The UK's defence procurement practices have again been criticised, following the release of the National Audit Office's (NAO) annual report into its top 20 contracted programmes last week. Covering around two-thirds of the UK Defence Procurement Agency's (DPA) annual spend, the top 20 contracts cover 10 aerospace programmes, including for the BAE Systems Nimrod MRA4, Eurofighter Typhoon and Lockheed Martin F-35 Joint Strike Fighter.
In total, the UK's major programmes suffered a £1.7 billion ($3.1 billion) cost increase within the past year, and slipped further behind schedule by an average of three months. In all, the programmes are expected to total £50 billion, £6 billion over budget. While noting that the 2004 performance marked an improvement over a 2003 cost overrun of £3.1 billion, a senior Ministry of Defence official says: "It's an improvement, but it's still not good enough." In response, the DPA says it expects the improvement to continue.
The cost of the Nimrod MRA4 programme rose by over £400 million in 2004, with the MoD attributing this jump to a firming up of cost overrun estimates announced last year. Spending on the JSF rose by over £370 million, with the extra funds assigned to additional risk-reduction activities (£87 million) and increased cost estimates. The UK has, meanwhile, removed a requirement to clear the aircraft for the external carriage of weapons including the ASRAAM, Brimstone and Paveway II/III to increase commonality with US aircraft.
The cost of the UK's involvement in the Airbus Military A400M transport project also increased by £220 million in 2004, with almost all this sum attributed to the effects of exchange rate movements.
The DPA says it favours the introduction of more incremental contracts, rather than "big-bang" development and production deals. Craig Hoyle / London
CRAIG HOYLE / LONDON
Source: Flight International
