UK MoD Issues Report on Through-Life Equipment Management
Over the last couple of years, DID has noted the UK’s innovative “Future Contracting for Availability” life-cycle approach to equipment maintenance, and highlighted its use in a number of articles. That approach became a formal procurement policy in the draft Defence Industrial Strategy (DIS) unveiled in December 2005 by the UK Ministry of Defence. The MoD has also focused since the mid-1990s on what it calls “Smart Acquisition” policies.
“Through Life Capability Management” focuses of the costs and capabilities of equipment throughout its life, not just purchase price, and is currently being trailed on major projects that include Britain’s new CVF/Queen Elizabeth Class future aircraft carriers. Success would remove many common problems from traditional military procurement, but this will prove to be challenging for both government and industry. Issues of public-private partnerships, contract management, and capability-building arise for both sides.
A recent MoD report looks at what it would take to succeed in this area, assesses the present gaps, and makes some recommendations. Its core assessment of the defense procurement dynamic is especially noteworthy, however, as it describes a situation that will be universally familiar to military procurement officers and observers around the world:
“The report finds that MoD’s acquisition system has a history of suffering from a conspiracy of optimism. Targets and incentives are poorly aligned. Behaviour is stove-piped and boundaries between organisations make the achievement of a through life approach more difficult. Necessary skills are in short supply and there is a need to concentrate more resources on training, to create greater unity of purpose in the acquisition arena, from the top of the Department to the bottom.
True everywhere. As for this particular report:
“This report was commissioned to advise whether changes should be made to the Ministry of Defence’s (MOD) structures, organisation, process or culture and behaviours in order to facilitate good Through Life Capability Management. It focuses mainly on structure, organisation and processes. This is not to understate the paramount importance of skills, training, culture and behaviours… There has been improvement in the delivery of projects to time and to cost, as represented in the most recent Major Projects Reports, and this must be sustained. At the same time we must ensure that the new equipment capability being brought into service can be supported in a cost effective and affordable way.”
The report largely delivers on its stated mandate, and does recommend some significant structural changes to Britain’s DPA, DLO, and related groups. Ideas like a 10-year view of defense spending across the board, contingency funds built into budgets, “capability customers” being saddled with responsibility for maintenance costs, et. al. will be familiar to some but nonetheless represent worthy contributions. This report is surely not the final word, but it does make a contribution to the procurement reform debate in Britain – and around the world.
Read the Minister’s introducing: “Enabling Acquisition Change: An Examination Of The Ministry Of Defence’s Ability To Undertake Through Life Capability Management” – or download the study directly in PDF format, [5.94 MB/ 54 pages].