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...............

Plus la change
 

Let's see now;
How well has the current British aircraft industry served us?

The first all-British large jet aircraft to be built was the Comet... and 60 years later the last all-British large jet aircraft to be built was.. er, .. the Comet! :sad:(MRA4) .. And in between came the BAC 1-11, Trident, VC10, BAe 146 and Concorde at the high water mark....

Sad days

Flug

No great fan of BAE, but...

Typhoon - hardly BAES problem, look at the history, a big finger can be pointed at the German Govt and their continual delay in order to pay for re-unification, and at the way in which the system was divided between the ordering countries (e.g. not giving the FBW development to the country/company with the most experience in developing those).

Harrier GR5 - illustrates the problem with adding uniquely British requirements to a foreign design. If we had bought AV-8B OTS, then it could have been in service much earlier. You can blame BAE, but they were taking Someone Else's Aeroplane and modifiying it.

Tornado F2 - as has been posted, radar was only 6 months late, and needed a lot of tweaks to get right, but at that point GEC wasn't part of BAE. F2/F3 was always part of the development plan since early in the ADV program.

Nimrod AEW - again, see GEC.....

Interesting............... A good friend of mine was working with GEC at the time of the AEW Nimrod program. His big gripe was that the RAF changed the spec each time GEC had the equipment sorted to the last spec, as for upgrading the equipment GEC found themselfs obstructed by BAe who were very slow to react to any of the changed requested by the RAF.

Looking from the outside IMO it looks like The RAF, BAe & GEC all pulling in different directions and blaming each other for the problems, you can't help thinking that the people paying the bill should have imposed better management................. but that would require a civil servant to take some responsability!

And in the old-fashioned interests of impartiality.....
 

http://www.gao.gov/new.items/d09326sp.pdf

For those of you that can't be ar$ed, it's basically admission by the GAO in the USA that the average program over-run has risen to 22 months, the projected costs of the R & D phases are about 44% higher than budgeted for etc, etc, etc, etc.

Ref: GEC

GEC is the biggest part of the "SYSTEMS" portion of the company these days. Yes, they do have a chequered history of late delivery, for instance let's look at their Phoenix UAS:

At least 10 years late and their first combat showing isn't exactly exemplar (from Hansard June 2000):

I heard a rumour that over Basra the Royal Artillery lost 4 in 7 days and its nickname was the "bugg£r off!"; because it did just that!

So blaming it on a company that is now a part of the main company - surely that's even worse! Especially when the company that did the datalinks and control stations is now doing it for Mantis and Taranis (2nd time lucky?).

LJ

SFO

That would be fantastic - please can you ask your ex Lords and Masters to try and work to that sort of timescale and things would be sooooo much better :ok:

LJ

So many opinions, so little knowledge:

You may make razor blades from aluminium alloys, but you are not going to sell many and you're repeat business forecasts will eventually be revealed for the fiction they always were. Please tell me you're not on a project team.

Please tell me you have heard of Titanium?

http://www.superdrug.com/content/ebi...0/260460_l.jpg

No, I don't "work" for DE&S or any PT.

LJ

PS. Normally questions end in a thing called a q-u-e-s-t-i-o-n m-a-r-k.

PPS. Three major titanium applications for aircraft building:

1.fabrication of items of complex space configuration:
- hatch and door edging where moisture is likely to be accumulated (high corrosion resistance of titanium is used)
- skins which are affected by engine combustion product flow, flame preventing fire safety-proof membranes (high temperature of melting and chemical inactivity of titanium is used)
- thin-walled lead pipes of air system (minimum thermal titanium extension ratio compared to all other metals is used)
- floor decking of the cargo cabin (high strength and hardness is used)
2.fabrication of designated high-loaded assemblies and units
- landing gear
- fastening elements (brackets) of the wing
- hydrocylinders
3.engine part manufacture

BAE, the RAF, the MOD will get away with yet again squandering billions of UK taxpayers money , most of which has lined BAEs pocket. Nobody really cares just like the same people who dont bat an eyelid as somebody who has just died in Afghanistan. People are more concerened for there own wellbeing never mind the forces. Its a no win no win situation and its the easiest target as it already become apparent to take from defence as they cant strike or do anything about it. Boils my blood :ugh:

Wow! That's nearly two years' bonus for the Financial Services Industry! :eek:

BAE, the RAF, the MOD will get away with yet again squandering billions of UK taxpaye
 

Soooo true, look at the ATTAC contract !!!!!!!!:ugh:

Well, I can't let that one go. Perhaps you need to look at the wider picture, you might find cost and BAE is not the sole cause!

T.Mk.2 is to a certain extent in service, however, most of the current "delays" are around new facilities required - a GFX provision and nothing to do with BAE. (Well, apart from some design inputs that were taken onboard, considered and completely ignored!! Still, at least the student pilots will have HUGE classrooms! Who the hell cares about engineering support anyway!) I also know people who worked around the clock to ensure the support contract bid was cut in price to meet and exceed the MOD requirements placed on the company.

And Nimrod had it's problems as we know, but how many times did the MOD make demands on the support contract bid which were met, only for them to turn around and say "yes, that's good, now here's a lower figure to meet."

I am always amused when RAF types rage on about BAE and how cr*p they and their workforce are. I have worked here for quite a few years and have never, ever been more than a spit's distance from ex-RAF personnel, how does that keep happening?? To be fair though, some do actually acknowledge they have left the service and try and do a day's work.

