The UK's National Audit Office (NAO) latest report on the UK Ministry of Defence's 30 biggest procurement programmes shows improvements, but also reveals underlying problems for the future.
The 30 programmes in Major Project Reports (MPR) 2002 are split into the 20 biggest procurements which have passed the so-called "main gate" approval into the demonstration and manufacturing stage. Ten of these are in the report for the first time this year, and have been implemented under the "smart acquisition" procurement reforms. The remainder are in the assessment phase. The report covers the 12 months to 31 March 2002.
Overall, the 20 post-main gate programmes are £200 million ($311 million) under the approved £45.4 billion budget, which is a £100 million improvement over the top 20 procurements last year. Costs are, however, more than £1 billion greater than the original forecasts.
In-year time slippage "outside approval" has been reduced by nine months to 20 months since the previous report, with the total overrun trimmed from 577 months to 173.
Much of this is because older programmes, which have the longest delays, have entered service and are no longer covered by the MPR. In-year slippage has grown from 29 to 43 months, mostly on older projects. However, two more recent programmes, the Airbus Military A400M and MBDA Meteor, accrued delays - the former having already exceeded the leeway placed in the schedule to cushion for potential delays.
Edward Leigh, chairman of the Parliamentary Public Accounts Committee, which oversees government spending, says the MoD may be storing up problems for the future. "I am concerned that the MoD's progress may be masking deeper trouble ahead," he says, adding: "There was an unusually large number of new projects last year. Even at this early stage, on some of them there are indications that the rot is setting it. All five of the projects which have been approved since 2001 have run into trouble, and one of them [the A400M] has already been delayed by 16 months. This is worrying because cost increases and some delays tend to occur later in the projects."
UK defence procurement minister Lord Bach says: "It is unrealistic to expect that smart acquisition will result in uniform success straight away, and we will experience some setbacks. Project delay remains an area of concern, and we will continue to work hard with industry to improve our performance in this area."
Source: Flight International
