Defence Procurement and Capabilities: How to Accelerate Military Development

I have just returned from Australia and have finished a projected annual publication embodying the year’s two seminars held by the Sir Richard Williams Foundation plus a wide range of interviews which I conducted around the two seminars.

As such, the volume provides an overview on the year concerning the evolution of Australian defence thinking and policy.

I come away from this year’s experience with a single thought: How will the ADF effectively transition from the force in being to one considered more capable for the direct defence of Australia and the deterrence of China?

And in that process, how will an acquisition system be transformed that can accelerate such a transition?

Part of the answer to the acquisition bit is provided by an assessment of the state of UK defence procurement provided by a recent UK Defence Committee report. When Bruce George was chairman of the committee from 1998 to 2005, I played a role as an advisor to the committee and was impressed with their efforts.

This report is quite comprehensive and impressive.

In reading the report, I would highlight a few comments that are most relevant to the Australian situation.

The first is simply the impact of delayed procurement on effective transition.

This is what the report said: “Delayed procurement brings operational consequences. New equipment is usually a replacement or enhancement of in-service equipment. As such, there is a winding down and reallocation of personnel and training as the Service prepares for the expected arrival of new equipment.

“Air Chief Marshal Sir Stephen Hillier, former Chief of the Air Staff, explained: ‘If it then happens that the new capability gets delayed, you are not going to be able to reconstitute that existing capability. You now have either a capability gap or less capability than you need. That is a serious problem, particularly when you are heavily engaged in operations at the time. It also costs, because you are running on that old equipment and all the contracts and support for it are due to run out, so you have to go back to suppliers and ask to keep it going. That results in unexpected costs along the way. At times it is not good for morale, because people want this new capability and equipment, and that causes frustration in their minds as well.”

The second was simply to recognize that long term procurement was almost beside the point with the pressures of the current strategic situation.

The report put it this way: “the UK must now be prepared for what the strategists sometimes call a ‘come as you are war’ and have an effective procurement system to match. This is the crucial, wider context within which this Report has been produced.”

The third was that urgent procurements delivered capabilities; normal procurement practices were simply too slow.

The report noted: “It is a fascinating and repeated theme in the Civil Service that when faced with an emergency they are sometimes able to devise mechanisms for addressing the crisis. However, rather than develop these as advances to change the system and to spread best practice the tendency is to revert to the previous failed practice.”

The report contrasted “exquisite procurement” to the speed with which the operational forces need to get actual operational capabilities.

The report underscored the problem in this way: ‘Exquisite procurement’ is the enemy of speed and time. Over-specifying a piece of equipment creates delays and budget pressures. Exquisite procurement also generally leads to greater cost and therefore less mass. For the most part, exquisite procurement should be avoided. Instead, The Front Line Commands and DE&S should aim for a ‘spiral development’ model as a default. This should be enforced through the Joint Requirements Oversight Committee, the Investment Approvals Committee, and ultimately, Ministers.

“Key trade offs between capability, cost, time, and technical complexity should be made much earlier in the procurement process, when requirements are initially being set. As in the French system, DE&S should be involved at the outset of formulating requirements and disputes should be resolved, if necessary, by Ministers.

“The current procurement system does not place sufficient emphasis on the value of time. Indeed, as the Permanent Under Secretary (PUS) himself said in summarising the problems with the system: “we should place more value on time and less on money, so [on] the pace of decision-making and pace of delivery.”We strongly concur with PUS’ emphasis on the value of time.

“The Ministry of Defence must develop a much greater sense of urgency in its procurement methodologies. At present, the system is far too ponderous and bureaucratic. There must be a much greater emphasis and value on time. The Ministry of Defence should make greater use of the Urgent Capability Requirements (UCR) method in getting the UK Armed Forces prepared for the immediate future and potential near-term conflicts with peer adversaries.

“The Ministry of Defence, the Front Line Commands—and DE&S in particular—should adopt a ‘UCR mindset’ which seeks to deliver equipment with much less bureaucracy in a far timelier manner and with a greater emphasis on early operational benefit.

“In the longer term, the Ministry of Defence and DE&S should also review whether the standard processes avoided by use of the UCR method could be removed altogether from all defence procurements.”

And then finally, the report highlighted one of their critical points which certainly the United States has forgotten. You need to put key players in place to manage a critical capability and give them the ability to be held responsible for delivering that capability. Certainly, the U.S. would not have nuclear submarines or Aegis ships in a timely manner if such a system was not followed.

This is how the report put this core need: “Senior Responsible Owners (SROs) are a critical part of a successful programme. Their knowledge of a programme and the relationships they build theoretically enable issues to be resolved sooner and more effectively. Crucially, via their formal letters of appointment, SROs are accountable to Parliament, including its specialist Committees, such as Defence and Public Accounts, for the successful delivery of the programme in their charge. However, the turnover and frequent ‘multiple hatting’ of SROs can negatively impacts their programmes.

“The Ministry of Defence should endeavour to keep SROs in post for a minimum of five years to ensure continuity. Whilst it may not be possible to mandate the length of the position, the Ministry of Defence should provide incentives to reward length of service e.g. through renumeration packages and subsequent promotion. The Ministry of Defence should also ensure that SROs for category A programmes (i.e. those over £400 million) should have 100% of their time doing that specific job, as opposed to balancing a number of programmes or other roles in one appointment.

“In addition, in order to better align accountability (including to Parliament) with responsibility, SROs, who are often at one or two star level, should be able to exercise direct access to the CEO of DE&S (and if necessary to the Minister for Defence Procurement) in the event of a programme for which they are responsible experiencing serious difficulties, which they are unable to resolve on their own.

“Procurement is seen as a step down within many of the Services. Leaving to work in ‘Main Building’ or ‘Head Office’ is seen to be leaving the ‘warrior race’. The Ministry of Defence should develop a professional career path within the military that enables Officers to specialise in procurement, as a dedicated cadre, at a much earlier stage of their career. If the Ministry of Defence is unable to ensure that military personnel are forthcoming to take on SRO roles, it should consider the greater use of civilian SROs in the long term.”

Personally, I think this report is a contribution to AUKUS, and has key recommendations which both the United States and Australia need to take onboard.

 The report can be read here:

https://committees.parliament.uk/publications/40939/documents/199440/default/