QQ Civil Servants "acted dishonorably"

[Squirrel 41]

At least according to the Guardian:

http://www.guardian.co.uk/politics/2...tehall.defence

Sounds like a plausible charge.... £130k suddenly becomes nearly £26m? Hmm....


S41

[tucumseh]

First, I agree with the thrust of the article. However, you'll probably find they didn't set out to conceal this - the MoD beancounters were wetting themselves over the thought of huge cuts in the Defence Budget and missed a minor bit of detail.

As usual, the press miss the big story for the sake of a headline. Ask any MoD project manager what the real concern at the time was and they'll say they suddenly had to start paying for QQ (and DSTL) services but didn't receive any compensatory lift in project funding - which meant CAPABILITY had to be sliced off the other end. This was compounded by having to pay double, as DSTL demanded payment for "shadowing" their QQ counterpart.

The figures quoted are nothing compared to the nett cut in the overall budget caused by this. That is the disgrace and it is disingenuous, yet typical, of the committee raise the issue many years after the event without telling the full story.

[ExGrunt]

The full report can be read here:

http://www.publications.parliament.u.../151/15102.htm

[GOLF_BRAVO_ZULU]

John Humphrys interviewed Sir John Chiseller at 0750A on the Today programme this morning. As ever, the QQ head shed came across as calm reasoned and totally believable in his argument that the people who made money were the ones that took risks that weren't acceptable for the MoD to do similar. He also made it clear that he is not a career Civil Servant but an entrepreneur seconded to make DERA "commercial". I read this as meaning, if you hire a blagger you expect to be blagged. He certainly wasn't repentant and, as a pretend Civil Servant, you could argue why should he be.

http://news.bbc.co.uk/today/hi/listen_again/default.stm

[Chox Away]

MoD responds to MP committee report

Minister for Defence Equipment and Support Baroness Taylor responds thus:

http://www.publictechnology.net/modu...icle&sid=16090

[effortless]

As usual, the press miss the big story for the sake of a headline. Ask any MoD project manager what the real concern at the time was and they'll say they suddenly had to start paying for QQ (and DSTL) services but didn't receive any compensatory lift in project funding - which meant CAPABILITY had to be sliced off the other end. This was compounded by having to pay double, as DSTL demanded payment for "shadowing" their QQ counterpart.

I must declare an interest though, my income dropped as a result of privatisation.

Maybe we were just incompetent mumble, mumble, mumble.

[Safeware]

GBZ,

I'd like a better understanding of the risks they were taking.

sw

[tucumseh]

Safeware

I'd like a better understanding of the risks they were taking.

Agreed. They were, and still are, guaranteed work. Potential, and perfectly viable, competitors are actively prevented/discouraged from bidding.

Think about this. As DERA (or QQ), they are tasked to conduct research. They issue a report which forms the basis of an MoD decision to proceed to Development. MoD goes through the motions and issues an Invitation to Tender. Other bidders ask for the report to better inform their bids and establish parity with what is now QQ. MoD refuses. QQ use their knowledge of the report and what recommendations the MoD have accepted and, vitally, rejected. That is, not only do they have sole access to almost all the MoD’s corporate knowledge archive, but they know where to focus their bid because they know what MoD rejected. Other bidders have to spread their resources and their bid is less focussed. The bid marking is almost a formality, perhaps helped by the fact DSTL are employed to do the marking, and know which side their bread is buttered on (and who makes the tea as they often share the same office with their QQ counterpart). And we all know why companies don't complain.



All this, and more, would have been known by these multi-millionaires. They have some superb people and expertise (few of whom benefited financially), but it’s not a level playing field and there is no point pretending it is. I just can’t see the risk.

[Safeware]

tuc,

Agreed, and the same applies in looking at RTS recommendations for further work - what can QQ progress as a proposal based on the shortfalls / potential improvements noted.

But what I meant was the risks that the 10 were taking in investing their money - next to none, all they had to do was their job, just like everybody else in QQ at the time. Ordinary individuals were not blessed with such a windfall and, in terms of their own money invested have struggled to see any significant return on the £2 per share cost.

sw

[Question_Answer]

In my view, this discussion and tucs comments in particular splits the debate into several threads:
1) The 10 fat-cats knew they were onto a winner but no one in MOD prevented this. There are fat cats in all walks of life. We all get annoyed with those who use/run public money/services/taxes, e.g. Adam Crozier's post office bonus or celebrities/heads in the BBC holidaying on my (no choice to opt out) TV License (tax) as two examples.
2) MOD always had to pay DERA for services, so I dont think cuts to front line capability can be directly attributable to the formation of QQ. Noted there appears to have been many cases of having to pay DSTL to "shadow". This then raises the question of what the purpose of DSTL exists for, something the Defence Comittee Examined in 2006/07 IIRC.
3) QQ doesnt make the big stuff (tanks, planes, ships) so any privileged position in conducting/knowing the research hasnt (and likely will not) land any contracts for them away from the likes of BAES, RR, Thales, GKN etc..
4) Research is now competed and QQ doesnt win it all.
5) There are as many influential people in DSTL who dont like QQ as there are those who share coffee and cakes!
6) The real reason front line capability gets compromised is because of the shoddy conduct (late and overbudget) of the big programmes (read the NAO reports). There are many reasons for this, ranging from "simple" incompetence through to "jobs for the boys" or votes, pipe-dreams for career progression, inter-service rivalries and many other factors that everyone in defence (govt, mil, servant, suppliers, contractors) have some shared blame.

