Is UK Defence Procurement Broken? No, it is not.
If you believe the latest reports from the House of Commons Defence Select Committee (HCDC) Defence procurement is broken and in urgent need of fixing. Is this a fair analysis or has Parliament not given a fair hearing to the MOD?
One of the most timeless topics in defence coverage is that
of defence procurement delays and cock ups resulting in useless equipment being
delivered far too late to be of any use. A few weeks ago, while visiting the
lovely town of Berwick Upon Tweed with fellow blogger ‘Fighting Sailor’, both
of us were struck by the signs around the town walls. Berwick used to be a critical
settlement on the border between England and Scotland and was fought over for
many centuries. As part of a programme of defence improvements in the Tudor
era, walls were built around most of the town, but the project was late, over
budget and failed to deliver as expected – meaning not all the walls were
built. A timeless story of Government failing to project manage defence
procurement properly?
Looking at Defence procurement objectively it is worth taking stock of just how complex and vast an operation it is. In the UK, the Minister for Defence Procurement (MinDP) is responsible for the delivery of a portfolio of programmes covering land, sea, air, cyber, space, communications and logistics, to support the global operation of 200,000 regular and reservist military personnel across every continent on earth. This ranges from providing rifle bullets and small arms, through to fighter jets, aircraft carriers, communication satellites and nuclear submarines. The MOD equipment plan is one of the most ambitious and complex on the planet, matched only a small number of other states with equal aspirations. The report notes that the multiyear programme MinDP oversees is worth approximately a quarter of a trillion pounds.
Why then does Defence seem to do so badly at buying kit in
the eyes of the HCDC? Frankly Humphrey isn’t sure that this is a fair view at
all because much of the report focuses on a small number of programmes that
have had challenges, often for reasons outside the control of the teams
purchasing the equipment. For example, we forget that these projects take a
really long time to design, develop, deliver and deploy. Look at the Type 26 frigate,
which had its gestation as a design in the early 1990s, and owes its current iteration
to a design contract placed in 2010. It has had to live through four general
elections, and five Prime Ministers and
associated ministers, all of whom will have had different views on the importance
of the project to Defence. This length of time for procurement matters because priorities
change over time and funding problems change. What seemed an essential ‘fund
now’ capability some years ago may quickly become a source of ‘fat’ to trim
spending from years later to reduce pressures on the budget. What was a well
managed and on time project may quickly become beset by problems to help solve
wider turbulence in the programme. When a project may last 10-20 years from
inception to delivery, let alone actual service, it is easy to see how these
problems can help delay projects that may otherwise be on track to deliver.
Allied to this is that over time technology changes and what was previously thought impossible to deliver may, in just a few short years, become the norm. Ask anyone in the year 2000 for a handheld device capable of accessing work emails, making secure calls and having built in internet browsing capability and you’d have been laughed at. By 2010 it was seen as utterly routine to have a smart phone in your pocket. The same issues apply equally to wider defence projects – as science evolves and capability changes, does it make sense to change the design and add new requirements to reflect changing operational circumstances? Planners face a wicked problem – faced with new technology that may materially change how equipment could be used, but with the project underway, do they press on as planned, or instead pause, redesign and amend the user requirements and change it? The former is far more likely to deliver equipment as planned, but its long-term sustainability and survivability may be far less than if it had been updated while under construction – and retrofitting it later may cost far more than bringing it in at the outset, even if this delays delivery. There is no right answer to these challenges – it is about managing risk and assessing what is in the long-term interest of Defence and is also affordable in the short and longer term.
The question for senior decision makers is where do you draw
the line? Is the public better served by pressing on as planned or spending
more in the short term, increasing pressure on the budget or pausing it for longer
term pain? Defence is arguably uniquely exposed to these problems, suffering
from the combination of long procurement lead times and also a need to retain
cutting edge access to technology to retain ‘mission advantage’ when it comes
to being able to operate with allies against likely threats. The wider civilian
procurement industry does not have the same level of problems, with companies
dealing with either more tightly bound requirements (e.g build a school, bridge
or hospital) or more limited technological innovation (it is rare for most
areas to see technology change incrementally and rapidly in such short time
spans). Trying to compare the unique world of military procurement to the rest
of the procurement sector and expecting it to make sense is, arguably, a fools
errand.
