Major projects report 2019: is the government on the right track to boost military capacity?
All this week, CSW brings you a snapshot of progress on the Government Major Project Portfolio across four categories: military capability, information and communications technology, infrastructure and construction, and transformation and service delivery. First up, this section looks at three MoD projects to boost military capability
31 projects | £138bn whole life cost
1 Red | 8 Amber/Red | 16 Amber | 3 Amber/Green | 3 Exempt
The element of the GMPP with the longest lead-in time – 15 years – the military capability category is focused on providing new equipment and technology for the armed forces, with all projects led by the Ministry of Defence.
The longevity of the area is illustrated by the fact that 14 of the 28 military capability projects that were part of the GMPP in 2012-13 still remain on the GMPP in 2018-19. And while it has the second lowest number of schemes of the four GMPP categories – at 31, it has only four more projects than the ICT category – it has second highest whole-life cost, at £138bn. This is nearly 14 times more than the cost of the ICT schemes.
All but one of military schemes rated red in 2018 have improved this year. The Protector programme to deliver a remotely-piloted air system moved from red to amber-red, while a further two – the design, development and manufacture of Astute class submarines and the core production capability programme to deliver nuclear reactors for the Royal Navy – moved to amber. The Marshall programme, intended to deliver sustainable air traffic management capability, saw the biggest improvement, improving from red to amber-green in a year, .
Data on three projects is exempt on national security grounds: the Joint Crypt Key Programme to improve the MoD's information security, the Nuclear Warhead Capability Sustainment Programme, and development of the Type 31e warships programme.
Clyde Infrastructure Programme | Ministry of Defence | Whole life cost £1.7bn (All figures IPA data, unless otherwise stated)
This is one of the MoD’s newer projects, having only been established in 2015, but it has a huge challenge to meet. The programme is charged with redeveloping HM Naval Base Clyde to enable it to become home to the UK’s entire submarine fleet.
Its aims include providing “infrastructure that is fit for purpose” to enable the UK’s Trident nuclear deterrent to function until at least 2067, as well as “the establishment of a submarine centre of specialisation from 2020”.
The scope includes all capital infrastructure projects at the Faslane nuclear base and the armaments depot at Coulport.
These range from docking facilities and weapons processing to protecting the sites, providing submarine training, roads and living accommodation.
Last year VolkerStevin, Kier Graham Defence and Morgan Sindall were announced as the key contractors on the project.
The MoD’s commentary on the IPA data says: “Infrastructure on track to be delivered within the whole life cost budget over the duration of the Clyde Infrastructure Programme.”
MoD permanent secretary Sir Stephen Lovegrove, in a letter to Public Accounts Committee chair Meg Hillier in January, said that despite being “challenging”, the programme was “assessed as deliverable with the incremental delivery of benefits occurring as new or upgraded facilities are completed”.
He added: “The programme is currently transitioning from the delivery of new build infrastructure facilities, to a greater emphasis on the more challenging refurbishment and midlife refit of existing operational facilities.”
Some £227m has so far been spent on the project, which has an end date of March 2024.
Trevor Taylor, professorial research fellow at think tank the Royal United Services Institute, cautions that costs could spiral due to circumstances outside the MoD’s control, such as changes in the regulations governing nuclear safety.
“The regulatory side of nuclear infrastructure programmes has caused issues before at Devonport, and there are some suspicions that the Faslane infrastructure needs to catch up from a period of relative neglect,” he tells CSW.
The decision to concentrate Britain’s entire submarine force on the Clyde “makes a lot of sense at both the military and economic levels” according to Chris Bellamy, professor emeritus of maritime security at the University of Greenwich.
“However, there is one wild – or not-so-wild – card,” he adds. “What happens if Scotland becomes independent? I suspect what we might see is the remainder of the UK leasing the Clyde submarine bases from Scotland, much as the Russians leased Sevastopol from Ukraine until they took the peninsula over.” Jonathan Owen
Project Marshall | Ministry of Defence | Whole life cost £1.8bn
Concerns over the decrepit state of defence air-traffic infrastructure led to the Joint Military Air Traffic Services project, which began in 2006.
An assessment phase was approved in 2008 and completed the following year.
