Supplementary memorandum from the Ministry
of Defence following evidence session with Minister for Defence
Procurement (30 May 2002)
The Committee would like to have a note on what
is involved in "reliability centred maintenance" and
"underwater engineering" techniques, and some examples
of the sorts of saving in refit frequency or duration these make
1.1 Reliability Centred Maintenance (RCM)
is based upon a thorough analysis of the design, function and
operational criticality of warship systems and equipments, which
identifies more precisely the required maintenance. It also defines
more accurately the frequency of maintenance. This process involves
full recognition of all safety requirements and operational usage.
1.2 RCM is expected to be a marked improvement
over earlier maintenance management systems that use set intervals
and general overhaul instructions, irrespective of the in-service
function of the equipment. It is particularly appropriate to ship-borne
equipment, where similar components can be used in either a primary
or auxiliary role. Throughout the life of a warship, RCM has the
potential both to improve flexibility in the timing of when maintenance
is undertaken and to provide a reduction of about 10 per cent
in the overall volume of the maintenance required.
1.3 Underwater Engineering (UWE) allows
a wide range of maintenance activities to be undertaken afloat
that previously have only been possible with a vessel dry-docked.
1.4 For example, with a vessel afloat, using
UWE techniques it is possible to survey and repair the underwater
hull structure and its paintwork system and to examine and repair
external equipment fitted below the water-line. Typically this
includes items such as propellers, rudders, stabilisers, the sonar
fairing, and hull valves.
1.5 With planned dry-dock maintenance activity
now programmed at intervals of about 4 to 5 years, a prime benefit
from using well-developed underwater engineering techniques, is
to avoid the high cost and operational disruption caused by having
to undertake an unplanned docking in order to rectify an unexpected
1.6 Each year on average, across the Fleet,
there is a need to conduct repairs that would require about 20
unplanned dockings. However, using these valuable UWE techniques
annual savings on dock charges of up to £1.5 million can
The Committee would like to have a note setting
out the process followed by MoD in developing the Warship Support
Modernisation Initiative partnering arrangement, the basis for
the in-house benchmark used to evaluate it, how the new prospective
contracts compare against the benchmark, and the conclusions and
recommendations of reviews undertaken by the NAO and any other
external advisers [Q97-98]. The Committee would like to see a
copy of the NAO's report, or if the MoD were to decline to provide
it a detailed summary of its conclusions and recommendations.
2.1 The Warship Support Modernisation Initiative
process, in which both Industry and the Trades Unions were involved
from the outset, had three main stages.
2.2 The first of these, the scoping stage,
from June 2000 to January 2001, examined the potential for savings
in the Dockyard warship repair programme and Naval Base operating
costs. Scoping proposals were received from the three companies
(BRDL at the Clyde, Devonport Management Limited at Devonport
and Fleet Support Limited at Portsmouth) and the MoD Trades Unions,
which identified the possibility of achieving considerable savings.
Subsequently, Memoranda of Understanding were signed with each
company to develop their proposals to a level of maturity against
which contracts could be let. The Trades Unions were also invited
to develop their own proposals further.
2.3 During the second stage, output specifications
describing the services provided by the Naval Bases were developed,
together with a `Benchmark' as a means of measuring value for
money and to support the negotiations. Initial proposals were
received from the companies and the Trades Unions in April-May
2001 for comparison with the Benchmark. At this point only a summary
of the financial savings offered by the Naval Bases' component
of the Benchmark at each location were released to the relevant
company, however, the full details of the Naval Bases' component
were released to the Trades Unions. The output specifications
and draft contract terms and conditions were issued, in the form
of a `Request for Proposals', in early July 2001 and the companies
were given the descriptions of the efficiency measures in the
Benchmark, but not their individual values.
2.4 In the third stage, in response to the
Request for Proposals, the Companies and Trades Unions submitted
their final proposals in September 2001. These were compared to
the Benchmark in a full investment appraisal in accordance with
Departmental and Treasury guidelines. A post tender clarification
process was conducted on both the Company's and TU's proposals.
A final release of the detail of the Benchmark was provided to
the companies at this stage to inform the final negotiations and
achieve best value for money. The Trades Unions had used the Benchmark
as the main source of their costed efficiency proposals. The companies
adopted proposals from the Benchmark that they were prepared to
commit to delivering.
