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What's wrong with "Off The Shelf"?

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What's wrong with "Off The Shelf"?

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Old 17th Oct 2016, 17:52
  #61 (permalink)  
 
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ShotOne:-
I just don't buy the line that we face a binary choice between a tortuous modification process and having something designed and built from scratch
I'm not sure that anyone is suggesting that, are they? The Hercules CMk1 was a good example of an RAF "Bespoke" aircraft. A bog standard Airframe and Engine package (though we wanted to hang Tynes on them!) was packed full of UK Avionics (not very successfully, though that's another story). It was also a very good example of us knowing better than the lead operator, the USAF, who specified ESF and FiiS for the fuel system. We didn't, and had to replank the wings and later retrofit ESF after 10 men had died. As I say, it is not COTS that is the problem but the MOD...
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Old 17th Oct 2016, 18:37
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choice between a tortuous modification process and having something designed and built from scratch
It often isn't the choice, but knowing how to manage it. Risk Management = Avoid the avoidable, manage the unavoidable.

Nimrod RMPA/2000/MRA4 kicked off in the late 80s with the development of a few piecemeal modifications. In 1995, CDP threw a large spanner in the works by decreeing that programmes shall avoid contracts that require MoD to provide Government Furnished Equipment. Of course, the first items on the Nimrod GFE list, to be provided to BAeS, were a fleet of serviceable and airworthy Nimrod Mk1s, for conversion. (The former ill-defined, because the latter was not policy). I wonder how many MoD departments promptly turned their back on RMPA, interpreting this policy as "new buy only"? I know the RN did on ASaC Mk7, immediately withdrawing all support and demanding new build, which would have required a 200% hike in funding, a long slip in ISD and reopening closed production lines; not to mention re-manufacturing tooling and trying to find skilled labour. It was a matter of pure luck if project offices in PE had staff who'd done these other jobs before and knew how to circumvent CDP's attacks on his own programmes. CDP was encouraged to at least say his policy applied to forthcoming endorsements, but he ruled it was retrospective. (He was by no means daft, and most thought it a poorly concealed cost cutting measure). From that day forth, your biggest enemy was your own 4 Star. Did I mention full-bored and countersunk?
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Old 17th Oct 2016, 21:40
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Before history gets too rewritten in this thread, I believe the initial concept for the MRA4 was limited to new, more fuel efficient GE engines, modern avionics/glass cockpit and new Missions Systems in the back. Amongst the (intended) major benefits were lower aircrew and groundcrew retraining costs, use of existing infrastructure and logistics chains.

That concept went into the negotiations with MOD and the new, unnecessary wing/engine combination emerged, in response I understand to phrases such as "must have Rolls Royce engines" and "what about wing fatigue?" BAES had eliminated fatigue as an issue and documented its reasoning at the very start of the process.

EAP
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Old 18th Oct 2016, 18:21
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Hi PDR

I'd love to read more, I'm guessing this was for a technical degree rather than a legal or commercial subject?

So it is not sufficient to have penalty clauses defined in a contract; the owner of the Mission needs to have confidence in the viability of the proposed solution together with faith in abilities and trust in the diligence of the organisation that an availability/capability contract will be awarded to. Availability/capability contracts are partnerships based on mutual trust and shared, common objectives, and developing that trust requires extensive collaboration in the planning stages. The current contracting environment inhibits this collaboration until after a contract is awarded, and imposes an adversarial environment until that point.

If I were designing a contract for development and I read the above in the brief my initial thoughts would be:

A penalty clause is not designed to guarantee availability/performance. It is an incentive to the supplier to show some interest, and part fund the fix required by the user. Effective penalty clauses are usually combined with a number of other risk measuring/reducing mechanisms in a contract - such as KPIs/escalation/geared incentives etc.

Any responsible project owner would be expected to conduct rigorous due diligence into all of the major risk areas of their project. In the commercial world, evidence that dd has been carried out is usually a pre-requisite to secure funding.

If you are competing a requirement (say, for a new engine/aircraft/armoured vehicle) then VfM would be difficult to achieve if you simply paid each supplier a large sum to collate reliability data. You would probably want to make confidence levels in reliability a significant element in your evaluation criteria. (Hence, P8 purchase makes a great deal of sense; see also Boeing's pitch for the T 38 replacement - they have manufactured 2 production aircraft (not prototypes)). The risk has been managed by the contractor (still owned by the operator though).