Life is interesting the other side of the fence, especially faced with jet jockeys who share iRaven's prejudice and as a result will actually go out of their way to generate situations where they can point fingers at BAE for anything!

The problem with the un-initiated spouting their personal opinions is a complete lack of knowledge as to how the "other side" works.

As a current employee of "Waste of Space", I have marvelled as to how a lack of direction from our customer, coupled with a lack of funds from HM Treasury, results in a fudging of the finished product.

I'm not saying BAE are perfect - far from it, but the reality that struck home to my good self when I left Aunty Bettys' Balloon Corps, was that, until recently, BAE always offered 3 options when it comes to up-grades. Guess which one was always authorised by our financial masters? Often , these decisions were made on a purely funding basis. The best engineering solution was more costly, but in the long run more cost-effective. Like paying for your car to have 2 minor services, instead of 1 major one.

When one was serving in HMF, I would gladly have throttled the "f*cking a*sehole" who decided to stick the RHWR crate in Zone 19. On reflection, the spec for Tonka was merely for RWR - BAE had to wedge it in there somehow. The F3 was a bit more refined, and not as soul-destroying to work on.

Remember -the enemy is the Treasury - not the RAF, not BAES (unless you're Beagle, of course, :rolleyes:, or eal401:yuk:).

Much of that rings true from the MoD side of the "fence". I would add an extra enemy, though; MoD Centre. From my, limited by only 37 years, experience of Centre is that it tends to be packed with bright young things who want to make a name for themselves on their way up their personal career plan. Being highflyers, they often serve a dog watch before moving away from the consequences of their inovations and bold decisions.

Hey-ho! I've made a career out of patching bodged acquisition decisions.

Go for the lowest bid and endure the higher life cycle cost. That's always the way whenever the show is run by bean counters. :hmm:

I recognise much of what Gaz Ed, GBZ and Blacksheep say. It is always interesting to read other peoples’ experiences.

MoD(PE) used to use “troubleshooters” on problematic programmes. I loved that job but they scrapped the concept in the mid-90s. I’m not sure they could resurrect it in the same way now, because a pre-requisite was to have managed (on avionics for example) about 80 or so projects in every discipline (radar, comms, nav etc) and in every project phase (concept > disposal). MoD is structured differently now and no longer requires such experience at any grade or rank. The downside was if the troubleshooter was successful bringing a programme back on track it could be a career wrecker; mainly because, as GBZ says, those who screwed up in the first place have been promoted and don’t like the bar being set higher than they achieved.

Thinking of the programmes I worked on in that capacity, the problems were not all caused by “beancounters” or selecting the lowest bid. They fell into two main categories.

First, selecting a high bid by a company with no track record, as a result of political lobbying or simple favouritism. (The former more prevalent on high cost programmes, the latter on lower). That usually means having to let a parallel contract with someone else to fix the problems as they arise. (Westland have helped fix untold programmes in this way). Pay twice in other words, which is quite common and redress is seldom sought because the blame lies with MoD. That isn’t Tuc moaning; it is a formal ruling by CDP and Ministers. The resultant waste is appalling.

Others arose from not understanding Intellectual Property Rights and the hidden costs and dependencies if you select a company who doesn’t own the IPR or is at least the Design Custodian. They bid low, not necessarily because they’re cheap, but because they simply don’t have the wherewithal to provide certain services – a simple example is up to date drawings or pubs. That is, the Tender is not a level playing field. They get the contract and promptly submit a Contract Change Proposal demanding MoD supply “Government Furnished Information/Services/Equipment”, which they must buy from the Design Authority. This is compounded by, using drawings again as a simple example, MoD not maintaining them as Secy of State mandates. (This is all directly related to Haddon-Cave). The inevitable result is delay, increased cost (but not an increase in the fair and reasonable cost of the actual requirement) and, very often, equipment being supplied at a completely wrong Build Standard. And, very often unsafe.

There are a myriad of reasons and, as stated above, it is too simplistic to bang on about BAeS and other companies. No-one is perfect, but most companies I’ve worked with, which must be many hundreds now, try their best. At a corporate level, MoD don’t!! Individuals try very hard, but soon run into the “raising the bar too high” problem. It is the culture that must change. Perhaps Bernard Gray is just the man..............

theloudone

And what, EXACTLY, do you mean by that????

Has ANYONE in this forum heard of MoD profit rates?

F3sRBest
 

Not wishing to carry on with the BAE bashing, its not been the best run of contracts, and yes, i have had first hand experience of it !

Re Troubleshooters
 

Tuc,
The concept was resurrected in the form of the Project Rehabilitation Unit (PRU) now part of PTG I think.
All will be well soon, KPMG are on board to move the procurement process into the upper quartile standard..:uhoh: and Mr Gray may be just the man to move the procurement organisation out into the commercial sector, the only recommendation of his report not accepted by MOD, but now he's in charge ......

Its all part of the design.

Spy satellites and christ knows what GCHQ needs these days all cost billions more than the official budget line. This money comes from the defense budget in the form of massive cost overruns. Really. Why does adding a gun cost 200 million? Why does x y z cost a b c where the numbers are always very high?

I don't know.

But its been the same for decades, here in the USA and elsewhere. Its not changing despite promises to do so now decades-old.


So.


It must all be part of the design. There's money being spent on things which cannot be acknowledged and the cost is being put on public projects which makes them look exorbitant. Its the only logical conclusion for me.


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