2.5 The Benchmark incorporated in-house
savings proposals offered by the Naval Base Commanders assuming
that the operation of the Naval Base would continue to be managed
by the Department, and the savings from the changes to the dockyard
programme that could be achieved without partnering.
2.6 The company proposals offered additional
value for money over the first five years significantly in excess
of the Benchmark and the Trades Unions proposals. Release of the
companies' figures at this stage could prejudice the Department's
2.7 The Warship Support Modernisation process
was subjected to both internal and external audit. As part of
this, in his role of chairman of the agency audit board, the Non
Executive Director of the Warship Support Agency commissioned
the National Audit Office to carry out an assurance audit of the
process in a constancy role. This should not be confused with
a value for money audit carried out by the NAO on behalf of Parliament.
As such this assurance report constitutes internal advice to the
MoD and is not for publication. However, a short summary report
of the WSM process has been agreed with the NAO and a copy of
this is at Annex A.
When, for each of the three dockyards, in turn,
had the allocated surface ship refit programme been due to end,
and when (again for each dockyard) will they now end under the
terms of the WSM arrangements? What are the MoD's estimates for
the percentage of surface ship refits exposed to competition:
currently; at the time the allocated surface refit programme comes
to an end under the terms of the WSM initiative and (also at that
date) if WSM were not to proceed [Q99, 101]
3.1 The dates for the programmes at the
three locations are as follows:
3.2 Prior to WSM the allocated surface ship
upkeep programme was planned to end in 2001-02. Additionally,
the Docking Periods (DP) of all surface ships based at Devonport
were allocated. Under the terms of the WSM agreement the last
allocated surface ship upkeep completes in 2002-03. After this
all the docking periods for surface ships based at Devonport will
also be competed in the unallocated programme.
3.3 Prior to WSM the allocated major warship
and escort upkeep programme was planned to complete in 2004-05.
Allocated minor warship Repair Periods were also allocated at
Rosyth until the completion of the last vessel in 2007-08. Post
implementation of WSM, the Rosyth allocated ship-work programme
ends during 2004-05.
3.4 Prior to the WSM initiative all Docking
Periods at Portsmouth in the 15-year programme were allocated.
Post WSM, the allocated ship-work programme at Portsmouth ends
in 2004-05. No surface ship Repair Periods were included in the
allocated programme at Portsmouth prior to WSM nor will they be
3.5 The estimated percentage of refit work
exposed to competition is as follows:
|Assuming WSM proceeds||53 per cent
||51 per cent||69 per cent
||93 per cent|
|Assuming WSM does not proceed||52 per cent
||44 per cent||41 per cent
||61 per cent|
How does the £327 million anticipated saving from the
WSM initiative break down between:
(a) Devonport, Portsmouth and Rosyth/Faslane/Coulport?
(b) Naval base and dockyard work at each location [Q131,
Against the same benchmark used to calculate the £327
million, what is the MoD's estimate of the savings that the trade
unions' proposals would have produced? What constraints were there
in adopting the trades unions' proposal?
4.1 The analysis estimated that the overall savings offered
by the Warship Support Modernisation Initiative relative to the
baseline are £327 million over the first 5 years and some
£48 million per year thereafter. The savings in the first
5 years are roughly evenly divided between the dockyard programme
and the Naval Bases. The split between the Naval Bases cannot
be disclosed at this stage as it could prejudice the Department's
negotiations. The Dockyard savings are not all location dependent
and therefore cannot be separated as requested. The continuing
savings are entirely attributed to the Naval Bases, since the
programme of work allocated in support of the privatisation would
have, in any case, terminated at the end of the 5 year period.
4.2 The Trades Unions proposals offered a marginal additional
value for money related to the Benchmark. The Trades Unions have
asked that their detailed proposals should not be released.
4.3 The Trades Unions proposal was considered as a full
option in its own right and treated in the same way as the companies'
proposals with no particular constraints on adopting them if they
proved to be the best value for money. Overall, the companies'
proposals were assessed to offer better value for money than the
TU proposals over the first five years and beyond.
The Committee would like a note on the Professor Pascale's
background, the remit of his review, and the emerging conclusions
and recommendations of his study [Q157].
5.1 Richard Tanner Pascale, an American citizen, is an
associate fellow of Templeton College, Oxford University and is
a business consultant and author. He has worked with many corporations.
