand - its people.

I have met many procurement individuals that were/are superb, but the civil service culture is not coinducive to organisational success. Defence procurement versus real business is like a really fat lamb judged 'slow' at school wandering down a field full of starving lions thinking 'what to do today?'

How to fix it? Give IPT leaders power of immediate sacking and discretion to use their operations budget for bonuses. And force the EC crowd at main building to simplify their plans to build the battlestar galactica oh, and for once actually talk to the people just across the corridor that are making the radio kit for it.

Right. Any more problems you need solving A_A?

[BluntedAtBirth]

Pendolino trains on the West Coat Mainline, A380, Wembly Stadium, Stock Exchange computer system, we aren't alone...

Some advanced projects just are expensive and time consuming, perhaps we are just continuously optomistic on price and time? On the other hand, so-called SMART procurement is brilliant at managing 'bits of paper' through gates, which is a shame as none of the troops at the sharp end need more paper.

[tucumseh]

Many projects are over “budget” but not over the fair and reasonable “cost”. Matching cost with budget is a discipline that was ditched, formally, in the early 90s. The last gallant attempt I know of was LTC96, and then only by the last man standing who knew what to do. Exacerbated in 1996 by the then CDP who decided he wanted administrators running procurement. (The MoD can never recover from this). The current Min(DP) (forget new title, Min DE&S or something) called it unnecessary detail. Really?

I’ve just posted something similar on the Nimrod thread so I’ll just repeat one thing – procurement and acquisition are two different things.

Other valid issues have been noted. I don’t agree with the general slagging of civil servants – there are good and bad everywhere. But the point about “hiring and firing” has been made many times over many decades – not just by IPTs, which only date from 1989, but across the CS. You’ll find that those CS you think highly of actually want this. They are sick to the teeth of getting paid the same, or less, than those who are permitted to sit on their *** doing nothing all day. And when they complain, they are told to wind it in and do both jobs (or more). This is not just me moaning – CDP and Ministers have placed it in writing, many times and in response to formal complaints, that this is acceptable. Don’t blame the likes of me – sack them.

[Top Right]

CR,

Couldn't agree with you more.

As for the radio kit angle, in the pre-SMART days we had the ORs Air, Land and Sea, with a Joint tinpot bit called OR(ICS) for the wiggly stuff. But OR(ICS) had to fight for purple money on an equal share basis with the 3 Services' priorities. So despite them each calling for the Joint "lead", when it came to putting their hands in their pockets they usually decided that their single Service projects were more important to them - not surprising at all.

The McKinsey SMART era established the new pillars with CM(IS) having an equal seat at the table, but it's still a vertical pillar and you are forever correct in that it still needs the other desks to wander across to the information integrators (wiggly chaps). This continues to improve but there is a particular challenge to the perfect world: IPTs have to buy a package of capability. They have to have boundaries that are easily defined so the IPTLs can manage or delegate the risks accordingly, as well as identifying meaningful costings. In an era where many people talk of NEC, at what point can the pervasiveness of NEC be translated into a discrete package of capability for an IPTL to sign-up to in managing the risk to his programme, and showing all the related costs?

Now if only we could move all the information/gluey bits out of DEC and put them somewhere else (eg DCSA or the Integration Authority) where technology could be invested in across the piece at the same time, eg upgrades by network and not by project, maybe we could begin to deliver a network approach to procurement rather than the current independent packages.

[TheSmiter]

Occasionally, a thread comes along which, when discussing a failing military, hits the nail square on the head.

So much of our limited budget goes on P & A and when there are so many 'failures', 'cock-ups' call them what you will , costing billions, thats the headline the taxpayer notices. And whats more, those are the numbers that my bete noire ( Gordon Brown ) uses to demonstrate how much money the military wastes - hence the front line are left picking up the crumbs and the pieces of fallen warriors.

I don't know what the answer is chaps, there are far better qualified Procurement professionals out there (step forward tucumseh), but surely there must be a better way of doing business?

DE&S have just reorganised themselves with a new name and lovely HQ, have they thought of a root and branch review of their core function?

