Defence procurement – A dismal record

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Torpedoes – don’t mention them to MOD Procurement. Like so many other defence projects, the history of torpedo procurement has been an embarrassing litany of massive cost and time overruns.

This sorry record was analysed recently by the incisive Gray Report, which put forward a raft of recommendations for improvement. Indeed, this Report concluded that the average cost overrun for major projects was an astonishing 40%, whilst the average time overrun amounted to a staggering five years. With the next government inevitably seeking cost savings, MOD Procurement will be a prime target, especially since many major projects are currently overrunning.

Within the aircraft purchasing programme, the Typhoon F2 multi-role fighter has been desperately expensive, with future off-take orders likely to be pared back: the F-35 Joint Combat Aircraft (JCA) order book may suffer similarly. The Airbus-derived A400M troop transporter programme is still facing serious financing problems, as has been acknowledged recently by EADS. And the Future Strategic Tanker Aircraft project is also experiencing formidable cost pressures.

Naval procurement programmes have fared little better. The six Type 45 destroyers have faced lengthy delays. The first of the six, HMS Daring – HMS Despairing if you are an MOD accountant – was two years late and £1.5 billion over cost. As for the Army, the £16 billion Future Rapids Effects System (FRES) programme has hardly been free from pronounced cost increases and delays.

The next Government – irrespective of its political hue – needs to get a firm grip on MOD Procurement. Implementing the key recommendations of the Gray Report would be a sensible starting-point. And Ministers need to be ruthlessly focussed when placing large orders, especially those relating to EU-wide defence projects where financial discipline is notably lacking.

Of course, MPs seeking defence-related jobs, ever-changing specifications and technical advances do make matters very complicated. Even so, is this record anything but dismal?