Those listed on his curriculum vitae include AT&T, General
Electric, the New York Times, Marriot, BP, and Intel. As
an author, Richard Pascale has written books on business change
and related management issues. The most recent was "Surfing
the Edge of Chaos: The laws of nature and the new laws of business"
which was published in 2000.
5.2 Richard Pascale was engaged by the Department in
February 2002 to conduct an `audit' of the MoD's Equipment Capability
Customer (ECC) organisation to establish what had been accomplished
(against the background of the ECC's initial charter) and what
is left to be done. The audit, will inter alia, assess
how successful the ECC's change to a capability management based
organisation has been, taking account of the views of key MoD
5.3 The audit is not due to complete until mid June 2002.
It is therefore still too soon to comment on what findings and
recommendations are likely to emerge from Richard Pascale's work.
What modifications and other improvements are to be made to
the Type 42 destroyers to improve their anti-air warfare capability,
which ships will be involved and when will the improvements be
carried out [Q192, 205]?
6.1 A number of programmes are in progress that will
improve the Type 42 destroyers' anti-air warfare (AAW) capability.
The improvements can be grouped into three categories; situational
awareness, hardkill capability, and softkill measures.
6.2 Improving a ship's situational awareness means providing
a more accurate and reliable recognised maritime picture. With
an accurate and up-to-date picture the commander will be able
to direct his or her assets more efficiently, and engage the enemy
more effectively. In the AAW environment, improved situational
awareness is provided by upgrading the ship's command system,
introducing Identification Friend or Foe (IFF) tracking, introduction
of the Command Support System (CSS), and improvements to the ship's
6.3 The Type 42 command system upgrade, ADAWS20, will
be completed this year, having been incorporated into eight batch
two and three ships. It will improve situational awareness through
greater capacity, added redundancy and improved data link functionality
(including provision for Link 16).
6.4 IFF tracking will again be fitted to the eight batch
two and three ships and will facilitate fully automatic tracking
of contacts, based on their IFF codes, out to around 250-300nm.
It will also provide the ability to interrogate all modes of civilian
and military IFF concurrently. With an In Service Date (ISD) of
September 2004 this will allow the commander to build an accurate
"air picture" giving early indication of potentially
6.5 The CSS, which has recently been introduced to all
Type 42s, delivers networked AAW planning. It displays around
the Operations Room the Wide Area Picture, fusing together inputs
from a variety of sources, including intelligence, thereby enabling
better cueing of hardkill and softkill systems against potential
6.6 Improvements to Radar Type 996 will provide more
accurate and robust Target Information to Sea Dart, along with
improved spatial awareness by replacement of some existing components
with software based technology. This in turn will improve radar
performance in a number of areas, including the littoral; hot
climates; against supersonic sea skimming and supersonic high
diving targets. And, through greater range and bearing accuracy
it will facilitate improved discrimination for detection of smaller
targets. The approved In Service Date for this Automatic Software
Adaptive Radar (ASAR) enhancement is 2005, and it will be fitted
to the eight batch two and three ships mentioned above. Finally,
improvements to the Type 42's long range radar (Radar type 1022)
will increase performance in both the littoral and hot climates,
as well as ameliorating some of the effects of anomalous propagation
(where atmospheric conditions affect radar performance). This
Solid State Receiver enhancement package has a planned ISD of
2005, and will be fitted to the same eight batch two and three
6.7 With the number of situational awareness enhancements
proposed the commander will have a significantly enhanced AAW
picture, and will be able to utilise his or her AAW hardkill assets
6.8 In the AAW environment, hardkill is defined as the
ability to engage a target through physical interception, resulting
in target's destruction (or inability to complete the mission).
This is achieved through the use of missiles and gun systems.
The Type 42's primary AAW missile system is the Sea Dart system.
The most recent improvement of the Sea Dart system, which is currently
in service with all ships, is the Automatic Target Indication
(ATI) modification. This allows the combat system to prioritise
the threat posed by incoming targets, automatically assign a fire
control radar, load and allocate the launcher, and conduct an
engagement based on that order. Functionality ranges from fully
automatic to fully manual, and this has the ability to considerably
shorten ships' reaction times. Improvements to the Sea Dart missile
are also being made by upgrading the missile's fuse to an Infra
Red version. This modification replaces the current fuse type
in the missile with one that is triggered by the heat source from
a threat platform, whether that is a missile or aircraft. This
in turn increases the probability of a kill against modern sea
skimming threats, whilst retaining the original capability against
higher altitude targets.
