GoCo NoGo?

[JFZ90]

Final nails in the coffin, or could Bernie still swing it for Bechtel?

Is defence procurement privatisation dead? | Westminster blog

[Just This Once...]

Presumably Bechtel will gain sole access to the magic tree that can provide and sustain suitably qualified and experienced personnel for the long term.

[500N]

I met some people at a show in Las Vegas who were from the UK
and procured Arms and related items for the UK Military.

He was given a tender to supply some gear. He read it, gave it back
to them with a note saying it was not worth it commercially.

They were stunned.

[JFZ90]

JTO

Some familiar names.....

Exclusive: Conflict row as MoD top brass join contractors - Business News - Business - The Independent

[downsizer]

I wonder what chance DES have with their bid?

[Squirrel 41]

Until someone can seriously explain how we can achieve actual risk transfer to the contractor, then GoCo seems a dead duck. I just can't see how Bechtel (or anyone else) can actually write the blank cheque that would result if they screwed up.

[GOLF_BRAVO_ZULU]

The message is that "Civil" is bad and commercial is good. It's not until the experiment has failed will anyone take notice. It's only a commercial adventure though; not as as if it could be our national interest and security at risk.

The important thing is that yer man Gray gets the money he was hired for.

Everyone I know who's still in DES hates each day that goes by. They are depressed by seeing things that probably won't work being pushed through and ideals of service they've held dear being dismantled.

Once the great experiment is in place, though, all the knowledge, experience and training will have been lost to put it back together should it fail. Ah, bugger it; it's only money.

[Roland Pulfrew]

It's not until the experiment has failed will anyone take notice. It's only a commercial adventure though; not as as if it could be our national interest and security at risk.

And its not like there isn't a rapidly growing pool of evidence that there are just some things that should be done by the Govt and some things that are better placed in the commercial world. It just so happens that in Defence it should ALL be done by government staff.

Olympics security fiasco; criminal e-tagging fiasco; RAF EFT contract; PAYD etc etc

[Red Line Entry]

Statement from the SofS to Parliament yesterday:

On 10 June 2013, I published a White Paper on the strategy for reform of the acquisition and support of our Armed Forces' equipment. The strategy plans to explore the potential for involvement of the private sector under a government-owned and contractor-operated (GOCO) model by means of a commercial competition which is underway, and to compare this option with an internal approach which would deliver an improved solution within the public sector (DE&S+). I want to update the House on progress of the commercial competition.

When the Invitation to Negotiate (ITN) was released on 25 July there were three prospective bidding consortia but this reduced to two shortly thereafter. While we believed that two bidders were sufficient for an effective competition, alongside the internal DE&S+ option, I asked that a review of the process be undertaken jointly between the Cabinet Office and the Ministry of Defence (MOD). This has recently been completed, and a copy of the report has been laid in the library of the House today.
The review concluded that a viable competition remained, albeit with some risk attached, but that any further reduction in the number of bidders should stimulate a formal reconsideration and decision on whether to proceed further with the GOCO option. Bids were required from the two commercial consortia in three phases and the second of those was due to be received on Friday 15 November. MOD has received a bid from one of the consortia but the second (Portfield, comprising CH2MHill, Serco and Atkins) has decided to withdraw from the competition. This is regrettable and the reduction in competitive tension will make it more challenging for the Department to conclude an acceptable deal with the remaining bidder, notwithstanding the competition from the DE&S+ bid, which will be received shortly.

The Department, with the Cabinet Office and HM Treasury, will now study the detailed proposal received from Materiel Acquisition Partners (led by Bechtel with PA and PwC in support), which is substantial at over 1,200 pages. In parallel, the DE&S+ team will continue to refine and enhance their proposition. This analysis will inform a decision on whether it is in the public interest to proceed with only a single commercial bidder and an internal option, or whether alternative approaches should be considered and a further statement will be made once this process is complete.

So in other words, 'Wait, out'

[dervish]

I'm told there's major confusion on all sides as Mr Gray first announced the model he wanted to use, then confused matters by using the term GOCO, which is a contradiction. The way its been put to me is the DE&S+ and Industry bids will be answering different questions. I'm pretty sure this was explained and predicted on another thread a couple of years ago.

[JFZ90]

there's some irony in the fact that bernie came in to tell everyone how to do procurement better - and his big procurement, feted as a grand competition, seems to have turned into a single source fiasco.

if a PM in abbey wood had got this far in a competition before realising there was no effective competition, you'd be asking questions about serious failures earlier in the procurement cycle, and counting the impact in terms of wasted effort and delay in providing a capability.

