MPs have set a deadline for the Ministry of Defence (MoD) to outline steps it has taken to improve contractor performance.
In a report the Public Accounts Committee (PAC) said of 32 top-priority programmes, timely delivery was considered a serious risk for one third and the most common causes of delays were late or faulty equipment delivered by suppliers.
The report comes as BAE Systems, a key defence supplier, announced its new smart factory would deploy automation, virtual and augmented reality, and 3D printing to produce the next generation combat aircraft Tempest.
Dave Holmes, manufacturing director for BAE Systems Air, said: “We’ve collaborated with the best of UK industry and academia to develop a cutting-edge facility that combines current and emerging technologies, ensuring the UK remains at the forefront of combat air technology development.”
BAE told the Financial Times it had set targets for 30% of components for the Tempest to be made with 3D printing and 50% of the aircraft to be assembled by robots.
“You may see traditional suppliers start to disappear,” Holmes said.
The aerospace industry has been hit hard by coronavirus, with Airbus announcing the loss of 15,000 jobs worldwide.
The PAC report, on the MoD’s defence capability and equipment plan, said the pandemic would “increase the widespread delays to deliveries of equipment and weaken the resilience of key suppliers”.
It said the MoD had been “paying significant sums to suppliers in advance of work done, which has been particularly valuable to suppliers where orders from private sector customers have dried up”.
“However, the department [MoD] is concerned about the financial resilience of some suppliers,” said the PAC.
The report said the government’s defence and security industrial strategy “offers the department an opportunity to reset the relationship with its key suppliers”.
“In return for commitments to support the defence industry as part of this strategy, it should set out its expectations of how the industry will improve its performance to address the endemic delivery and quality issues that afflict the sector.”
MPs said the MoD should set out in writing by the end of the year the steps it has taken to improve contractor performance.
The PAC reiterated concerns about the affordability of the MoD’s equipment plans and the lack of a plan to achieve a target of £4.7bn of efficiency savings.
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