If the project has to award to a single chosen contractor without competition - then funding reliability could reduce risk - but you have to make sure you ask for relevant data - just look at the Type 45 engine saga. "Nothing to do with us" say BAe, "MoD is operating its ships in warm climates and that's not what they told us they wanted to do". No supplier risk - and no financial liability.

Finally, "mutual trust" and "partnering" are loose, woolly phrases bandied around in the forlorn hope that an inadequate contract will protect the MoD from poor performance. There are many non-commercial specialists involved in MoD procurement, most are intelligent and capable within their specialist areas, but a little bit of legal and commercial training followed up with some real experience would serve them and the Country well. Sadly, it does not always happen: hence a contract is viewed as adversarial; development contract methodologies are largely unknown, and industry is still occasionally allowed to run rings around bright, professional people operating well outside of their competences.
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Old 18th Oct 2016, 18:43
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Originally Posted by Bigbux
... but a little bit of legal and commercial training followed up with some real experience would serve them and the Country well.
Unfortunately that's precisely what too many of them HAVE had. A little bit.

Hence the rings being run. (And that's often not malicious, but self-protection by Industry)
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Old 18th Oct 2016, 21:59
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Originally Posted by Bigbux
Hi PDR

I'd love to read more, I'm guessing this was for a technical degree rather than a legal or commercial subject?
Well there's 54,000 words of it (226 pages with 14 jokes to keep the reader sane). It's an MSc dissertation, but its topic focuses around the interaction between the commercial and engineering processes in the UK defence sector. In fact at one point it was subtitled "Looking for a way to undertake a sound engineering process in a commercial environment that is explicitly designed to prohibit it" but my supervisor made me delete it. Some parts of it are confidential, but I could pass you a redacted copy of you're having trouble sleeping.

One of the interesting and controversial findings was that competition doesn't work. I don't know why this was so controversial, because the Audit Office had already found just this when looking at defence procurement - the programmes that were on time, on budget and delivering to expectation were generally single-sourced partnered procurements, whereas those which were late, over budget or failing to deliver were generally competed procurements (neither is 100% true, but the strong trend is clear in the NAO reports). In fact most of the problems on those programmes have roots that can be traced to a perceived commercial need to maintain "competitive tension" when it had no contribution to the Mission; that conflict just added complexity for its own sake and measurement of parameters no one actually cared about.

If I were designing a contract for development and I read the above in the brief my initial thoughts would be:

A penalty clause is not designed to guarantee availability/performance. It is an incentive to the supplier to show some interest, and part fund the fix required by the user. Effective penalty clauses are usually combined with a number of other risk measuring/reducing mechanisms in a contract - such as KPIs/escalation/geared incentives etc.
The point of that particular section is to illustrate the difference between military and commercial contracting. It is extremely rare in commercial contracting to have a non-performance which cannot be both measured and resolved in purely financial terms. The military mission is different, so a purely commercial model won't necessarily be appropriate.

Any responsible project owner would be expected to conduct rigorous due diligence into all of the major risk areas of their project. In the commercial world, evidence that dd has been carried out is usually a pre-requisite to secure funding.
In the UK defence sector it's not always possible. In some cases due to the technical risk or mission uncertainity and in others simply due to time and cost. For example a few years ago the MoD ran a competition (using the "competitive dialogue" process) to contract out its Air Traffic Management systems in a project called "Marshall". There were three downselected tenderers looking to take on, manage, update and/or replace a vast range of equipment on 106 MoD sites. Huge volumes of site survey data (drawings, specs, equipment lists, maintenance records, photos etc) were provided to the tenderers, but most of it was many years old and it was "unwarranted". Each tenderer was permitted a single "due diligence visit" comprising no more than 3 people per company for one or two days to each site. These visits were made together - tenderers had to seek information and ask questions in the presence of their competitors "to ensure a level playing field", so of course many questions went unasked. No further visits or questions were permitted, and on the basis of that the bidder would be expected to take on a £1.7bn risk with a 22 year maturity date. That's why one of the bidders pulled out before the second dialogue phase and the one that ultimately won the contract is now haemorrhaging money and looking to re-negotiate the deal.