[500N]

I sometimes wonder if these orgs don't tie themselves up in so much paperwork
that they don't know Arthur from Martha. The Aussies have certainly done so
in the past.

[tucumseh]

Excellent point JFZ90.

To coin a phrase, this is a real No Turning Back moment for Defence procurement. MoD's expertise is almost gone, deliberately run down in the 90s by Walmsley. ("I don't want engineers running engineering projects"). If GOCO fails, where to then? It is a "Must Not Fail" moment and MoD's historical answer is to chuck money and staff at it, but make sure the cost is booked somewhere else. But neither guarantee success. Hard won practical experience and ignoring senior staffs is as near as you'll get to a guarantee in procurement. History tells us this is irrefutable fact. So, what is MoD's fallback position?

Is it co-incidence MoD is in the same position over Army cuts and the "Army Reserve"? The cuts are going ahead without any guarantee we'll get 30,000 strong reserve. What is the fallback plan? Full scale retreat? The same people are in charge of this asylum. By this, I mean politicians and those at the top in MoD. Savings, savings savings, but never mind the deliberate waste.

I've said before, but worth repeating, that Gray announced the model he was going to use on Radio 4 in December 2011. It was the very same model endorsed in June 2001 for a major Cat A Army project, and still successfully in place today. (Mr C Hinecap alluded to it on another thread the other day). It is based 100% on mandated (at the time) airworthiness regulations.

When questioned by an MP in January 2012, MoD then denied Gray even uttered the words, despite the full interview being available on Radio 4 archives for download. When this was pointed out by the MP, MoD refused to reply, and the initiative went quiet for over a year; in which time MoD announced more experience was being removed.

Therein lies the real story. Clearly, Gray was simply fed a line without understanding "his" proposal was extant policy in many domains anyway; so by definition scores of reputable contractors knew it inside out. When this was revealed by an MP, embarrassment ensued. But you'd expect the person who briefed Gray (or submitted the policy as his own new idea) to be asked to explain it. Crisis over, crack on, promote the briefer again. But no, they denied he even mentioned it. Why? The obvious answer is that the briefer didn't understand what he'd cribbed, and couldn't find anyone who did. Or didn't want to admit how low down the MoD hierarchy they'd have to go to find someone to brief a 3 Star. (One answer would be an Army Corporal at Warminster, but that's by the by).

I would like to hear the bidders' views. Did they appreciate, or were they told, that Gray's proposed model has already been implemented? I've never heard of half the companies involved, so I doubt it. Perhaps one has had the mandated Def Stan called up in one of his contracts, many years ago. None are involved in the current Army initiative. A wheel has been reinvented over the last 2-3 years, while DE&S has regressed in terms of ability to do its job. Gray is not on record as changing his mind over the model to be used. He just got someone to think up a new name (GOCO), which took a year. I'd also like to know what the exam question to bidders was, to see if he quietly changed tack, while denying his original tack. Entirely possible.

In short, this recent announcement is no surprise.

[JFZ90]

Meanwhile, the French look on with bemusement.

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Reading Hansard, it seems there is still a strong bias towards GoCo from SofS. He described that, despite facing what should be a single source situation of significant concern, the "bid we have on the table is substantial and from a consortium of world-class private sector businesses". Sounds a bit like 'sexing it up', no?

[High_lander]

In light of all things Monty Python- knew economic magazines could be funny...

I've been long of the belief that GOCO was dead from the start. I moved with my PT when it was DLO and merged with the All Mighty that was the DPA bit.

There seems to be an air at ABW that so long as it's procured, that's all that matters; the support or the dirty "in service" bit is lost on many at ABW. At least that's what seems to be happening in my PT. GOCO was pushed on us as the saviour from the MOD's commercial cock ups and DE&S+ was the fall back plan.

I think GOCO was never going to happen because it was never, ever, going to be commercially viable for anyone. Where is the profit? Continually reduce the number of staff so you only have the seconded Mil staff left? Who in the GOCO would be the LOAA holders? We don't allow contractor staff to sign off Airworthy decisions, so why now give to someone who has TUPE'd over to a commercial entity.


GOCO was the lovechild of the Turkey Baron, and as soon as Bernard Manning FOXTROT OSCAR, the better.

[GOLF_BRAVO_ZULU]

Originally Posted by High_lander

There seems to be an air at ABW that so long as it's procured, that's all that matters; the support or the dirty "in service" bit is lost on many at ABW.