6.9 Should a threat missile penetrate the ships' hardkill
systems, softkill or decoy systems are used to distract or seduce
the incoming missile away from the ship. A new softkill system,
the Offboard Active Decoy (DLH), is due in service by December
2003. It is a rocket propelled round that is automatically programmed,
and fired, by the ship's combat system when an incoming missile
seeker head is detected. When fired, it travels to a predetermined
height and distance from the ship before activating, with the
result that the threat missile is seduced away from the target
ship. It will provide a significant improvement in platform self
defence capability. DLH will be fitted to all Type 42s.
6.10 Softkill efficiency has also recently been increased
with the introduction of Electronic Warfare outfit UCB into all
eight batch two and three ships. This equipment provides better
situational awareness to the Electronic Warfare Director, enabling
him to prioritise and cue softkill defence systems.
What would be the main technical risks involved in upgrading
the Sea Harrier for continued carrier operations [Q221]?
7.1 The current engine of the Sea Harrier does not provide
adequate thrust to enable operations to be conducted year around
in hot climates, such as those encountered in the Gulf. There
would be a very high level of technical risk in fitting new engines,
since the Sea Harrier was not designed to take the more powerful
engine which is being fitted to some of the Harrier GR9s. (The
Sea Harrier is an early generation Harrier Isimilar to
the RAF's previous Harrier GR3swhilst the only Harriers
operating world-wide with the upgraded engines are the extensively
modified Harrier IIs, such as Harrier GR7-9s). Specifically, the
main technical risks are associated with the extensive airframe
modifications that would be required and the adverse effects on
the engine due to different intakes.
Q7 (a) What constraints (technical, cost and timelines)
would there be on fitting the Blue Vixen radar and AMRAAM missile
onto the GR Harriers [Q395]?
7.2 While it would be technically possible to adapt the
Harrier GR to have a greater air defence capability, the primary
capability requirement is for offensive air power.
7.3 Fitting the Blue Vixen radar and AMRAAM missiles
to the Harrier GR would have to be preceded by a lengthy period
of design and development work. Only once this work was completed
would it be possible to initiate any installation programme. It
is likely that the integration programme would involve significant
modifications to the forward fuselage structure in order that
existing capability (such as the Forward Looking Infra Red, Angle
Rate Bombing System, and ZEUS electronic warfare equipment) could
be relocated. Additionally, the electrical and avionic cooling
systems, and cockpit displays of the Harrier GR would need to
be enhanced. A trials period would then follow to develop and
test the new capability, before it could be employed operationally.
This work would be in addition to the existing and extensive Harrier
GR7 to GR9 upgrade programme. In addition, there are insufficient
Blue Vixen radars to fit the full Harrier GR9/9a fleet.
7.4 Since it would be inefficient and expensive to conduct
a comprehensive upgrade (GR7 to GR9) only to dismantle the aircraft
again soon after, (to install the Blue Vixen radar and AMRAAM
missiles), it is likely that the GR9 upgrade programme would have
to be postponed considerably until a joint GR9 and Blue Vixen/AMRAAM
programme could be developed. However, this would leave important
Harrier obsolescence issues unaddressed in the meantime. In addition,
any delay to the GR9 programme would not only delay the introduction
of smart weapons to the frontline aircraft of Joint Force Harrier,
but would also call into question the overall cost effectiveness
and practicality of any form of significant upgrade, given the
Harrier's OSD of 2015. In terms of timescale, a GR9 Blue Vixen/AMRAAM
programme would be at least as complex as the Sea Harrier Blue
Vixen/AMRAAM update in the mid-90s. This took five to six years
to embody after completion of the design and development phase.
Q7 (b) What are the factors that would limit the useful
employment of the Sea Harrier after 2006?
7.5 Sea Harrier is optimised to provide air defence of
the fleet. It has a limited capacity for carrying ground attack
weapons and no forward looking infra red sensor for identifying
ground targets. Ground attack is now envisaged as the main purpose
of the Royal Navy's carrier force.