If you are competing a requirement (say, for a new engine/aircraft/armoured vehicle) then VfM would be difficult to achieve if you simply paid each supplier a large sum to collate reliability data. You would probably want to make confidence levels in reliability a significant element in your evaluation criteria.
Good plan. How? Reliability predictions are meaningless and reliability measurement is extremely difficulty and expensive to measure for anything but very large fleets.

If the project has to award to a single chosen contractor without competition - then funding reliability could reduce risk - but you have to make sure you ask for relevant data
You're assuming the data exist. Reliability data only exist for off the shelf items which are currently fielded in large quantities for long periods in applications and environments which are identical to the one you're interested in. If any of these aspects are different the reliability data are meaningless. And in any event no mission owner is actually INTERESTED in reliability - they are interested in mission capability, mission success and mission affordability. In some cases this will have a dependency on Mission Reliability (the probability that the system will complete the required mission) whilst in others it will have a dependency on Logistic Reliability (the amount of stuff that will break which I need to expend resources to fix). Which of these dominates depends on the nature of the mission, and is unique to each instance. There are also cases where low reliability is unimportant provided the system has excellent maintainability - it can happily fail every hour if making it serviceable take 5 seconds with no skills, tools or spares.

Finally, "mutual trust" and "partnering" are loose, woolly phrases bandied around in the forlorn hope that an inadequate contract will protect the MoD from poor performance.
Again, experience says otherwise. There are several MoD programmes which succeed precisely because integrated industry/military teams operate with common objectives towards a common goal, with a simple KPI structure that is directly related to the mission rather than commercial dogma. And these are the ones which the audit office says deliverd on time, on budget with clear VfM benefits.

There are many non-commercial specialists involved in MoD procurement, most are intelligent and capable within their specialist areas, but a little bit of legal and commercial training followed up with some real experience would serve them and the Country well. Sadly, it does not always happen: hence a contract is viewed as adversarial; development contract methodologies are largely unknown, and industry is still occasionally allowed to run rings around bright, professional people operating well outside of their competences.
Well that's one view. my own experience is that the "commercial specialists" usually cause the problems - insisting on KPIs being allocated to every line item in a 500 page contract with each being measured and sentenced every month, requiring large staffs of people solely to collect data for sentencing when it serves no other purpose. I've seen these people insist that it's "mandatory" to spend £500k/yr for five years measuring and reporting performance stats for an item whose worst-case delivery failure would cost the front-line command an extra 4 maintenance man-hours per squadron per year. I think such commercial expertise is something we can all do without, actually!

PDR
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Old 19th Oct 2016, 03:28
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on the plus side, the RAF did buy King Airs and Bell 212s, which are probably about the best OTS aircraft you could buy, provided, of course, you don't mess with them....I wonder if the new Beech T6C purchase will avoid the Tucano bad habits...
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Old 19th Oct 2016, 04:21
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While not quite military (unless launching IMINT or other birds) I do love the story about the flight deck air-conditioning filter on one of the shuttles being cobbled together from a Toyota one (unbeknown to anyone at the time).
I'll see if I can find it...
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Old 19th Oct 2016, 11:40
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I seem to remember the USAF had to source spares from RadioShack a few years back.........
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Old 19th Oct 2016, 11:47
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Army Air Corps Beavers were pretty much off the shelf and proved to be a reliable machine. I suspect some may still be flying around but not with the AAC.
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Old 19th Oct 2016, 13:18
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OTS works with some things like training a/c, gliders, stuff that doesn't need to be flung into a warzone and stay in serice for 30 years.

The requirements of warfare can be too complex and ever-changing to support fully-COTS solutions hence the need for "bespoke". It's a difficult balance.

There again there are countless examples of perfectly suitable COTS systems, aircraft etc. that were/are perfectly suitable until the MoD got their clunking leaden fists involved where they didn't need to.
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Old 19th Oct 2016, 14:23
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In WW2, it was only the newest and latest virtually unproven designs that guaranteed a winning edge.
Unfortunately, many paid the ultimate price when that new technology or design had flaws that produced early and unexpected failures. That's the price of winning wars
Er No

Germany kit was better than Allied kit, just they had a manufacturing and people resource issue................. losing 10 T34s for every German tank sound like a bad ratio until you have 2000 T34's and they have 100 tanks.

