MoD plans 'name and shame' crackdown on crap projects
If they don't buck up... we'll name them again!
UK Defence secretary Liam Fox has pledged to crack down hard on poorly performing defence procurement projects, by "naming and shaming" them on a quarterly published list.
Announcing the commencement of operations by the new Major Projects Review Board, which he will chair, Dr Fox said:
"I want to send a clear message across Defence: reckless spending stops here. Too often there has been too much reliance on industry's self-reporting of time delays and capability deficits ...
"I am tired of the National Audit Office reporting on projects that are running over time and over budget. Where projects are falling behind schedule or budget I will take immediate measures."
Should the Board become concerned about a project's progress, it will summon programme managers to explain themselves. If no improvement occurs by the next quarterly process, the failing project will appear on the MoD Projects of Concern List.
If delays, cost overruns etc persist despite this public outing, well then, the failing project will remain on the list until it does shape up. Dr Fox appears to consider that this will have a negative impact on the relevant contractors' share prices.
"I want shareholders to see where projects are underperforming so that the market can take action."
According to the MoD, projects now under the MPRB microscope include the infamous Watchkeeper unmanned air vehicle surveillance system, which should have been in service last summer (it is now expected "later in the year") and which - if it comes in on budget - will cost between three and four times as much as competing aircraft with better capabilities.
In an early sign of just how rigorous the MoD's scrutiny of itself can be expected to be, Monday's MPRB announcement describes Watchkeeper as "an unmanned air vehicle surveillance system with a main contract value of £635m". The most recent National Audit Office report (pdf) states that Watchkeeper is forecast to cost £889m.
Quite apart from its annual examination of ongoing MoD projects, the National Audit Office sometimes mounts one-off probes into specific efforts. It recently published a damning examination of the value for money being delivered by the infamous Eurofighter (aka Typhoon) combat jet, for instance. This revealed that the project will deliver an operational fleet of just 107 jets, each of which at £215m will have cost significantly more than an F-22 Raptor super stealth fighter - despite not having stealth, electronically scanned radar, thrust vectoring or most of the other goodies offered by the Raptor.
The NAO also revealed that the MoD expects to spend no less than £13bn on supporting the Eurofighter in service until 2030: in reality the figure will be much higher.
Nonetheless there is no suggestion that the shameful Eurofighter might make it onto the Projects of Concern list, no matter that the MPRB is to consider other support contracts such as the berthing deal for the new Astute class subs.
It would seem that the NAO will need to keep looking into the MoD for a while yet. ®
Can we name and shame politicians for signing poor contracts?
If the government pays a contractor far more than the original budget then that represents a success for the contractor and should result in increased share prices. If the government feels hard done by on some contract then the answer is to throw future tenders from the annoying supplier in the bin.
The other side of this is the government needs to learn how to specify what they want, and only pay for chunks that are sufficiently well documented that they can be built elsewhere if the relationship turns sour.
You can bet
That at no point will ministers be to blame, the Treasury or the NAO, and a significant reason for cost escalation is by Political interference, budgetary replanning or spend governance.
Not though I hasten to add, that contractors and MoD project staff are blame free. What's really needed is a radical new approach to government procurement, not more governance and oversight.
And if you ask a supplier to deliver a Cow then don't change your mind and ask for a Pig halfway through the project. It's probably cheaper to cancel and start again, well Mr.Supplier, if you want to be in with a chance to partake in the new programme, you won't want to be too stringent on the cancellation costs.
Sorry, forgot, private is always better.