The BAE Gravy Train
 

From all of the MRA4 banter on the Forum I thought I'd do some investigation of costs from NAO reports and other press articles and found some shocking facts:

QEII Class CVF £1.8Bn overbudget and expected 1 year late so far (ISD 2016)

Nimrod MRA4 £800M overbudget and was expected 9 years late (never made it into service)

Type 45 £1.5Bn overbudget and 3 years late (ISD 2010)

ASTUTE Boats 1-3 £1.5Bn overbudget and 4 years late (ISD 2010)

AJT Hawk £30M underbudget but 1 year late (ISD 2010)

Typhoon £2.3Bn overbudget from Main Gate and 4.5 years late (ISD 2003) without full operational clearance – first able to sit QRA in 2007 (4 years later)

Harrier GR5 ISD 1989 without full operational clearance, unable Op GRANBY in 1991 (still no weapons clearance) – limited ops with very limited recce capability from 1992 for Op WARDEN. 25mm cannon never delivered throughout service life from GR5 to GR9. First decent capability delivered for Bosnia in 1995 some 6 years after ISD. Unquantifiable costs as UK pulled out of development program in 1975 and then rejoined once the US had done all the development – rejoining the program allegedly cost about £280M.

Tornado (ADV) F2 into service with concrete in nose for ballast for no RADAR (ISD 1984). RADAR finally delivered 4 years late and 60% overbudget. Tornado F2 found to be seriously lacking in medium-high level performance so Tornado F3 developed and delivered from 1985 – increased re-heat thrust and extra AIM-9L launchers. Unit cost per aircraft including R&D was estimated at £42M* each at 1979 prices!

* taken from Land-Based Air versus Carrier-Borne Air ? Real Costs and Achievements over 40 Years The Phoenix Think Tank

Nimrod AEW - never entered service and rumoured to have cost between £1-5Bn.

Now I don't mind trying to support British Industry, but the above is taking the wee-wee if you ask me! When my pay is frozen, we're all staring redundancy in the face for yet another time (all to pay for the cost over runs in the equipment program over the past 30 years) and we're consistently accepting equipment into service that is quite frankly not up to scratch, when is "enough is enough".

Dr Fox, Mr Cameron, Mr Clegg or maybe even your opposition - if you or your advisors read these threads, please can you start investigating this horrific squandering of tax payer's cash and gradual raping of HMForces? I believe the MRA4 should become the catalyst for the time for this "Gravy Train" to stop.

iRaven

Horrendous figures - yep undoubtedly.

BUT, how many of the specs were changed by MOD AFTER the contract was signed.

That, and an utterly ridiculous mentality behind Cost Plus contracts - there have got to have been some serious back-handers going on there.

And you reckon politicians are going to look into that? I don't think so, who do you think gets most of the shadow money?

Quite understand your anger though, but it doesn't do much good. You just end up with an unchanged situation and high blood pressure.

Interested to see the ISD for Typhoon

The original ISD for the jet was 1996 with one slip allowed! Remember the interim title of Eurofighter 2000?

Foxhunter radars were delivered 6 months after the F2s in 85. It took until 90 to fix it.

But don't get me wrong. I'm right with the thrust of the argument! And.... it's not just BAES. I've seen similar dismal performances from US contractors. Anyone else remember the single emitter pre flight message in a US RWR?

Can't really blame BAE if they can get away with it - and its clear they can and have for decades!

If you want to blame someone, blame the incompetent foolish organisations and individuals who LET them get away with it, and almost encourage shoddy criminal procurement and contract management! THEY are the ones spending and wasting our money!

It was noticeable in the airborne weapons industry that, since most only did one thing, costs didn't get badly out of hand. If I remember correctly WE177 was completed more or less on time of around 5 years and within 10% of the original estimate.

As Dengue_Dude says it's the " Please design and build an air superiority fighter with 30mm cannon and A/A missile capability", 3 years later they say "Oh we now need it to be able to drop bombs and do ground attack" that causes a lot of the problems.

Alright, if no politicians will touch this - how about a journo?

Headlines like "UK Defence Industry takes UK Taxpayer for nearly £10Bn over 30 years" should shift a few papers whilst everyone is being squeezed due to overspending...

iRaven

At the risk of being banned or suspended for being too contentious, I think you are on a hiding to nothing. Yes the figures speak volumes, if you read them as just numbers. Once to take the time to understand the "why" behind the numbers you will see that it is not just a case of one company lining it's pockets at the expense of the country.

I do wish the seemingly never ending threads blaming industry for the state of the UK military would dry up. It's getting tedious

Hang on a second - your headline doesn't have BAE SYSTEMS in it - surely you made a mistake?

That's not the half of it, other contractors are making a lot of money for doing very little.

I wish I could say more but it would remove the crums from my table.

The obvious alternative is to "buy abroad"...meaning, in all likelihood, from the Americans. The trouble with this is that all the money spent is lost to the UK economy; at least, buying from national sources means that the money stays in the UK and gets disseminated as jobs, and can be reinvested. The industries concerned retain their capabilities and the skill set of their workers. Restricting the argument to the horrendous cost doesn't give the whole story...and remember the F-111 we were going to buy? Boeing's SST cost more than Concorde and all they got was a plywood mockup...