The project is ambitious in its scale and scope, seeking to create a defence air-traffic system that is fit for purpose, including the replacement of obsolete equipment.
In 2010 it was renamed Project Marshall and the following year a tender for the contract was issued. This was awarded to Aquila Air Traffic Management Services – a joint venture between National Air Traffic Services and Thales – in 2014.
Around 80 contracts have been merged into one service contract and the project is tasked with providing air-traffic management services at more than 100 locations in the UK and overseas, including 65 airfields. It is also investing in advanced equipment and infrastructure to replace ageing radars and control centres.
Progress has been patchy. The project was rated red last year, indicating the difficulties it was in.
The IPA’s 2018 report revealed that it had missed its initial operating capability milestone. The project had to seek re-approval from the Investment Appraisals Committee and planned to “reset the contractual baseline to a taut, realistic and deliverable schedule.”
The end point is now 2024, four years later than previously envisaged.
Earlier this year it emerged that there had been clashes between the MoD and Aquila over the project. Gemserv, a professional services firm, stated: “To prevent project failure, we were appointed by Aquila to undertake a fundamental review in order to turn the project around and successfully deliver the intended benefits whilst avoiding any costly and potentially public dispute.”
Fundamental changes were made to the project plan, including the reprioritisation of “key and non-dependent deliverables to meet deadlines,” according to the company.
The project has made significant progress over the past year, reflected in its rating improving from red to amber/green, and this summer it was expected to mark a major milestone.
The departmental narrative on the IPA data says the project “is scheduled to deliver initial operating capacity two months and full operational capacity 18-24 months ahead of our approval dates (30 June 2019 and 31 December 2024 respectively).”
At the time of writing the MoD was unable to confirm whether the 2019 milestone had been reached.
Trevor Taylor, professorial research fellow at RUSI, says: “The integration of dozens of contracts, information systems, technologies and geographic locations was never going to be an easy ask and real risk was and is unavoidable.” JO
Armoured Infantry 2026 | Ministry of Defence | Whole life cost £1.5bn (MoD equipment plan)
This is a project that has been rated red – which means that successful delivery appears to be unachievable – for the past two years.
It aims to “deliver an armoured infantry that is more capable, with significantly enhanced lethality, upgraded situational awareness, better integration with dismounts and improved combined arms cooperation”, according to the IPA’s project profile.
The project is the latest umbrella for the long-running Warrior Capability Sustainment Programme, announced in 2009.
In 2011 Lockheed Martin was awarded a development contract to provide new Warrior infantry fighting vehicles for the Army, with an expected in-service date of November 2018.
The contract was reset in March 2014 in an attempt to ensure that the new vehicles would be in service by 2020.
But continued problems in testing and development have resulted in the timescale and costs increasing further.
The project is now running at least three years late, with costs having increased by £227m. This means that the initial whole life cost of £1.3bn is currently projected to rise to more than £1.5bn, according to the 2018 defence equipment plan.
“Value for money is yet to be indisputably proven given that the demonstration phase is not yet complete” Sir Stephen Lovegrove on Armoured Infantry
In a letter to Meg Hiller, chair of the Public Accounts Committee, earlier this year, MoD permanent secretary Sir Stephen Lovegrove admitted the project is “not achievable within the original 2011 parameters”.
However, he added: “Early difficulties in the demonstration phase are now being overcome. A major contract renegotiation in 2017 re-baselined the programme and it has since been robustly managed to prevent further cost growth and ensure the prime contractor meets its obligations.”
By June this year, trials of test vehicles “should have proved that the design is safe, reliable and meets the department’s requirement, leading to the start of manufacture negotiations and subsequently a further submission to commit to manufacture in early 2020,” Lovegrove said.
“Value for money is yet to be indisputably proven given that the demonstration phase is not yet complete nor a manufacture deal agreed,” he added.
It will not be until next year at the earliest that the MoD will be in a position to consider ordering upgrades needed to extend the life of Warrior vehicles due to come to the end of their service life in six years’ time.
RUSI’s Trevor Taylor comments: “There seem to be technical issues here and also questions of whether it is worthwhile to spend on an old chassis in the numbers involved.” JO
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