[Rheinstorff]

Too Many Reasons

There are myriad reasons why procurement is so bad, and the people who are involved are part of it. However, some are very good. Notwithstanding, procurement involves lots of money and there are frequently political dimensions to procurement decisions, which adds time and complexity to a time-consuming and complex business. This is true the world over. There is merit in buying British with all that this means for investment in R&D, even if that creates problems. This is especially true if we want to remain at the technologically advanced end of the warfighting capability scale. Practically the only other country we can buy this sort of equipment from , the US, has a capricious mechanism for determining whether you can actually have it or not, even if you have invested big money and technology transfer in it.

Also, buying Commercial Off The Shelf (COTS) solutions means that you run the risk of having what everyone else has (or worse), which hardly gives you an advantage. When you want the best kit, you often have to invest in unproven technology. This is risky and inevitably leads to time and cost overruns; there are a lot of unknowns. Painful as this is, and it makes great ill-informed headlines in the newspapers that are keen to cane whatever Govt is in power, we do tend to get decent kit in the end.

I'm not in procuremenmt, but I appreciate there's more too it than the 2D or hysterical views of procurement would have you believe.

[GOLF_BRAVO_ZULU]

tucumseh; I've also read your Post on the Nim Thread and I can't disagree with much that you say. Something you haven't given much coverage to, though, is Government accounting regulations. They have the stranglehold on everything we do. This is not an MoD invention as it applies to all Departments/Ministries and is presided over by the Treasury. Think about why PFI always looks so attractive; or at least on face value. The beanies involved in a Project (that title itself drives much of the mindset) do not have an easy time of it and poke their beaks in and stamp their feet because the resident spanner stranglers often demonstrate a childlike grasp of commercial and financial considerations.

You are also right that people don't always talk to the right people and, even worse, often talk to the wrong people. This usually shows up when in-service support is eventually considered. Either the IPT doesn't have a loggie attached to it or has ones that have a very narrow experience. It is interesting, incidentally, that the means of providing that wider experience has been dismantled over the last 20 years. Couple this with the involvement of Service team members who stay for around 2 years then push off either outside or to another posting and you get additional "disconnects" (12 months to grasp what is needed and how it all works, 6 months being productive and 6 months winding down to whatever's next). I could provide a number of examples but none are in the aviation field.

It seems a paradox that the, arguably, obsessive concern with safeguarding Public money and principles of propriety is probably the greatest waster and fragmenter of available funds.

[Not_a_boffin]

GBZ - could not agree more. Quite often, the logjams in acquisition can be attributed to the "process", whereby what seems like every single requirement must be justified to the "scrutineers" on effectiveness / safety grounds - often either impossible to document at the relevant stage or requiring vast amounts of effort to do so. The theory behind it (NES & Defstan can drive equipment costs unneccessarily) has some basis, but appication needs to be tempered by common sense and experience of the support axis.

[Wader2]

The project teams consist of civil servants and uniformed personnel. The latter, in theory, lend operational focus or service expertise. The former provide the business acumen (or should) and project continuity.

The manufacturer, OTOH, will form a contract team that will run the project from start to finish drawing in new blood at the bottom ad the old hands retire at the top. Huntings was known for 'letting go' entire project teams when a weapons system went out of service.

Is there a case for posting service personnel to a team for the life of a projector at least until completion of a definite phase of a project rather than arbitrary 2, 2 1/2, or even 5 years?

I know that is not an entire solution as there is often no censure for a Charlie Uniform. One Sqn Ldr, known as Telephone S**** because he never committed to paper, assured an organisation that there were no changes in a particular area. They went ahead and printed new FRCs based on his word. When we checked we found a number of significant changes that meant there was an error on every single page of the FRC. Small and insignificant as it may be the reprint still had to be paid for. Now if Charlie Uniforms like that could be translated into personal liability!

OTOH that may lead to risk aversion. It really is tres difficile.