[tucumseh]

QA

I don’t think we differ too much, but to clarify;

2) MOD always had to pay DERA for services, so I dont think cuts to front line capability can be directly attributable to the formation of QQ.

Agreed DRA/DERA had to be paid for in the past but my comment was a project office viewpoint. They were paid for centrally, so the Customer (RAF/RN/Army) didn’t have to make specific LTC/EP provision for their services. The same applied to workshops who would, for example, modify aircraft or equipment; and to many other core services. The funding you had was for, say, Development and Production. Then, the central funding stopped and costs had to be attributed to the individual project. Fine, from an accounting viewpoint, but the point I made was that the central funds were (a) no longer sufficient to pay for DERA/QQ etc (as they were out to make a profit and IPTs suddenly required extra commercial resource and time to negotiate contracts, as opposed to simple tasking) and (b) the central funds were not distributed anyway – as far as I can see they were offered up as a “saving”. Projects had to fund very expensive work from existing funds. That can only result in reduced capability as something has to give; and is effectively a cut in the Defence Budget. Clearly, in time, this settled down as new projects knew to bid for what used to be termed intramural costs, but it only “settled down” within the constraints of a Defence Budget which has reducing in real terms for many years. (Oh, and we haven’t discussed the sell-off of estates; a one-off boost for the QQ books at a convenient time!).

3) QQ doesnt make the big stuff (tanks, planes, ships) so any privileged position in conducting/knowing the research hasnt (and likely will not) land any contracts for them away from the likes of BAES, RR, Thales, GKN etc..

To date, QQ’s agreement with MoD has precluded them from manufacturing (in simple terms, they can make prototypes but not production quantities, although it seems this is shortly to change). They still retain the knowledge I spoke of and are effectively a directed sub-contractor. Ask small/medium size companies. The word from MoD is very clear – if QQ don’t actually bid, whoever they choose to partner with stands the best chance. In many such cases, QQ are actually determining who wins in advance.

6) The real reason front line capability gets compromised is because of the shoddy conduct (late and overbudget) of the big programmes (read the NAO reports). There are many reasons for this, ranging from "simple" incompetence through to "jobs for the boys" or votes, pipe-dreams for career progression, inter-service rivalries and many other factors that everyone in defence (govt, mil, servant, suppliers, contractors) have some shared blame.

Agreed, to which I’d add the hidden costs of corrective action, the most obvious recent example being the projects created or rescheduled to bale BOWMAN out. Sorry, I bang on about that particular disaster, but there really is something fishy going on when, on one hand, BOWMAN is touted as the dogs ******** yet on the other the NAO quietly buries a one-liner in their report saying “another project” is to replace large parts of it. As you say, jobs for the boys and career progression (and career protection as progression has already taken place). If corrective action is needed and money has been approved, ask why the project responsible is not told to fix it.


Again, I have nothing but the highest regard for most QQ people I have met, in particular Boscombe Down. But the disquiet you mention at DSTL is, I think, shared within QQ. There was another raft of redundancies earlier this year and, as usual, it was those at the coal face who bore the brunt. When a project manager sees that happening, he automatically reschedules as he knows the reaction time will be longer, delaying introduction of capability. That is the practical effect of privatisation.


Regards

[Two_Squirrels]

What I would like to know is why 10 people made an average of over 10 million pounds each, based on an investment of about 100000 pounds each (which is roughly, allegedly, what their bonus wasfor the year they invested. Not much of a risk in my opinion). In my opinion, what was immoral is the fact that all the QQ employees have lost out in their pension fund to the tune of £90 Million. It seems a bit of a coincidence that this is about the same amount of money as the top neds made. The taxpayer will continue to receieve the benfits of privatisation of QQ as time goes on. The QQ employees will continue to lose out as time goes on.

[GOLF_BRAVO_ZULU]

Safeware. I too would be interested to know what the risks were. I simply relayed the gist of what the man said.

Casting my mind back to the last Century, my Group used a Service Level Agreement with DRA/DERA for the re-lifing of oil, grease, paints, adhesives, sealants and rubber items. As an Agency, they made charges for the service but no money crossed budgets. The plan seemed to be that, after achieving full Agency status (or privatisation), the Budget covering those charges would be disaggregated to the User, to then include them in LTC/STP bids. If DERA charged, say £1,000 (a silly sum only used as an example) an hour for the work, it didn't matter as the money would be passed across to cover it. It was also an internal MoD accounting process that drained nothing from the Defence Budget other than the true cost. Now, if the costs were artificially inflated, it wouldn't matter; so long as DERA or Quinyquick remained part of the MoD. Once outside (or 80% of it) the MoD, though, that inflated cost would be very lucrative and protected by the precedent of already being an agreed charge. There were no acceptable Contractors we could use for that function anyway. Early this Century, I moved on to other things so don't know if the funds were ever disaggregated. None of it sounded very risky.

I still find it interesting that none of the profit making members of the management Board were career Civil Servants.