UK Procurement System: "So Where Did It All Go Wrong?"

There is growing belief across a wide swathe of the UK defence industry, as well as other companies trying to sell into the UK defence market, that all is not well with the Ministry of Defence's procurement process. Although some can point to specific problems or issues, of much concern is the sense of despair and despondency that pervades the corridors of both MoD's Main Building and the Defence Procurement Agency's (DPA) headquarters at Abbey Wood.

Now, perceptions can often be aligned 180 degrees from reality. But it isn't just industry that is concerned – it is increasingly armed services personnel, including those with access to data. And the core of the problem appears to be the leadership – of the procurement process. Perhaps more to the point, it is the lack of discernible leadership that concerns most.

The feelings of both industrialists and senior forces figures are given weight by the perception – as ever, perceptions are almost more important than realities – that programmes are not being progressed, are being stretched out, shunted to the right or thinned out – conjure up whatever phrase is deemed best to describe the situation. In last month's edition, Defence Analysis examined many of the reasons why these problems are occurring, and a deeper analysis of the UK's Equipment Programme (EP) is contained elsewhere in this current edition.

There is certainly some tangible evidence that at MoD's top levels there is such lack of leadership and that there has been drift in the procurement system for many months, if not years. Says who? Says the "2004-06 Ministry of Defence Performance Partnership Agreement", drawn up, presumably, at the start of the 2004-05 budget year so now slightly over a year old. Just consider the following targets and actions that the 18-page document lists on the subject of procurement:

"Reinvigorating Smart Acquisition in the Defence Procurement Agency through CDP's Stocktake Programme, stronger leadership at the Centre, and a better balanced forward equipment programme."

"By Nov 04: Stronger leadership at departmental level: establish an Acquisition Policy Board (chaired by PUS) at official level."

Is it going too far to take these and suggest the following?

• "Reinvigorating" the procurement process suggests that it is enfeebled and not firing on all cylinders.

• "Stronger leadership at the Centre" suggests that such leadership that exists is not up to the task in one way or another.

• "Stronger leadership at departmental level" supports the opinion that something is lacking at the departmental level or, one would assume, at MoD's Main Building rather than at the DPA. This would be a "first" for the DPA not being regarded as a major part of the problem!

But one can then bury one's head in one's hands in despair at the end of the second quote. Unless Defence Analysis reads this very differently from anyone else, then this suggests that to provide leadership for the procurement system, a new committee – the Acquisition Policy Board – would provide oomph where it has been lacking to date. A committee providing leadership? Which bright spark thought this one up?

Furthermore, why is there a need for a new committee to provide leadership for procurement? Isn't there already a Defence Management Board (DMB)? Let's look at the DMB's website to discover what its stated roles are:

• "Targets and Objectives – establishing the key priorities and defence capabilities necessary to deliver the strategy."

• "Resource Allocation – ensuring that defence priorities and task are appropriately resourced."

• "Performance Management – managing corporate performance and resources in-year to deliver the required results."

"Closer alignment of strategic objectives and resource allocation, greater rigour in addressing the resource challenge, and greater clarity about how it is to be addressed."

• "The Board's Values. The DMB is determined to provide clear executive leadership to the department."

• "Clear Direction, strong leadership. We will give clear direction and strong leadership. Our priority is always to maximise our defence capability and our contribution to peace and security. We will not be deflected in this by demands of vested interests. We will not duck difficult issues."

What in the above listed mission statements and goals does not lead one to believe that if there is a crisis of leadership in procurement, then the DMB has been part of the problem? Indeed, if what one hears around the pastel-toned relaxation areas of MoD's newly-refurbished Main Building is true, then the DMB has not done much of a job in dealing with vested interests in procurement, and has ducked more than its fair share of difficult procurement issues.

Wasn't there an earlier move at the core of Smart Procurement, which begat Smart Acquisition, to improve what might be termed "leadership" in procurement? Does anyone recall creation of the famed "Customer One", the Director of Equipment Capability, a new post entrusted to a Deputy Chief of the Defence Staff at three star level, to provide the rank and authority for leadership of the procurement process against entrenched service rivalries.

Well, "Customer One" is still there, with a series of Directors of Equipment Capability beneath him. Any doubts over the role of the DCDS (Equipment Capability) should be readily dispelled by the description from the Acquisition Management System website:

"The Equipment Capability Customer is responsible for developing and managing a balanced and affordable equipment programme to meet the current and future needs of the Armed Forces."

Seems pretty easy to understand, doesn't it? The guy who works out what is needed and ensures its affordability is the DCDS (EC). So, if there are any thorny capability trade-offs – at the core of the new procurement system – then the in tray in which they are placed would be that of Customer One.

And as he is responsible for a balanced, affordable equipment programme, he can say "keep this, trim that, cut that." Does he do so? Because if he doesn't, then under Smart Acquisition who else is supposed to? Of course, the Chief of Defence Procurement might well have a role – the previous incumbent, Sir Robert Walmsley, was certainly active in this respect.

DUPLICATION, TRIPLICATION …

So there is at least one committee and two individuals who "own" procurement and its successful delivery – and there could be even more in a more liberal analysis. So is this the problem: that despite efforts to give ownership of procurement – to mirror that given to the Chief of Defence Logistics in logistics matters – there still is no clear process owner? Or is it that despite attempts to provide single points of responsibility for procurement and its implementation, too many people do not want to stick their heads above the parapet in the face of assured hostile fire?

The objective here is not – absolutely not – to point fingers and apportion blame. But let's go back to the fact that it has been decided that the procurement system isn't working as it should, and that there is a lack of leadership. One would have thought that in the military as a whole, the Army especially, a key part of officer training is the art of leadership.

So how come the procurement system, after so much tinkering and input from management consultants at a cost of many millions of pounds, is still regarded as virtually rudderless? In which case, where is the man who will stand up, turn to his troops, and say, "Follow me!"? Stagnation and management drift in the procurement system will not save money, nor will it supply war winning equipment and capabilities for Britain's armed forces. So why not try decisive action? Who knows – it might actually work ….

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