[dun-testin]

Procurement Issues

Oh dear, in the time its taken me to write this others have probably answered better. Still, I’ll post it anyway for solidarity if nothing else.

If you want to make things better you have to understand the problems. In this case that means getting beyond saying the root cause is ‘civil servants are all rubbish’. I’ve met some who indeed were rubbish, I’ve met plenty who were good. If you want a starter then consider:

1. Ambition nearly always exceeding overall funding. If you only have the funds for a Trabant and require a Ferrari then your project will either fail, or go over budget, or both. This is exacerbated by cultural reluctance to say no to those in higher authority when faced with flawed or overambitious ideas.

2. Even when the overall funding amount is sensible its nearly always delivered to the project by drip feed. The overall cost of projects quoted in the news never conveys how that money was spent, and when. It may take 6 months of man effort to complete an avionics package design. This will involve many different specialisations and cost a certain amount of money. If MoD can only deliver part of the funding in that year to the contractor then only part of the work will get done then. The timescale will have to expand out until the next drip of funding is available plus however long it takes to do the outstanding work. Meanwhile, the contractor has to be retained on contract to keep the design team together. Thus the job will cost more overall and take longer than if the funding was simply available when needed.

3. Regulatory requirements, and standards, written for another time when we weren’t a poverty outfit. When procuring military equipment staff must ensure that they comply with the regulatory requirements. That’s the duty of care. In writing these requirements the UK generally signs up for the absolute gold standard of everything, often well beyond what is easily available off the shelf. When IPT staff try to apply these requirements they inflate cost, often to the incredulity of those looking in from outside. At the moment the pressure is all on IPT staff to say things meet requirements which they do not, or ignore the requirements. ‘Be pragmatic’ has become a euphemism for ‘ignore that regulatory requirement, its inconvenient’. If as a nation we cannot stomach the cost of the gold standard any longer then we should honestly and publicly lower the regulatory requirements by amending the regulations. At the moment the system is rewarding those who subvert its requirements and punishing those who attempt to obey them honestly. This encourages the honest to leave and breeds a culture counter to safety.

4. Procurement staff are now often faced up against contractor counterparts with more experience. The wrongheaded decision that DPA staff must be generalists has led to this. It is necessary to have technical specialists in IPTs who are as good as their industry counterparts. This will only happen when people are encouraged to stay put and develop in their specialisation, and if there is technical career progression for them. There is little point in creating a building full of people with a wide experience of doing everything badly.

This was compounded by the privatisation of DERA. A DPA full of project managers makes a little more sense if the technical expertise resides elsewhere in MoD at the end of a phone line. When this help can only be obtained by contract with a private company, which may have to be competed, then it makes a lot less sense.

Over the last decade and a half the procurement side of MoD has quite effectively been lobotomised.

5. Misuse of Military Staff in procurement. Military input is fundamental to developing the requirements for kit and in evaluating its suitability. However, they should not be posted in to temporarily fill positions they have received no training for purely because that’s a cheaper way to man up an IPT. This also applies equally to IPTLs.

[BattlerBritain]

Is there a case for posting service personnel to a team for the life of a projector at least until completion of a definite phase of a project rather than arbitrary 2, 2 1/2, or even 5 years?

The Navy did that for the Sea King AEW Mk7 guys I worked with, so it shouldn't be beyond the wit of their Airships to do the same in their house.

Hang on - I said 'wit' and 'Airships' in the same sentence. Forget that .

Having worked as both a Civil Servant (on Challenger 2) and as a Defecne Contractor (on numerous air related contracts) I've come across quite a few of the pitfalls on Defence Procurement.

It seems that the bigger the Contracts get the wider off the mark the costs get to budgets and the longer the delays.

And the bigger the Contract the more people you have working on it, so in my opinion Defence Procurement problems are as a result of poor people management, whether the people be Civil Servants, Uniformed or money-grabbing-subbies.

If you have fewer people the 'Chinese-Whispers' effect is reduced with the best contracts I've worked on having direct and continuous contact between Uniform and the subby (literally the guy producing the kit).

