UK MoD/Industry Relations - The Farmer And The Cowman Should Be Friends

Over January and early February a serious, often downright unpleasant, slanging match took place in the British media over the Royal Navy’s CV(F) Future Carrier programme. This then dovetailed neatly into the reported arguments over creation of a unified UK shipbuilding company – “NewCo” in the terminology that sprang up.

The arguments, coming from both the Ministry of Defence’s Main Building and parts of the Defence Procurement Agency, threw vast amounts of ordure at – primarily – BAE Systems, raising the Nimrod MRA4 and Astute SSN programmes as examples of just how awfully the company had performed. In fact, the notion that a ceasefire between BAES and MoD over public spats, which came into effect in the middle of last year, appeared to be totally off the card. But the situation with regard to the CV(F) programme and other big-ticket projects was one of open warfare.

Why, oh why on earth is this type of behaviour seen a) as suitable to defence procurement, and b) reasonable, and c) of any value whatsoever when it comes to the often vexed business of buying defence equipment? (Sorry, we are not going to fall for the “in” definition of “acquiring capability!”). Who actually believes that a pressure cooker, confrontational, adversarial style of doing procurement business achieves anything? The answer has to be that too many inside MoD Main Building, as well as in the DPA – though one mustn’t tar all with the same brush – really do think that this macho option is a) the only way to get things done, and b) the best way.

Over recent months, too many Defence Analysis staffers have come across examples from the DPA, and even the Equipment Capability branch, who perceive their roles within individual procurement programmes, and the procurement system as a whole, as being one of battering industry into submission, come what may. One said over a pre-Christmas drink: “We’re going all out to nail BAES to the barn door over the carrier – it’ll give me so much satisfaction.” Now that’s a hard line position.

Another, on the topic of FRES, told a Defence Analysis writer, “My main job is to keep BAES out of the running for this programme.” On a third occasion, one expressed his view that Thales needed a going-over for the Watchkeeper programme, and on a fourth, a senior officer vented spleen in his view that all that industry ever tried to do was to “shaft the MoD.” So he was determined to get his retaliation in first.

It would be easy to write off these conversations as aberrations – but there are too many of them, across too many elements of MoD. Indeed, on a recent visit to the School of Infantry at Warminster in southern England many, if not most, young officers expressed opinions that industry is their enemy. Something is not right in the state of Denmark, one might say. But to repeat the basic question: does this confrontational, adversarial behaviour achieve anything apart from a temporary venting of anger? If those who see the pursuit of rigid competition at all costs could point to fundamental successes – cost savings, better equipment and so forth – then they might have a point.

Unfortunately, the more we look the more we see that the adversarial approach leads the other way – slower contract conclusion, more laboured development programmes and more frequent time and cost overruns. In which case, why on earth would anyone cheerfully espouse a way of doing business that can practically be proven to guarantee failure? Isn’t there a better way of doing things?

Well, the answer to the latter question is “Yes”. And as this is so, the answer to the former can only be, “God alone knows!” So, what is the secret of the procurement conundrum? Well, in the UK arena, it would be “partnering” – and this is also seemingly the case overseas too. The problem that arises when the issue of partnering in procurement is raised is an instant response containing phrases such as “cosy relationship”, “lack of competitive edge”, “can’t prove value for money.” These words are thrown back and forth with much abandon – but with little knowledge.

The arguments, coming from both the Ministry of Defence’s Main Building and parts of the Defence Procurement Agency, threw vast amounts of ordure at – primarily – BAE Systems, raising the Nimrod MRA4 and Astute SSN programmes as examples of just how awfully the company had performed. In fact, the notion that a ceasefire between BAES and MoD over public spats, which came into effect in the middle of last year, appeared to be totally off the card. But the situation with regard to the CV(F) programme and other big-ticket projects was one of open warfare.

Why, oh why on earth is this type of behaviour seen a) as suitable to defence procurement, and b) reasonable, and c) of any value whatsoever when it comes to the often vexed business of buying defence equipment? (Sorry, we are not going to fall for the “in” definition of “acquiring capability!”). Who actually believes that a pressure cooker, confrontational, adversarial style of doing procurement business achieves anything? The answer has to be that too many inside MoD Main Building, as well as in the DPA – though one mustn’t tar all with the same brush – really do think that this macho option is a) the only way to get things done, and b) the best way.

Over recent months, too many Defence Analysis staffers have come across examples from the DPA, and even the Equipment Capability branch, who perceive their roles within individual procurement programmes, and the procurement system as a whole, as being one of battering industry into submission, come what may. One said over a pre-Christmas drink: “We’re going all out to nail BAES to the barn door over the carrier – it’ll give me so much satisfaction.” Now that’s a hard line position.

Another, on the topic of FRES, told a Defence Analysis writer, “My main job is to keep BAES out of the running for this programme.” On a third occasion, one expressed his view that Thales needed a going-over for the Watchkeeper programme, and on a fourth, a senior officer vented spleen in his view that all that industry ever tried to do was to “shaft the MoD.” So he was determined to get his retaliation in first.

It would be easy to write off these conversations as aberrations – but there are too many of them, across too many elements of MoD. Indeed, on a recent visit to the School of Infantry at Warminster in southern England many, if not most, young officers expressed opinions that industry is their enemy. Something is not right in the state of Denmark, one might say. But to repeat the basic question: does this confrontational, adversarial behaviour achieve anything apart from a temporary venting of anger? If those who see the pursuit of rigid competition at all costs could point to fundamental successes – cost savings, better equipment and so forth – then they might have a point.

Unfortunately, the more we look the more we see that the adversarial approach leads the other way – slower contract conclusion, more laboured development programmes and more frequent time and cost overruns. In which case, why on earth would anyone cheerfully espouse a way of doing business that can practically be proven to guarantee failure? Isn’t there a better way of doing things?

Well, the answer to the latter question is “Yes”. And as this is so, the answer to the former can only be, “God alone knows!” So, what is the secret of the procurement conundrum? Well, in the UK arena, it would be “partnering” – and this is also seemingly the case overseas too. The problem that arises when the issue of partnering in procurement is raised is an instant response containing phrases such as “cosy relationship”, “lack of competitive edge”, “can’t prove value for money.” These words are thrown back and forth with much abandon – but with little knowledge.

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