Amended copy: Independent Review of Defence Acquisition Published
(Source: UK Ministry of Defence; issued Oct. 15, 2009)
An independent review into the way the MoD buys equipment for Britain’s Armed Forces has been published today.

Last year, the previous Defence Secretary commissioned Bernard Gray to assess what steps the department was making to reform its procurement process and suggest further recommendations for how it can be improved.

Since then, a review team led by Mr Gray has met with MoD officials, representatives from the Defence Industry and other organisations to obtain a clear picture of the way the Department purchases and delivers equipment.

His findings, which are published today, identify a number of areas where the acquisition process could be improved. The MoD accepts the report’s two main themes: a need to bring equipment plans into line with likely available resources; and a need to improve equipment programme planning, management and delivery.

The report also acknowledges that all countries struggle with the complex challenges of defence procurement and some are envious of the UK’s achievements. It recognises the dedication of those involved in Defence acquisition, the MOD’s longstanding commitment to reform and the significant progress made to date.

Welcoming the report, Lord Drayson, Minister for Strategic Defence Acquisition Reform, said:

“Bernard and his team have done a thorough job. They have done a comprehensive review of defence acquisition and have come up with a strong package of measures to ensure the right equipment is delivered in the most efficient way. Quite simply, we accept most of his recommendations and are getting on with implementing them alongside broader work to develop a future strategy for Defence Acquisition, which will ensure we deliver as effectively as possible the equipment the Armed Forces need.”

Mr Gray has agreed to participate in this process and work with the MoD to develop an overall Strategy for Acquisition Reform to be published in the New Year.

Commenting on his report, Mr Gray said:

“I am very pleased that the Ministry of Defence has welcomed the review team’s conclusions. The department has accepted the need for change, and it is now moving quickly to implement the majority of the report’s recommendations.

“I am continuing to work with the MoD on many aspects of the acquisition process, including implementation of agreed reforms, and in defining the way forward in areas where firm conclusions have yet to be reached.

“There is still a significant way to go to finish this work, and many difficult decisions lie ahead. Nevertheless, the MoD has made a very positive start, and I am sure that the department is determined to drive through this important work.”


BACKGROUND NOTE:
The Bernard Gray Review of Defence Acquisition was commissioned by former Defence Secretary John Hutton.


Click here for the Review of Acquisition report by Bernard Gray (299 pages in PDF format, 5.4 MB) on the MoD website.

Click here for the Written Ministerial Statement (3 pages in PDF format)
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Bernard Gray Report - UK Defence Industry Comment
(Source: Defence Industries Council; issued Oct. 15, 2009)
The Defence Industries Council today (Thursday) commented on the publication of the Bernard Gray report by Secretary of State for Defence Bob Ainsworth.

The UK defence industry welcomes the publication of the report and the Government statements, and is strongly behind initiatives to reform defence procurement.

However, it also notes the issues around budgets, delays and cost over-runs. In the industry's view these are caused by pressure on defence budgets from central Government. Despite the National Audit Office finding that 75 per cent of defence projects are on time and on budget as the Ministry of Defence's (MoD) budget is squeezed it has to delay projects and this also increases their costs.

The DIC report that examines procurement reform as one of four key recommendations is available at http://tinyurl.com/2009dic.

Ian Godden, Secretary to the DIC and Chairman of ADS - the UK's Aerospace, Defence and Security trade organisation, said:

"We welcome the report's publication and the Government statements and believe that the industry has an important role to play in further improving defence procurement. Indeed only recently the Defence Industries Council produced a report which emphasised the need for procurement reform. However, it should not be forgotten that Britain already has the most efficient defence procurement systems in the world relative to the USA and Europe. The National Audit Office confirmed that 75 per cent of projects are on time and on budget.

"It must also be recognised that the mismatch between funding commitments and programmes causes the MoD to delay projects to meet year-on-year budget targets. This practice significantly increases the life time costs of programmes. Short-term budget constraints are outside the control of the MoD and have been perpetuated into the long-term until we arrive at the situation that we have today.

"Once this budgetary issue is addressed, through a fully-funded Strategic Defence Review that has an emphasis on both procurement reform and wealth creation, defence can be a major contributor to the UK's economic recovery. The top 15 UK-based defence companies alone provide £35bn per year to the UK economy and defence produced an average of £5bn per year in exports.

"Our industry exists to equip and supply the UK's armed forces with the best possible equipment and support. At present we have 4,000 industry personnel supporting our troops in Afghanistan. We therefore look forward to providing further ideas to Government about it can achieve its aims in partnership with the industry."

To illustrate the current squeeze on the defence budget the Treasury's figures for spending as a percentage of GDP since 1987-8 to date for Health, Education and Defence can be found at http://is.gd/4kFii.

The industry also believes that if the actions to reform the procurement process are taken quickly and rigorously - and are combined with three other actions – the security as well as the prosperity of our nation will be enhanced.

The other three initiatives should be:

1. A renewed effort and focus on defence exports to ensure that the UK has sufficient volume of activity to be able to produce the high-quality equipment that the country needs and maintain global competitiveness.

2. A reversal of cutbacks in the MoD Research and Technology budget, which has been severely reduced in the last three years by 24%. This is cutting the seed corn for our future equipment that the Armed Forces will need.

3. A renewed and funded Defence Industrial Strategy as part of the Strategic Defence Review, which will ensure the UK-based industry can provide the right equipment for our Armed Forces when they need it and so that the industry remains competitive for the future to continue to support the UK Armed Forces in this way for the long-term.


The Defence Industries Council works to promote the interests of the defence sector and raise wider awareness of defence industrial issues. The UK Armed Forces' ability to respond quickly to emerging operational threats depends on its national technology and industrial base. The UK defence industrial base produces world class equipment and is internationally competitive but its continued health is dependent on the relationship with Government as its primary customer and regulator. Today's investment in defence technology provides the capabilities our Armed Forces need for the future and enriches the national industrial and technology base for the benefit of the entire economy.

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