Uniformed branch are meant to be the best people managers around. Maybe everybody (Uniformed, CS and Subbies) need to get better at people management?

[Double Zero]

Procurement

Having been on various BAe development projects, I suggest you look right there;

as long as the boxes were ticked, no-one in management positions gave the slightest thought as to ' could the kit do it's stuff in real war situations' let alone suggest b****g obvious simple improvements.

Even test pilots grew used to this, and eventually kept their heads down & shut up ( I'm talking of the late 80's - 90's ) - it seemed they relied on the OEU to highlight shortcomings, which of course was too late & without any financial clout.

BAe management simply couldn't care less - A, they were clueless about anything but bean counting, B, they would be in their next short term position long before any problems cropped up.

S.E.P; someone elses' problem...

[Beagle-eye]

This is an interesting thread. After many years wearing green I now own my own company providing services to the MoD, DoD and other government organisations.

I don’t have an answer but my observation is that the procurement process, itself, contributes to the muddle. Government contracts MUST be competed and, despite all that may be said in the Tender document project price is a BIG issue.

Putting together a fixed competitive price is extremely difficult on a complex multi-year project. Companies often go in at rock bottom prices and wildly optimistic time frames in order to win the business. Having done so they will take every opportunity to capitalise on the slightest change in scope or design. This leads to escalating costs and the in service date constantly moving to the right.

There are many other contributing factors. Defence projects are, invariably complex. Both the development time and the expected service life tend to be measured in decades. The world, and operational requirements, change on an almost weekly basis.

[MarkD]

I read about a overpass replacement contract in California recently (NYTimes I think) where the bid was only 800k but was deliberately bid low because the company, a well known operator, was able to make up the difference in bonus payments (200k/day to max of 5m - which he achieved).

Obviously you have to watch things like quality in those situations - but this guy had his work crew on site 15 min before contracts were signed to ensure shovels were in the ground at the first possible second.

[tucumseh]

Golf Bravo Zulu

Thank you. If I may reply;



“Think about why PFI always looks so attractive; or at least on face value”.

The example I always use – Apache training. The same Directorate had two simultaneous projects requiring trainers/simulators. The question of PFI was raised with both. One filled in the requisite form and in 5 minutes flat had a waiver – no PFI because (a) ISD couldn’t be met and (b) there was no overseas sales potential, so UK would bear the whole cost. ISD met, under cost and ahead of time. Apache, the simpler of the two, on the other hand ……. If the Gods want to see how it’s done, stop slagging unsuccessful projects and ask why the majority, many of them far more complex than those which fail, succeed. They never do. Too embarrassing.


“the resident spanner stranglers often demonstrate a childlike grasp of commercial and financial considerations”.

If you know the CS grades, C2 is generally the lowest project manager grade. A project manager MUST be able to carry out all the roles in his/her team, including finance and commercial. This includes Requirements Management, ILS, QA, Risk, ITEA, Engineering Authority, etc etc. (CDP ruling, and taught to me long ago). Interestingly, this does not apply to other non-engineering disciplines, like finance, commercial, personnel etc. Which is discrimination – another story. It follows that, if a PM does not have these competencies (which you learn and must demonstrate in the 5 grades below C2, before being promoted into procurement) then, by definition, he/she should not be in the post. But, (a) the recruitment ground for PMs no longer exists in the MoD, as they are all in agencies now, earning far more at the lower grade than any PM does and (b) C2 is now a direct entrant grade, so they do not serve in the 5 previous grades, nor are they required to retrospectively attain the competencies. In practice, the rule is only applied to non-direct entrants – the latter are protected and given whatever resources they need (in my experience). I’ve never been a commercial officer, but I’ve let hundreds of contracts. (Conventional teaching says this can’t be done, but they’re wrong. I once let 39 in one day, by faxed A5 memo. The aircraft flew on time).


”This usually shows up when in-service support is eventually considered. Either the IPT doesn't have a loggie attached to it or has ones that have a very narrow experience”.