I had a genuine hope that when the DLO was formed, the blinkered attitude to in service support that was commonplace in the DPA would fade away. Did it buggery. The Contractor hangs on a "support" bonus in the buy price and the Procurers instantly smile and pat their own backs on a "good deal". How else would certain Survey Vessels be supported from initial buy and, now, pooled stock that cost more outside the original support provisioning contract? How else would a certain renowned engine manufacturer agree to support and store Nuclear Steam Raising Plant to then rent storage space off DES's own Defence Storage and Distribution Agency? Up until then, double accounting was against the rules.

All we had to do is mend what we have; not compound yet more commercial cream skimming. S Pepys must be spinning in his grave like V Boat's INS.

[tucumseh]

I agree with the general sentiments about support being the Cinderella of MoD, despite accounting for around 80% of through-life costs. As one MoD Director (Cox) once said “You are the rump end of MoD”, an ethos that is now all pervading.



But if MoD were to study successful projects, they’d find that invariably the project manager, or a key team member, has worked his way backward through the procurement cycle. That is, he started on support (or even disposal) and therefore had experienced all the problems poor support planning and execution caused, and made provision to avoid them.


To this end, in the late 80s MoD(PE) had, for example, an avionic Integrated Logistic Support Unit. In PE, “ILS” was not what it is today, the bloat-fest built on Def Stan 00-60. If you worked in the ILSU you were responsible for ALL aspects of your projects, from cradle to grave. Suffice to say, there is not a single person left in DE&S who has such experience.


This was compounded by the Services getting shot of their own specialist support departments, demanding that PE do the work (a double whammy, given PE became anti-support, along with AMSO). For example, in 1988 the RN formed their Aircraft Support Executive, infamous for not making executive decisions or supporting aircraft. In more recent times, I’ve experienced both RN and RAF declare they will not support a major aircraft programme AT ALL, withdrawing all labour and destroying key files, forcing years of expensive regression. The only way such a programme can be successful is for the PM to have done it all before, and wear his old hats. At least the RN demanded experienced PMs be appointed. Historically, the RAF parachuted their own officers in to manage aircraft projects, regardless of experience (e.g. Chinook Mk3). I always felt sympathy for them, sitting with head in hands hoping some junior civvy would sit down and take over in his spare time. But CDP (Walmsley) was actively getting rid of them, digging an even deeper hole.

The worst day of my career was being introduced to a new boss in 1997. The 2 Star told us he’d been selected, not through normal competition, but hand-picked by senior staffs specifically because his CV was a golden list of aircraft experience, especially support. An entire section was devoted to his maintenance and trials experience. We made enquiries and his total aircraft experience amounted to a half day jolly to Fleetlands to watch a Lynx take off on a Maintenance check flight. That’s where MoD got to between 1988 and 1997, and nobody can tell me it has improved much! This is important in the GOCO context. From one viewpoint, GOCO needs to succeed because this unacceptable standard has become the norm. I think we are past the point of no return. In fact, the 2001 Army initiative I spoke of, which Gray cited as his preferred GOCO model, was required precisely because we didn’t have the in-house capability. An attempt was made to recruit people to be trained up, but they proved incapable because they didn’t have the necessary background. Their degrees in Defence Administration and the like were fine achievements, but little use when we needed hands on practical experience of support. I’m sorry, but if you permit direct entrants to skip 5 or 6 grades of valuable training and experience, without requiring them to catch up in any way, then you reap what you sow. Today, I imagine some form the DE&S hierarchy. Most don’t know they actually skipped grades. The above posts still exist, but most are vacant because no-one wants them. So industry step in at 10 times the cost.....

[JFZ90]

A few minutes on "Bechtel" wikipedia entry is revealing. They seem well qualified. First, some general mismanagement and cost overruns:

The CANOL pipeline contract went to Bechtel-Price-Callahan, a partnership formed for the purpose by the W.A. Bechtel Co., the H.C. Price Co., and the W.E. Callahan Construction Co. In June 1942, the Japanese invaded the Aleutian Islands off the coast of Alaska, and the construction began in earnest. However, due to poor planning by the Army and mismanagement by the contractors, the CANOL project failed totally. The pipeline consumed more oil than it produced and cost taxpayers an enormous amount of money. Furthermore, as time went on, it became clear that the Japanese did not have the resources to invade Alaska. The CANOL pipeline was abandoned after a mere 11 months in operation.