There is also a danger when looking at procurement of
assuming that ‘if we treat everything like an Urgent Capability Requirement (UCR)
then it will all be bought rapidly’. This is a key theme of the report, but
which neglects to understand the difference between UCR and mainstream
procurement. The reason it is easy to buy equipment in a hurry for a campaign like
Ukraine or Afghanistan is that the user requirement is clearly defined, you are
buying it in a hurry for a short term operationally specific requirement and
its highly unlikely to become an enduring item in the inventory, meaning you
don’t need long term support contracts or meaningful integration trials in
place.
UCRs (UORs in old money) are brilliant for some specific
areas and it is right to acknowledge that they have a key role to play. But the
report fails to acknowledge or understand that they also provide very specific ‘one
trick pony’ solutions to very specific problems. They do not provide equipment
that can be used across the totality of missions the MOD is likely to do. They
are not properly integrated with all the equipment used by the MOD, meaning there
is no guarantee they’ll work as planned and there is no long-term support solution
in place that will keep them working for the long haul. A UCR is essentially
buying a disposable piece of kit for ‘the war’, not a long-term piece of kit
for ‘a war’. They’re great, but only if specific areas.
The other forgotten problem with shifting to a ‘UCR
mentality’ is the impact this has on wider project support. During OP HERRICK
the MOD shifted significant resources to ensuring the right level of staff
support was available for delivering UORs. This led to widespread staff
shortages on less time critical projects and had a negative impact on their delivery
– good staff were snapped up for urgent projects, while other ones were either
gapped or got the ‘dregs’. The danger of UCRs is they create a ‘feast or famine’
mentality whereby staff want to help and will do all they can to help, but they
are leaving other projects behind to do this. The longer term impact is it can
heavily disrupt proper procurement plans.
There is a wider point here that the report touches on which
is that its really hard to get staff to stay in the government project management
business. The Civil Service is a rewarding and good career to those who want to
stay in it, but at a time of poor salaries and high inflation, it is simply not
competitive to people struggling to pay mortgages or support a family. You get
the talent you’re prepared to pay for and at the moment many Civil Servants feel
undervalued and underpaid and know that there are plenty of defence contractors
who will pay far better money for their skills and experience. Trying to offer
a reward package that keeps people in will be crucial, and also ensures that
there is long term career opportunity. The decision to freeze MOD Civil Service
recruitment to pay for the Armed Forces payrise may be popular, but will only
make matters worse for the MOD trying to retain talented staff who are now
unable to secure promotions or more money internally – the impact is likely to
further deepen the corporate reliance on contractors and consultants to do jobs
at far more cost than paying a civil servant to do it for them.
Another point made in the report is that the military need
to have an acquisition career stream. This does already exist, but there is
little glamour to many in becoming a procurement expert. When combined with a centralised
career management system that prioritises moving people over keeping experience
where it needs to be, its little wonder that there are challenges getting good military
staff to support procurement. The armed forces must be one of the last bastions
where you can take someone who has spent 15 - 20 years doing one set of roles and
then decree that for the next 2 years they’ll be playing a critical part in
defence procurement, usually without any prior experience or training to support
this. While there may be good reasons for this, the risk is that the generalist
approach to career management is, in the main, not a good way to generate
people who are long term procurement experts. The real danger is that with a hollowed
out civil service to support this activity, defence procurement may suffer from
a lack of deep experts.
The final point of concern about the report is the way that
it contrasts the UK to France, Israel, Japan and the USA based on a couple of
trips to meet people out there. The report coyly notes that Israel only has 300
people in their version of DE&S and that support is done by contractors.
This is a dangerously disingenuous approach to take. The Israeli military situation
is utterly different to the UKs, with a far smaller and more defined military
threat. It also relies exceptionally heavily on the US ‘Foreign Military Sales’
(FMS) approach to provide new equipment – which essentially transfers the procurement
risk onto the US to deliver pre-designed equipment that meets Israeli
requirements. The report doesn’t note how many people are involved in the
defence industry to support this work either, which is likely to be not inconsiderable.
Trying to compare the UK to Israel is meaningless as both nations have
completely different approaches to Defence procurement. Similarly comparing the
UK to Japan makes little sense as Japan too is heavily reliant on the FMS system
and there are plenty of accounts out there of issues with Japanese defence procurement.
