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MoD defence capabilities programme in trouble, says NAO

The Ministry of Defence is struggling with its £196bn defence capabilities programme, as 10 of 32 projects, including several technology ones, are in trouble, according to the National Audit Office

Almost a third of the Ministry of Defence’s (MoD) defence capabilities programme is in trouble, according to a National Audit Office (NAO) report. Some 10 of the department’s 32 major projects that are part of the programme, which include several technology projects, either require immediate action or are too far gone to be delivered on schedule.

The programme procurement costs are estimated to be around £196bn for 32 of the most “significant defence capabilities” the MoD is bringing into the service, according to the NAO. However, on average, the major projects are on schedule to be more than two years late, according to the report. One of the main issues has been funding challenges, which has affected the capability to deliver the systems on time.

This includes the upgraded £46m Base Inventory Warehouse Management System, which was “postponed for funding reasons until a key component of the legacy system was identified as life-expired, and then funding was provided,” according to the NAO report. “Even then, funding shortfalls created several problems during delivery of the capability,” the report added. It also suffered from problems due to “a limited capacity and capability to deliver training” in the MoD.

The system replaced the Royal Air Force’s (RAF) previous systems, but the MoD struggled with training on the system, using generic trainers, rather than specialists, and there was also a high turnover of project management personnel, the NAO report said.

The project originated as a “one-line sub-project within a larger programme to replace the old inventory management system, but due to uncertainty over the actual requirement for the system, the project stagnated for almost five years, had no specific funding allocations, and “suffered from “unclear deliverables, questionable requirement and un-finalised timelines”.

Another technology project suffering from the lack of capabilities at the MoD is the £71m Falcon Early Entry Capability (FEEC) battlefield communication system. The system is meant to be a smaller and more portable version of the already existing FEEC battlefield communication system for rapid response forces, and is part of a much larger Land Environment Tactical Communication and Information System programme.

Here, training was also an issue, as the MoD struggled to fund a training solution for the system. “A lack of previously promised capacity in the training solution delayed internal operating capability while the delivery team funded an alternative solution using the contractor,” the NAO report said.

Problems with flexibility in capabilities

The NAO report found that the department has realised that technological change “will continue to increase at a pace that outstrips the agility of its current capability planning and acquisition system”, and set out a flexible approach to procurement to respond to the speed of technological change “by subjecting core capabilities to a process of continual upgrades”.

However, the NAO added that making changes could have mitigated problems arising in projects such as the battlefield communication system, where “individual capabilities were obstructed by a failure to keep pace with technological change”.

Overall, the NAO said the MoD is struggling to deliver “key parts of the UK’ planned defence capabilities programme”. Adding new capability in the battlefield communication system programme is “constrained by obsolete technology in other parts of the system,” the report said.

“However, the danger of moving away from the traditional approach whereby a capability is generated against a set of fixed, clearly defined milestones, is that stakeholders across the defence environment will be unclear what level of capability a system has achieved at any given point,” it added.

 The programme has also suffered from “competing priorities during demonstration and manufacture phases” where during the manufacturing stage, the design was frozen, and several critical software patches were released.

“As a result, an eight-month backlog of patches had to be applied before IOC could be declared. Patching is also more difficult because Falcon Early Entry Capability (FEEC) uses a more up-to-date operating system than the rest of Falcon,” the NAO said.

The average forecast delivery delay of an initial operating capability is 12 months, whereas delay to full operating capability sits at 26 months.

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Overall, the NAO found that the MoD is struggling to deliver key parts of the defence capabilities programme as projects are “not being consistently delivered to the expected standard or on time”.

“At a time of fast-paced technological developments and global change, it is essential that the MoD can make swift and full use of the capabilities it needs as planned,” the NAO said.

“Failure to deliver them on time is likely to undermine the MoD’s ability to carry out its key tasks, and lead to overextended use of existing assets, and additional costs.”

NAO head Gareth Davies said it’s essential that the MoD improves the way “it introduces new defence capabilities into service”.

“This includes ensuring that pressure to be seen to deliver quickly does not lead to it accepting incomplete projects, and making decisions on the basis of incomplete reporting,” he said.

Commenting on the report, Public Accounts Committee (PAC) chair Meg Hillier said that the delays are a “serious” issue.

“All too often, equipment is delivered late or has failed to meet promised requirements, but the MoD struggles to get suppliers to perform,” she said. “Things need to change and change fast. There are risks to national security if not. The whole culture needs an overhaul and the MoD must drive improvements to the system.”

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