MoD projects are late and over budget

12 December 2002
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12 December 2002 | Robin Parker

Most big defence projects take too long or cost too much, despite the introduction of more efficient procurement processes, the National Audit Office (NAO) has warned.

Seven of the 10 biggest “smart procurement” projects are late or over budget, according to the NAO’s annual Ministry of Defence Major Projects report.

The policy was introduced in 1998 to get the Ministry of Defence (MoD) to buy equipment “cheaper, faster and better” and these are the first such projects to come under scrutiny.

The report considers the MoD’s 30 biggest projects, worth £45 billion, 20 of which have come through their initial assessments.

The NAO says problems occur because cost and time variations are often late considerations in the procurement cycle.

The report says: “The challenge for the department, and smart acquisition, will be to break this mould and to improve the management of projects to cost and time.”

The most problematic project was the Airbus A400M military transport aircraft, a pan-European project that is now 16 months behind schedule, largely from changes in Germany’s requirements.

The criticisms came as the MoD rejected Liberal Democrat claims that it scrapped a supplies database that cost £120 million more than planned.

The Defence Stores Management Solution, which aimed to unite the three defence forces’ systems and save £650 million in a decade, was put on hold last year while the MoD determines its long-term affordability.

The MoD said it had spent £140 million on the project to date, in line with its planned budget over the first two years.

SMdec2002

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