The UK Parliament's influential Public Accounts Committee (PAC)has blasted the Ministry of Defence's management of major procurements and warned that the department will need to demonstrate clearly the delivery of promised savings from acquisition reforms.
The PAC's comments are based on its review of the UK National Audit Office's (NAO) Major Projects Report 1998, and showed the overspend on the 25 programmes to 31 March 1998 was £2.8 billion ($4.1 billion) while on average the projected start of deliveries is 43 months late. The NAO's 1999 report, published earlier this year, shows a small dip in cost overruns but an increase in delays.
PAC chairman David Davis MP, says the MoD will have to demonstrate that its "Smart Procurement" initiative is achieving the £2 billion savings to which it has publicly committed. He adds: "The MoD's track record in procuring equipment to time and cost is absymal. We have been hearing for a long time that Smart Procurement will lead to dramatic improvements. My committee will expect clear evidence the potential savings publicised are actually achieved."
Armed forces minister John Spellar says the changes means the MoD is seeing improvements while there has also been a positive impact on the department's relationship with industry.
Spellar says this has led to cost savings on some programmes, including £60 million from a follow-on buy of Matra BAe Dynamics Rapier surface-to-air missiles.
Source: Flight International