There is a sense in this report of people trying to kick the MOD when its down,
presumably because its easy to be seduced by pretty PowerPoints given on
publicly funded jollies abroad rather than be genuinely objective in their
approach.
The fact is that the UK has a unique set of challenges when it
comes to defence procurement in that it has to balance off a hugely diverse set
of needs, support a very complex industrial ecosystem and do so in a way that
supports the taxpayers interests short and long term. This leads to compromises
that may not always be great, but which make sense at the time for the circumstances
in which they were taken. The report fails to recognise this – were the UK to
go to down a similar route to Israel of mostly relying on FMS, then while
procurement would be sped up, it would be at huge and probably terminal cost to
the UK defence industry – much to the disgust of the same committee.
It is telling that the report focuses largely on covering
three sensational projects, Type 26, Wedgetail and Ajax – all of which have had
issues that are not directly linked to procurement to fix (e.g. the decision to
only buy 3, not 5 Wedgetail which is a policy savings measure not a procurement
choice). What they don’t focus on is
what the MOD gets right day in, day out, and this is that for every one or two
high profile projects experiencing challenges, hundreds are delivered with
minimal drama. The MOD excels at getting complicated challenging and cutting
edge technology into service quickly and efficiently and doing so in a way that
supports the military. Many of these projects get no media interest or
Parliamentary scrutiny, but they do deliver what is expected of them.
Perhaps this is the better answer to the question of ‘is UK
defence procurement broken?’ Does the MOD manage to purchase and support a
globally focused force capable of operating around the world in a variety of
warfighting operations in a timely and efficient manner? Does it get equipment
into service by and large on time, as intended and with a minimum of hassle or
loss? Is the procurement process fair and free of malign influence? Can it meet
the rapidly evolving needs of the Armed Forces and can it produce equipment
that will be fit for purpose for decades to come? To all these questions the
answer is surely an emphatic ‘yes’, which in turn means that despite the odd public
blip, UK defence procurement is definitely not broken.
>"Trying to compare the UK to Israel is meaningless as both nations have completely different approaches to Defence procurement."
ReplyDeleteThat's perhaps accurate as far as it goes, but a more searching analysis would ask: *should* the UK adopt Singapore's approach to defence procurement? Several reasons why the UK would be disinclined to do so include:
1. The MOD still has delusions of being able to afford a bespoke, so-called Tier 1 military, with ££££ to spend on whatever it can dream of. The UK has no money*: this will never happen.
2. MPs, for both reasons of both jobs and jingoism, want to retain a UK industrial capability, regardless of the adverse impacts on military capability (i.e. "Buy British, even if it costs more and works worse").
3. There is a reluctance to accept, as Israel has done, de facto dependance on the US.
I'd argue that the above isn't affordable. The reason why we have the Ajax debacle, and the daft Challenger 3 decision, are because of a determination not to buy Military Off The Shelf from elsewhere. Serving sources recount that the reason for Challenger 3 rather than the far more sensible and interoperable Leopard 2 is because a senior politician said, "There's no way I'm buying a German tank!". Not a good reason. Leopard 2 and CV90 would have made eminent sense (indeed, still do: it's not too late).
The Army is deluding itself - and many UK politicians - about its real capabilities. Unfortunately, neither the UK's allies nor its enemies have any such illusions. The former know that they can't rely on us, and the latter know that the Army is a brittle shell. Ben Wallace is even quoted in the Defence Select Committee report alluding to this: 'The Secretary of State for Defence himself has acknowledged to Parliament that the UK could not currently field a warfighting armoured division: We have not had an armoured division that could really deploy since 1991. [… ] For many decades, we have not really delivered what we said on the tin. That has been an issue. If I look on paper at the current armoured division we have, it is lacking in all sorts of areas. It is lacking in deep fires, in medium range air defence, in its electronic warfare and signals intelligence capability, in its modern digital and sensor-to-shooter capability. On top of that, it is probably lacking in weapons stocks.'
* https://london2050.wixsite.com/miscellaneous-musing/post/uk-prognosis
Correction: Israel, not Singapore in my last comment...
ReplyDelete