Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 180 - 187)



  180. They are very different. In one case it is an interesting method of planning your system that you can only have a system which makes the weapon system effective and usable if you get within a certain budget level. The other one says to me that paragraph 3.14 was never true in truth. One of those two is incorrect.
  (Sir Robert Walmsley) The contract position is that until we actually settle the contract price we did not know whether we were going to come in on, below or indeed above the budget.

  181. The implications of it if you were above?
  (Sir Robert Walmsley) I should have had to go on to speak to Admiral Blackham and tell him I had a problem about signing the contract and ask for his reaction to the amount I am above.

  182. A yawning chasm between the two positions. However, I have got the point. I understand that. My other question relates to something completely different and has not come up today at all. Your approach, if I understand it correctly—and please correct me if I have got this wrong—to the Type 45 is more modular than it has been to previous weapon systems. Am I right in that respect that you are effectively waiting to some extent to pick up the best technology available at the relevant time? Is that correct?
  (Sir Robert Walmsley) This time it is a planned and a policy decision. It has always happened in my experience anyway. This time we are planning for it.

  183. One of the points which has come up today related to a previous attempt to put together two modules, which was the radar. As you pointed out quite rightly, the shipborne air conditioning was insufficiently reliable, put high humidity air through the radar system and effectively destroyed it completely through the wave guides. One of the problems we see all the time is that when these modules do not work together you then end up presumably with a dispute with the contractor. You may not be able to answer this question today, in which case I am very happy for you to come back and answer it on Wednesday. You have effectively the Type 45 contract, as I understand it, arbitrated under British law. The PAAM system is a Franco-Italian system.
  (Sir Robert Walmsley) I like to think of it as a UK-Franco-Italian system.

  184. Which legal system would that contract be arbitrated under?
  (Sir Robert Walmsley) French

  185. So you are going to have two systems which are supposed to work together, one arbitrated under British law and one arbitrated under French law. When they do not work together and it is not clear which half of that module is the problem, how are you going to resolve that?
  (Sir Robert Walmsley) We carry the risk.

  186. You carry the risk.
  (Sir Robert Walmsley) We do. It is a fundamental flaw in Government furnished equipment. What I would say is that at least PAAMS, the missile system being procured under French law, is a whole system. It is required to deliver system performance, it is required to conform to all the interface specifications which were agreed with the ship project. So this is not something which will happen by accident. We have gone through it in enormous detail, but if we are wrong about an interface specification . . .

  187. You can feel a careful note being taken, can you not Sir Robert?
  (Sir Robert Walmsley) I certainly can and if you think this has not worried me for years . . . Well I am sure you recognise it has worried me.

  Chairman: Gentlemen, thank you very much. We are going into closed session now and we shall see you again on Wednesday.

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