Ministry warned to keep purchasing in its sights

29 November 2001
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29 November 2001 | Robin Parker

Procurement performance must be better monitored if future defence projects are to be completed on time and within budget, according to the government spending watchdog.

In its annual review, Ministry of Defence Major Projects 2001, the National Audit Office (NAO) found that the cost of the top 20 military equipment schemes fell for the second year running. This saved £283 million on 12 projects, offsetting increases of £183 million elsewhere.

Although 15 of the projects were approved prior to smart acquisition, a strategy launched in 1998 to buy military equipment "cheaper, faster and better", the NAO suggests that the MoD must prepare for next year, when 18 will have been subject to the new approach.

Performance measures for smart acquisition are currently assessed separately by other government organisations such as the Defence Procurement Agency, the Defence Logistics Organisation and the Equipment Capability Customer.

The NAO says the ministry must provide "whole-life cost" data to demonstrate the full impact of smart acquisition on equipment capability and project duration to reduce costs by £2 billion by 2008.

Edward Leigh MP, chairman of the committee of public accounts, told SM the ministry would have to ensure the progress so far was built on.

"Smart acquisition appears to have been a success, but in terms of future planning, there is still not enough being done," he said. "The MoD is in a transitional phase, and can't expect too much too soon."

Changes in procurement strategy also helped to deliver £118 million of the savings, for the delivery of multi-role armoured vehicles, with the Netherlands taking over a third of the UK's work on the project.


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