Russian Tanks were no way superior but they just had a hell of a lot more of them.
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Old 19th Oct 2016, 14:27
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My own take on things is that too much of the argument for specialised equipment is based upon the dysfunctional procurement processes and overly extended operational lives.
Late 80's kept bumping into military types buying Gortex and other gear in outdoor shops who intended to use them.
Now could be argued about useful life but have a Bergaus jacket bought at that time that still used couple of times a year.
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Old 19th Oct 2016, 15:36
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Late 80's kept bumping into military types buying Gortex and other gear in outdoor shops who intended to use them.
The precise date escapes me but it was a January, 2002 or 2003, and the need for Army troops to buy their own kit was formally raised at 3 Star level, and a (slightly tongue in cheek, but serious) proposal put forward that they be repaid against production of a receipt. Until that point, many had bought items of personal preference, instead of using issued kit.. But the BOWMAN programme had made an assumption that troops would buy certain kit, and so had not made provision for another version in the first place. This was step change in MoD penny pinching. The item used in the test case cost about £25 from Silvermans, who were doing a roaring trade. No reply received!

edit: 16 January 2002.
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Old 19th Oct 2016, 15:43
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I'm not really surprised by many of these postings. People's thinking is typically conditioned by their environment but try and step back.

Warfare could be said to be somewhat competitive what sane person would enter any competitive arrangement with equipment that is 20 plus years old and expect to win? Things are like that because of the total dysfunctionality of MOD procurement.

When the MOD add in 'commercial' specialists they are not people who have delivered effective procurement programs, they are 'people like us' in other words civil servants or military personnel with inadequate training and no experience - unsurprisingly the budget is the first victim and delivery the second.

Anyone with half an eye on history could cite any number of examples where old equipment completely failed against a comparable opponent. For the sake of all concerned we had better hope that conflicts remain very asymmetrical, because otherwise we will get seriously embarrassed.
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Old 19th Oct 2016, 22:31
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When the MOD add in 'commercial' specialists they are not people who have delivered effective procurement programs, they are 'people like us' in other words civil servants or military personnel with inadequate training and no experience - unsurprisingly the budget is the first victim and delivery the second.
A work colleague for a short period worked in Aerospace industry (yup its deliberately wide) and came across a Purchasing / Logistical issue.
Inherited a services issue where told can't be made better blah blah blah................. red rag to bull issue and with half the staff and 99% availability of key spares a year later he asked them if he had made them believers
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Old 19th Oct 2016, 23:57
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Have oft heard a story that certain highly trained, mad-staring gentlemen from Hereford and similar places worldwide preferred COTS footwear i.e. Timberland boots?
Might be bollocks... or have been true many years ago before current Gucci-gear military boots were invented.

Last edited by tartare; 20th Oct 2016 at 00:46.
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Old 20th Oct 2016, 04:49
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A work colleague for a short period worked in Aerospace industry (yup its deliberately wide) and came across a Purchasing / Logistical issue.
Inherited a services issue where told can't be made better blah blah blah................. red rag to bull issue and with half the staff and 99% availability of key spares a year later he asked them if he had made them believers
MoD used to have posts in Service HQs which could best be described as Availability, Reliability and Maintainability Troubleshooters. Disestablished in January 1988 and never replaced. Worth their weight in gold. At the time we couldn't understand why, but with hindsight the decision makers knew the 3rd line workshops were being privatised, so MoD would no longer have people being trained to do this; and, indeed, very few are now employed at the grade. That doesn't excuse just ignoring the need for the work to be done.
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Old 20th Oct 2016, 10:02
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Have oft heard a story that certain highly trained, mad-staring gentlemen from Hereford and similar places worldwide preferred COTS footwear i.e. Timberland boots?
Might be bollocks... or have been true many years ago before current Gucci-gear military boots were invented.
Tis true from what have seen.

Some of the gear shops in Betws / Capel / Llanberis only employed people who used the mountains extensively, field testing equipment in action.

Mate at the time came across someone he had known when he was in, working there and while he stated "No official Military discount applied" if someone was in and had some proof a decent discount was provided. Only thing they asked in return was to come back in and tell them how the gear worked................ he said seemed to work well.
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Old 22nd Oct 2016, 04:52
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Consider what a disaster the USAF KC-767 tanker program turned into. The original intention was converting the 767 commercial aircraft into a tanker would save money. But that did not turn out to be the case.
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