In 1943, the "Truman Committee" released a scathing judgment on the $143 million CANOL project, calling it more destructive to the war effort than any act of sabotage by an enemy. The judgment singled out Bechtel-Price-Callahan for criticism for its role in the cost overruns and mismanagement that plagued the project.

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In 1981, Bechtel constructed the Ok Tedi Mine, the largest mine in Papua New Guinea at the time. An engineering feat, the mine was constructed in one of the most remote and inaccessible regions in the world. Controversy would surround the major shareholder of the mining company, Broken Hill Proprietary (BHP), which is now known as BHP Billiton, when it allowed mine waste to be dumped directly in the Ok Tedi River after a tailings dam built by Bechtel was destroyed in a landslide. The Ok Tedi Environmental Disaster resulted from the riverine dumping of pollution.

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In the late 1990s Bechtel was awarded the contract from Saudi Arabia's Civil Aviation Authority to build Dammam's King Fahd International Airport, the largest airport in the world in terms of land area (780 km²), thus making it larger than the nearby country of Bahrain, that Bechtel completed later than schedule and at a cost that was over budget while bad transport roads led many locals to fly via the nearby Bahrain International Airport.

Note how they treat militarily sensitive information...

According to the Wall Street Journal, Bechtel established a strong relationship with the rebel leader Laurent Kabila during the First Congo War of 1996-7 in central Africa, compiling "the most complete mineralogical and geographical data of the former Zaire ever assembled, information worth a fortune to any prospective mining or oil firm" and commissioning and paying for "U.S. National Aeronautics and Space Administration satellite studies of the country and for infrared maps of its mineral potential." According to government officials, some of the satellite data provided to Kabila by Bechtel was "militarily useful information."

Looks like they can do massive cost overruns in the billions - could come in handy:

In early 2003, the Boston Globe launched an investigation into Bechtel's role in massive cost overruns and accounting irregularities in Boston's Big Dig project totaling over $1 billion. Bechtel rebutted the allegations on its website. The Globe, along with the Associated Press, filed papers requesting that Massachusetts Turnpike Authority make public the results of all Bechtel's performance audits related to the Big Dig. Bechtel sought a preliminary injunction to block the release of the documents, but the superior court judge in the case denied Bechtel's request on April 11, 2003, opening the way for public release of the documents.

Mmm, here's a hint of alleged corruption, mixed with some alleged poor management with a hint of gouging profits through IPR:

Like most large American companies, Bechtel and its employees have contributed large amounts of money to United States politicians (over a million dollars in campaign contributions between 1999 and 2002).
Following the 2003 U.S. invasion of Iraq, George W. Bush awarded the first Iraq reconstruction contract to Bechtel through USAID, on April 20, 2003. This contract was worth an estimated $680 million. It is alleged that some of the construction projects managed by Bechtel were either poorly implemented, failing within months of their installation, or designed in such a way that Iraqi engineers did not have the knowledge or components to fix Bechtel's proprietary technology.

Should be well placed to take on any airworthiness or duty of care issues:

In 2004 BWXT, a partnership of BWX Technologies and Bechtel National are fined $82,500 for a February 2003 accident at Oak Ridge, Tennessee's Y-12 facility after an accident caused a small explosion, a fire, and contaminated three employees.

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On July 10, 2006 a three ton section of concrete suspended ceiling crashed in the east bound lanes of the Massachusetts Turnpike I-90, in Boston. This tunnel ceiling collapse was in the Big Dig which Bechtel along with Parsons Brinckerhoff were responsible for building. This collapse claimed the life of Melena Del Valle, a 38 year old native of Costa Rica. Massachusetts Attorney General Tom Reily immediately designated the accident scene a crime scene. He has left open the possibility of negligent homicide charges being levied against Big Dig contractors and managers.

And to top it all, this bodes well for a potential single source contract!!!!

In 2005, Bechtel was awarded a no-bid contract by the Federal Emergency Management Agency to install temporary housing for the Hurricane Katrina disaster relief effort. The lack of competitive bidding for the contracts was criticized, as was the high cost of the contracts and the failure to support local, minority-owned businesses.

[JFZ90]

Calls for Bernie to resign....& media has picked up on Bechtel track record.

BBC News - Defence procurement privatisation 'dead in the water', says peer

[Just This Once...]

The whole thing is rancid and I am astonished at what has been going on behind the scenes. I've no idea if the behaviour of some is criminal, but someone needs to have a good hard look before it gets out of hand.

Big money is too attractive to some...