What arrangements are being put into the FSTA PFI contract,
and other PFIs more generally, to allow the mix of sponsored reserve
and contractor staff to be adjusted during the life of the PFI
8.1 There is no "mix" of sponsored reserve
and contractor staff, as all sponsored reserves will be drawn
from the contractor's workforce. The FSTA contract, which has
not yet been finalised, will include a mechanism to adjust that
proportion of the contractor's workforce that we require to hold
a Sponsored Reserve commitment. The contract is expected to include
a requirement for the MoD and the contractor to review all manning
and personnel issues. The contract will contain provisions to
ensure that any agreed changes are implemented in accordance with
a timetable agreed by both parties.
8.2 All PFI contracts, whether they involve Sponsored
Reserves or not, contain a change mechanism which allow elements
of the contract to be varied in agreement between the parties.
In regard to the Airfield Support Services Project, what is
the MoD's latest thinking on the possible use of sponsored reserves
and/or "contractors on deployed operations" arrangements
for when airfield fire services would be required at overseas
9.1 Contractors on Deployed Operations (CONDO) and Sponsored
Reserves (SRs) are two separate concepts. CONDO personnel are
civilian contractors and are not reservists. SRs, while acting
as normal contractors' personnel in normal circumstances can be
called-up as reservists to undertake their duties close to the
front line in times of crisis. CONDO describes arrangements under
which civilian contract staff could deploy into safer environments
such as long-standing deployments in friendly countries. The two
concepts are not alternatives, but separate instruments suited
to different circumstances.
9.2 Regarding the Airfield Support Services Project (ASSP),
three consortia were invited to submit bids by 30 April 2002.
Each of the three submitted their bid by the due date and the
bid evaluation process is now in its early stages. The Invitations
to Negotiate (ITN) sought proposals for the employment and use
of SRs, in order to assess if SRs could improve value for money
without placing operational capability at risk. As the cost effectiveness
of SRs for ASSP has yet to be established, bidders were asked
to price options with varying numbers of SRs, from a bare minimum
to 25 per cent. Proposals utilising more than 25 per cent could
be submitted if the bidders assessed this to be worthwhile. Under
the SR options, some of the contractor's personnel would have
a reservist commitment and during times of crisis would effectively
become Service personnel, able to deploy on ASSP tasks in military
areas when required. This does not, however, include fire fighting,
which, for deployed operations, would normally be covered by RAF
Personnel would still form the core of support to overseas operations.
9.3 Although not specifically addressed in the ITN, the
bidding Consortia could make innovative proposals for the use
of CONDO to augment the SRs concept.
Q9 (a) The Committee would like also to have a note
on the key features of the Contractors on Deployed Operations
arrangements more generally, including the pros and cons relative
to the use of sponsored reserves.
9.4 General CONDO support ranges from ad hoc contracting
for limited deployed support to broad, enabling commercial support
contracts having theatre or global application. CONDO does not
replace core military manpower but augments it when circumstances
permit to reduce the pressure on the deployable logistic support
of the Armed Forces. CONDO personnel would normally only be deployed
to benign environments (although our arrangements provide for
CONDO to be deployed outside benign areas in circumstances where
no military capability exists or where a previously benign area
becomes non-benign as an operation develops). Decisions would
depend on the operational situation and the availability of military
9.5 All contractors deployed on operations would be responsible
to the Theatre Commander for the successful execution of the contract.
A joint MoD/industry Code of Conduct sets out the obligations
and rights of CONDO personnel and MoD's authority over those deployed
and the protection their CONDO status would bring them. Before
deployment, CONDO personnel may be required to undertake a brief
package of training and medical and dental checks. MoD may provide
deployed contractors' personnel with emergency health treatment
and primary health care as well as other welfare facilities. As
a recognised element of the deployed force, CONDO personnel would
have Prisoner of War status under the Geneva Convention III, Article
4.a(4) provided they were correctly identified and badged by the
MoD. CONDO employees are subject to some provisions of Military
Law when deployed. The local military commander may discipline
an employee, or if more appropriate, require the contractor to
take administrative action.
9.6 SRs are different from CONDO personnel in a number
of important ways. The key characteristics of SRs are as follows:
they are members of the Reserve Forces with liabilities
under Part V of the Reserve Forces Act 1996 (RFA96) to serve as
reservists, to be called out into permanent military service and
to train for that service in peacetime;
they are, when called out, uniformed members of
the Armed Forces fully subject to Service Discipline Acts and
integrated into the chain of military command;
their peacetime training has equipped them to
deliver a service, as an integral part of an armed force, in a
potentially hostile operational environment; and,
as a member of the Armed Forces, they may undertake
weapon training in peacetime, bear arms on operations and undertake
duties deemed to be combatant under International Law.
