Improving UK Defence Procurement
Given the well-publicised views of General Sir Richard Barrons, it is reasonable to suppose that the impending SDR report will focus in part on the need to improve the UK’s poor record on defence procurement. We do seem to have a slavish adherence to processes that encourage “the can to be kicked down the road”, continually. Resulting on cost escalation and allowing a change in the strategic context over time, that often makes the initial capability requirements obsolete.
Tychonics does not want to dwell on the faults of the current systems but instead focus on some ideas on how we can modernise procurement to make it responsive to dynamic threat vectors we face as a country.
This blog will be part of a series that focuses on specific recommendations, based on our experience of delivering complex capabilities in other domains and for foreign governments.
Project/Programme Business Cases
The 5-case business case model is comprehensive but, in many cases, does not address early enough feasibility issues. One of our founders (Alasdair Rodgers) was an Associate Director and Project Director at Ove Arup and partners. In the built environment certainly when dealing with mega projects such as the 2012 Olympics where the developments must be delivered on time, there is very rigorous feasibility study undertaken. Often in the form of a concept study which looks at the various ways that the design outcomes can be achieved, but also whether the appropriate resources, skills and supply chains can be mobilised cost effectively to deliver the outcomes within the client’s time-frame.
During this stage – RIBA Stage 2 – a process of value engineering is started, so that design requirements are traded to de-risk the delivery programme. The level of trading needed to make the key risks manageable, may make the original design concept unviable. But better to find this out sooner and avoid costly mistakes.
We believe that UK Defence Procurement needs to have more focus early on capability feasibility issues, balance of investment options and value engineering. Before too much effort is spent building business cases and developing cost models.
Also, feasibility studies must be built around options that have been subject to risk sensitivity analysis. Too often the conspiracy of optimism means that 3-point estimates are skewed towards more favourable outcomes.
A business case process which takes years means that the case invariably has obsolete and time expired data & assumptions in it. Learning from experience from the RIBA and APM work plans see to us to be a good place to start.