I agree that part of the problem is "moving goalposts"...and we surely need better contract supervision and purchasing control...but "state of the art" equipment is always going to be difficult to cost; things evolve as development progresses.

Surely there must be economical cut off to the decision not to "buy abroad" or "COTS". Here is a very simple suggestion:

Total cost of R&D + equipment cost + unemployment costs <= total COTS buy

For example, if we look at some assumptions for MRA4:

Cost of 2,000 workforce on dole (£12k pa) over 15 years = £360M
MRA4 R&D and delivery of 9 aircraft = £3,600M
Total £3,960M or £3.96Bn

Total cost of 9x P-8 Poseidon (at $220M each or £140M) is £1.26Bn

Now I know that we will get VAT back (now 20%) and also there are things like National Insurance, and host of other offsets - so let's assume that 50% of the £3.96Bn makes it back into the country's finances. Then the MRA4 buy will cost us £1.98Bn.

The difference in costs is then £1.98Bn for MRA4 and £1.26Bn for P-8 => P-8 COTS is still £720M cheaper.

Now what would would £720M buy over 15 years? Well that's £48M per year which means that buying COTS would buy us 1,600 extra Nurses or 1,350 extra school teachers - which would significantly offset those on the dole's jobs at the start of this model!!!

So far, the money argument on buying British and paying through the nose for it makes no sense to me...:ugh:

LJ

LJ the P-8 wasn't an option until lots of money had been spent on MRA-4 and you also need to buy BAMS to really compare it, so a flawed example maybe?

Not that I don't agree with the thrust of the thread. If industry knew moving goal posts were the problem then it should have reformed the process. Equally the customer has been inept, basically we have opened our wallet and said take what you want.
It might be spin but I have seen many articles in the last few years of how US companies have strived to provided efficiencies, JDAM unit costs, SSN manufacture, M1 Abrams reconditioning. They still get loads of cash but they provide much more for the money.

Igan

Or we could have been wiser and bought 8x P-3C, spare parts, a flight simulator and other material at the price of 271 million euro - just like the Germans did in 2004-2005. OK, they were 20 years old, but LM did some upgrades (Capability Upgrade Program - CUP) to bring them up to scratch.

Or in 2007 - The U.S. Navy and Lockheed Martin have finally settled issues over price and offset options, and are expected to soon sign a contract for 12x refurbished P-3C Orion maritime patrol aircraft for $1.3 billion, said sources in Taiwan.

We had the offer and we blew it 15 years ago...

http://i108.photobucket.com/albums/n...n/P1010885.jpg
(Credit to Vick Van Guard for his picture)

COTS = USA

I'm tasting willow in the back of my throat.

They already have too much power and influence over Little Britain.

THAT's one of the main reasons I back BAE. Inevitably they're influenced too, especially with ITAR, but 'we' are still capable of joining with European aerospace companies to go it without being controlled by Washington to the same extent.

However, the politicians would never allow that . . . they've rolled over again and are taking it up the bottom (probably reminiscent of 'old school days' what?)

"We must have a special relationship at all costs" . . . and boy does it.

Does it b0ll0cks. The SR is a very good thing for both sides.

If you do THAT at all costs, that's why HMForces are broke with more redundancies and a pile of yet to be shaped razor blades laying on the concrete at Woodford.

PS - the SR is allowing us to keep a seedcorn of maritime military personnel capability alive until we can sort out the friggin' mess that your beloved BAE have left us in!

I had written out about half a page in reply, but I've erased it.

Think what you like, I can't be bothered to put the effort in.

OK, it's all BAE's fault. . . there, that'll make it all better.

I promised myself I wouldn't post this publicly, since it'll just come off as ****-stirring, but I promise it isn't.

As briefly as I can, then: UK defence budget is very roughly 1/10 of US defence budget. Adding up everything I interpreted to be a cargo or search-and-rescue helicopter, and I may have made mistakes doing this, the Americans have more than 2600 available, including things like Chinooks, Black Hawks, V-22s etc.

The UK active military list seems to include... well, let's say rather less than one tenth that number, probably not even one-twentieth that number, even overlooking the enormous number of smaller helicopters the US has available, but nonetheless much more cargo-capable than a Lynx. I pick transport helicopters simply because they're a political hot topic, but the numbers are just overwhelming in other roles as well.

Are we really paying more than twice as much as the Americans to buy, maintain, crew and fly aircraft?

Perhaps 'economy of scale' comes into play here. We buy a product to fill a niche role, in limited numbers, whereas the Cousins build lots of airframes thereby spreading R&D costs over a greater production run.

Economy of scale is without doubt an issue. I remember a US colleague chuckling when I told him how many of our latest "state of the art EW system" we were buying. IIRC his reply was along the lines of that's about how many systems we order for our LRP (limited rate production) to get us through OT&E! He added that at the end of OT&E they would have expected just about to have ironed out the kinks.

The sad thing is that was in the days when we had aircraft fleets of (in some cases significantly) more than 100 aircraft. I guess we're not quite as well off nowadays...............