See above. The in service phase accounts for around 80% of whole life costs. An IPT shouldn’t have “a loggie attached to it”. It should be chock full of technical PMs who have been ILSMs two grades earlier, on the same technology/platforms.


“It is interesting, incidentally, that the means of providing that wider experience has been dismantled over the last 20 years. Couple this with the involvement of Service team members who stay for around 2 years then push off either outside or to another posting and you get additional "disconnects" (12 months to grasp what is needed and how it all works, 6 months being productive and 6 months winding down to whatever's next). I could provide a number of examples but none are in the aviation field”.

Correct. See above. I can provide numerous examples, in Air, Land and Sea. It’s very nearly a case of name an aircraft or equipment.


”It seems a paradox that the, arguably, obsessive concern with safeguarding Public money and principles of propriety is probably the greatest waster and fragmenter of available funds”.

Correct. NHS is close though. The rules to avoid waste are mandated. Successive PE, DPA, DLO, DE&S regimes, and Ministers, have ruled that they can be ignored. Their only defence is that they haven’t a clue so - and I may have mentioned this before – they should be sacked in favour of people with a proven track record of delivering to time, cost and performance.


From an old annual performance review (about 1996 I think). (Your) ability to deliver to time, cost and performance is an embarrassment to the Department. You are tainted by your experience. I asked him to repeat it in front of my team. He did. Says it all really.

[120class]

One of the key problems with UK procurement is the way in which an IPTL's performance is measured. They are held to task against time and budget not delivery of capability. This leads to equipment being delivered despite the recommendations of Boscombe Down and the OEU's result is more time and money is wasted attempting to fix what shouldn't have been procured in the first place.

An old adage ' you can have it cheaply, quickly or capable....just pick any two'

[Jimmy Macintosh]

From my experience there are a lot of factors.

Initially it's the people who put the bid together, they cut chunks off in order to be the most competitive bidder, normally at the expense of a realistic quote. My last job I was asked to give a realistic quote for time to do a job and asked to quote it with no leeway, so cut it to the bone. This I did and I found out when the quote went in the powers that be had shaved a further 15% off my times, because it extended the project beyond what looked reasonable. It didn't matter that I had already been incredibly optimistic. As some say, it's easier to ask forgiveness than to get permission. When they get to the point where everything is on the critical path they start pushing items onto tranche 2, say they'll qualify it by field testing removing items that are considered non essential.

After that it's the high levels of beaucracy that have appeared in the last couple of decades. Initially when executing a test plan, or getting a stress report signed off there were three signatures required, base engineer, check engineer then approval from a lead and occaisionally a forth signature, a program manager. Anything needing changing or approval meant sending the document to each of the signatories for their acknowledgement. The last BAE project I worked on there were anywhere between 14 - 20 signatures required for each document, being a multinational project meant that approval was required from three different continents!!! So what in the old days took a day to get reapproval actually took weeks.

Then of course it's attitude of the workers, they see a lot of projects a means to job security and a constant flow of overtime. Why get a job finished and risk being out of overtime or worse still out of work when you can just extend each task a week or so after all the project is a couple of years long, what does a weeks difference matter? After all the deadlines are installed by someone without a definitive reason (Not like there is imminent war or anything)

These are just a few that I've noticed and each one is increasingly frustrating to deal with.

[Exrigger]

Jimmy Macintosh:

Then of course it's attitude of the workers, they see a lot of projects a means to job security and a constant flow of overtime. Why get a job finished and risk being out of overtime or worse still out of work when you can just extend each task a week or so after all the project is a couple of years long, what does a weeks difference matter?

I have never known the 'workers' delay a project to keep them in work or eak out the last drop of overtime, neither have I seen management do this. As has been discussed in numerous threads on this site and others, the main cause for delays is the MOD/Government bean counters who along with the forces keep moving the goal posts towards the end of projects to allow them to rob Peter to pay Paul. Additionally if said company did delay projects I can assure you it would cost them a dam site more than it would cost them to delay and give the 'workers' extra overtime payments. Before anyone asks, no I was not one of those workers or their managers, but I do know them.