9.7 SRs may provide support services in environments
and under circumstances where it would be inappropriate or unlawful
to employ civilians under CONDO arrangements. Any one of the following
is likely to rule out the use of CONDO:
the operational environment is non-benign (subject
to the criteria in 9.4 above);
the required support could be judged as being
combatant in nature;
there is a need for personnel to bear arms for
either their own protection or the protection of others and/or
personnel in theatre should be fully subject to
the Service Discipline Acts and, for their own protection or otherwise,
fully integrated into the chain of command; and
it is necessary for personnel providing support
to undertake additional military duties as well as those duties
directly associated with the primary support for which they are
9.8 An additional important factor in judging the relative
merits of contracting for CONDO or SR support is the degree to
which delivery of the required capability must be guaranteed.
SRs are, under RFA96, subject to legally binding liabilities to
serve and be called out for service irrespective of the dangers
such service might put in the individual's way. In the face of
potential danger, CONDO personnel may legitimately decline to
9.9 If these factors do not rule out the use of CONDO,
the following commercial considerations must be taken into account:
the requirement for employees to undertake training
in peacetime will come at a price which, in the case of SR military
training, may be higher than that required to be given to CONDO
SR personnel will need to be materially equipped
to be service personnel;
SR civilian employers will generally have to pay
SR employees more, as an incentive to maintain sufficient numbers
of SRs in their workforce;
recruiting and employing SRs may incur higher
administrative and overhead costs than CONDO, for example personnel
insurance, for the contractor.
9.10 In general the training, investment and planning
required make the use of SRs economic only for long term contracted
support associated with particular equipments or services.
9.11 Whilst SR and CONDO are different that does not
prevent SR personnel being deployed in a purely civilian capacity
under CONDO arrangements should it be safe to do so and the operational
situation permits it. There may therefore be advantages in some
CONDO arrangements if some contractor personnel are engaged as
SRs. These personnel could be called out and deploy early as service
personnel to prepare the ground for follow-on purely CONDO support
when the situation in theatre can be judged as sufficiently benign.
Conversely, if support is deployed under CONDO arrangements and
some of the CONDO employees are also SRs, then should the situation
deteriorate, those employees could be called into military service
to remain in theatre to facilitate a change to the alternative
military provision of support.
What guidance have Ministers given to MOD officials about what
areas of defence activity they would regard as jeopardising operational
effectiveness or should otherwise be regarded as "inappropriate"
for PFIs? What criteria are used to assess the value for money
of prospective PFIs [Q354]?
10.1 The use of PFI is considered on a case-by-case basis.
Ministerial guidance is that PFI should be used only where it
is appropriate, workable and economic. Detailed criteria have
been developed in order to assess these objectives, one of which
is operational effectiveness. In respect of operational effectiveness,
issues such as operational flexibility and loss of core skills
will be taken into account. This work is done in the feasibility
stage and can even result in projects that "do not move"
being rejected for PFI because of the unacceptable operational
impact if that project were to be PFI.
10.2 The scrutiny and approvals process also tests the
value for money of each project. A key element of this is to compare
commercial bids against the most cost effective conventional means
of delivering the service (the public sector comparator (PSC)).
The PSC, however, is not the sole means of determining value for
money. Other factors, particularly the quality of services, are
also taken into account as part of the assessment and appraisal
What is the current annual aggregate service charge for the
MoD's current PFIs? And what does the MoD expect the total figure
to be if all the PFIs currently in the pipeline were to be implemented
11.1 MoD, like all other Departments, makes a biannual
report to Parliament, one of which informs the Financial Statement
and Budget Report exercise, showing future payment commitments
for signed PFI deals and those that are at or due to move to preferred
bidder status. In the MoD these categories currently relate to
50 projects. The last report, in Spring this year, showed that
annual commitments peak in 2007-08 at £835 million, or around
3.5 per cent of the Defence budget. We are looking at more than
40 further potential PFI projects, including some very large ones,
for example the Future Strategic Tanker Aircraft, Airfield Support
Services and Project Aquatrine. Should all of the projects currently
under consideration materialise as PFI deals, the total annual
commitment could double. But some projects are at an early stage
and the requirements have yet to be fully developed and as a result
the potential annual costs have yet to be fully identified. Some
of the projects now being considered may not lead to a PFI deal.
