U.K. Reforms Defense Procurement ; Replaces Procurement Executive With New Agency
;Following the publication yesterday of the White Paper on Modernising Government, John Spellar, Defence Minister, today announced significant further progress in delivering on the Government's programme to Modernise Defence, announced in the Strategic Defence Review. John Spellar said: "The Defence Review identified better ways of buying and maintaining equipment, and supporting the Armed Forces. Overall, we spend some £9 billion a year on defence equipment, spares and stores. In the Review we launched the Smart Procurement Initiative to get better and cheaper equipment faster, and to work more effectively in partnership with industry, rather than the sterile confrontation of the past. It lies at the heart of our agenda to modernise Defence and the Armed Forces." He announced: The launch of the Defence Procurement Agency (DPA) on schedule for 1 April 1999, in place of the former Procurement Executive. The Agency, under its Chief Executive Sir Robert Walmsley, the Chief of Defence Procurement, will have a slimmed and radically changed top management structure which removes the previous hierarchies to place Integrated Project Teams (IPTs) centre stage in the DPA; The launch of the Defence Logistics Organisation (DLO) under the new Chief of Defence Logistics (CDL), General Sir Sam Cowan, on schedule for 1 April 1999. The DLO will be the largest Joint organisation in Defence, employing some 41,000 people, and brings together the three single Service logistics organisations. The DLO will become fully integrated by April 2000. It offers significant prospects for delivering an improved service to the front line at lower cost.
Mr Spellar, speaking alongside Sir Robert Walmsley and General Cowan, said: "They are both in the same business: improving support to the front line and getting best value for the taxpayer. To do this, they and their organisations have to work together very closely, to ensure that the full costs of buying and subsequently maintaining equipment are taken into account in procurement decisions. Integrated Project Teams are being set up to assist this close working. These will include staff from both the procurement and support organisations, as well as crucially from industry. We want to foster an enhanced partnership with industry, to reduce risk, encourage innovation and increase the competitiveness of defence industry, which generates £5 billion for the UK every year."
Sir Robert Walmsley said: "Smart Procurement is a real revolution in the way we set about our mission of equipping the Armed Forces. Central to the new arrangements will be the gathering into an Integrated Project Team of all the stake holders in a project, whether from the user, logistic, scientific, procurement or related industry communities. The IPT leader will have the responsibility and authority to deliver a project to its agreed performance, cost and timetable. Agency status will provide a unifying force, and indeed the energising force, to signal change and achieve faster, cheaper and better defence procurement."
General Cowan added: "The creation of a Chief of Defence Logistics and the launch of the Defence Logistics Organisation are changes of huge significance for defence. Since the end of the Cold War a great deal of rationalisation and efficiency has been delivered under the current single Service logistics structures but we have done all that can be done within the current context. To deliver greater value we must change the context and that is exactly what the Defence Logistics Organisation is intended to do. We have one huge incentive to succeed since the efficiencies we achieve will contribute directly to the modernisation plans of our forces."
Mr Spellar announced: - Promising initial results from the ten pilot IPTs, which had started to identify new savings running to several hundreds of millions of pounds over their life, and also significant improvement in the availability and serviceability of existing equipment for example, the Type 23 Frigate IPT is aiming to reduce the length of an upgrade programme by 30%; - The launch of a first formal wave of 23 IPTs very shortly after Easter, with other projects managed in the two organisations migrating to the IPT structure by April 2000. By then, there will be some 150 IPTs in all, around 90 in the DPA and 60 in the DLO.
Mr Spellar also announced progress on the MoD's Smart Construction Initiative. This is designed to improve the value for money obtained from the £1.5 billion spent annually on the MoD's built estate, through greater use of prime contracting and an improved relationship between MoD and the construction industry. Referring to the launch of two pilot projects at Aldershot and Wattisham, he announced plans for at least a further three pilot prime contracts during the coming year, and to establish IPTs to manage construction projects. Smart Construction would be driven forward by the Defence Agency concerned, which is being relaunched on 1st April 1999 as Defence Estates.
Mr Spellar said: "I cannot emphasise enough our determination, as the single largest customer for the UK construction industry, to play a key role in the Deputy Prime Minister's 'Rethinking Construction' initiative which seeks to reform the UK construction industry."
Background Notes : 1. The Modernising Government White Paper was launched by the Minister for the Cabinet Office on 30 March 1999. 2. The Defence Procurement Agency launches its web-site tomorrow (April 1) as part of the MoD Internet domain. The site will provide news and information on the new organisation, together with details and pictures of some of its many equipment projects. The site will also include useful information for companies which are doing or wish to do business with MoD including Guidelines for industry, Partnering Arrangements, Defence Forms and Standards. It will be found at http://www.mod.uk/dpa
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U.K. Reforms Defense Procurement ; Replaces Procurement Executive With New Agency
