Battlefield tech busts budget by £141m
The eight-year itch
Technical problems have pushed development of the next generation of battlefield kit £141m over budget over the last year.
A National Audit Office (NAO) report into 20 Ministry of Defence major projects to develop a range of aircraft, vehicle, communication, missile and detection systems found that over the last year their schedules had slipped by a total of eight years.
In total the 20 projects will cost £28bn - £3bn more than originally forecast - and they have now fallen a total of 483 months behind the timetables that were agreed when they were first approved.
According to the report, released today, over the last year five projects have suffered "significant" difficulties in keeping to their budgets and schedule: the Beyond Visual Range Air-to-Air Missile, the Nimrod Maritime Reconnaissance and Attack Mk4 aircraft, the Terrier armoured engineering vehicle, the Soothsayer electronic warfare system and Naval Extremely High Frequency/Super High Frequency Satellite Communications Terminals.
"Technical factors" are estimated to have pushed up costs by £141m, out of a total cost increase of £205m over the last year, and have contributed to difficulties that meant almost 10 per cent of key requirements on the projects are in danger of not being met.
Technical problems are also pinpointed as the main cause of cost and schedule slippages in the last half of the procurement stage.
The NAO report says: "The impact of these problems suggests that the risks associated with the technical challenges of these projects are underestimated when the main investment decisions are being made."
The NAO blames industry for failing to grasp the technical intricacy of some projects, giving the example of the Soothsayer project where it said a 16-month slippage over the last year reflected shortcomings in Lockheed Martin's - the contractor of the project - understanding of the technical complexity of the scheme.
Tim Burr, head of the National Audit Office, said in a statement: "The Ministry of Defence's major defence projects experienced further aggregate delays of 96 months and cost increases of £205m in 2007-08.
"The department has taken reasonable decisions to reflect defence priorities and progress has been made in improving procurement practice.
"But performance remains variable and, until the MoD and the defence industry improve their decision-making processes and show sustained learning from previous projects, value for money will not be consistently delivered."
The report says that on the basis of performance this year a quarter of these projects will not meet all of their key performance objectives.
Responding to the report, minister for defence equipment and support, Quentin Davies, said in a statement: "Today's report looks at only 20 out of some 350 of the MoD's complex equipment projects being managed by the department.
"Our priority is current operations and getting the right kit to the troops as quickly as possible; in the last year we delivered equipment valued at £5.8bn to our Armed Forces, from C17 aircraft transporting our goods and equipment, to the new Panther vehicles that are now operating in Afghanistan.
"We continuously respond and adapt to emerging threats, something the report acknowledges, procuring new equipment for urgent operational use in Iraq and Afghanistan."