It would therefore be wrong to give a precise figure on our forecast
future commitment. We do of course keep the potential future PFI
commitment, and its implications for future financial planning,
What improvements are involved in the £26 million modification
programme for the GR series Harriers [Q377]?
12.1 The GR9/T12 programme will provide avionics and
weapons upgrades to give the aircraft a much improved capability,
in particular the ability to deliver the new generation of smart
weapons that are about to enter service. These will include the
Brimstone anti-armour weapon and a Precision Guided Bomb.
12.2 The overall cost of the GR9 and T12 (trainer variant)
programme is approximately £330 million, of which 75 per
cent is related to routine maintenance and modification work being
undertaken concurrently with a capability upgrade programme to
minimise costs. The remaining 25 per cent comes from reallocation
of funding from discontinued Harrier programmes, together with
the quoted £26 million, generated as a result of the Joint
Force Harrier Balance of Investment work.
On Nimrod MRA4, what additional costs will be incurred by the
MoD as a result of the delays with the project, including any
cost consequences of the delays arising (and in prospect) since
the contract was renegotiated in May 1999?
13.1 Full cost of ownership data is not yet available
for the MRA4. But the DPA judges that the cost of running on MR2
aircraft pending the delayed introduction into service of the
MRA4 is broadly similar to the running costs of the latter. Additional
costs will therefore be minimal, as indicated in MPR 2001.
Q13 (a) If BAE Systems were able to sell its Nimrod
MRA4 solution to satisfy the DoD's Multi-mission Aircraft requirement,
what share would the MoD receive of any revenues achieved?
13.2 The Nimrod MRA4 contract contains a standard MoD
Commercial Exploitation agreement. In respect of a sale of significant
value this provides for MoD to receive a share of the profit generated.
The agreement contains provisions for abatement of the share for
those items where MoD has not funded the design (eg of a proprietary
nature) and other factors. The MoD share to be negotiated cannot
therefore be expressed as a simple percentage nor calculated precisely
without full detail of the product design which may finally be
offered to the DoD.
Q14. What is the result of the MoD's review of its ammunition
war stock holding requirements [Q436]?
14.1 The stockpile planning review looked at the total
requirement for munitions calculated to ensure the successful
outcome of the most demanding scenario for each environment. These
revised Stockpile Liabilities are effective from 2005 which will
enable shortfalls and surpluses to be addressed in the interim
period. Where a shortfall between the current stockpile and the
2005 liability has been identified, funding is being sought, and
in some instances has already been secured, to improve the position
and detailed procurement studies have commenced. For those munitions
where there is now an identified surplus, phased disposals have
been planned and are being executed.
14.2 This work has included a fundamental review of MoD
planning methodology in respect of munitions. Previously each
operational environment historically relied on single-Service
documents to define operational munitions scales. These scales
were not related to specific scenarios and were set so as to be
sufficient to provide for a wide range of contingencies. This
resulted in an adequate capability across the Defence environment
but did not provide for a wide range of contingencies. This resulted
in an adequate capability across the Defence environment but did
not provide best value for money.
14.3 The Strategic Defence Review (SDR) introduced the
concept of graduated readiness to provide forces for military
operations at an appropriate Scale of Effort. The various planning
assumptions associated with these concepts are incorporated in
the Defence Strategic Plan (DSP), which is subject to periodic
review. This has enabled the Department to ensure that best use
is made of limited resources and that stocks of munitions are
based upon a suitable balance of capability, risk and cost to
provide a coherent and balanced solution to the operational need.
14.4 Stockpile planning work is continuing. It will ensure
that munitions liabilities remain in step with strategic planning
assumptions and operational priorities.
Q14. (cont) In which areas (if any) does the MoD not hold
ammunitions in the quantities set by its war stocking requirements?
14.5 In general terms, the UK armed forces do have the
munitions available to support current and future operational
requirements. Some specific areas, which remain high priority
for further action or investigation, are set out below.
There are 650 RAF firefighters, forming their own trade group,
based predominantly at RAF stations. They form the pool from which
firefighting teams for deployed operations will be drawn. Back