Memorandum from BAE Systems concerning
Royal Ordnance Defence propellant procurement strategy (21 July
Further to your letter of 30 June, I now attach
for the Committee's consideration, a paper from BAE SYSTEMS RO
Defence setting out its propellant procurement strategy and commenting
on the document submitted by Mr Jack Dromey on behalf of the Bishopton
If the Committee would like further amplification
of points in the submission, please let me know.
This paper has been prepared in response to
the letter dated 30 June 2000 from Simon Flander, Audit Adviser
to the Committee.
RO Defence are able to give assurance to the
HCDC that we are totally committed to ensuring that the British
Armed Forces are supplied only with products and materials which
conform to the highest standard and which fully comply with the
stringent safety requirements demanded by the Ministry of Defence.
The Company is equally committed to ensuring that products and
materials are supplied in a timely manner to support the introduction
of new products into service and to provide on-going and continued
security of supply for as long as the items are required by the
We also wish to confirm that we have carried
out a professional, logical and auditable supplier selection process
to ensure that the requirements and demands of the Ministry of
Defence are fully satisfied. We have used the selection process
which was described to the HCDC in the spring of 1999, and this
is summarised below.
1. Conducted a full market survey of propellant
2. On the basis of a paper study of products
and capability, short-listed to five companies.
3. Carried out a detailed review of those
companies by visiting them, interviewing personnel, examining
technical, manufacturing and commercial capabilities and prices
for a basket of propellants. The assessment criteria were as follows:
Engineering resource, skills and knowledge; Intellectual Property,
Investment; Security of Supply; Capacity; Commercial Responsiveness;
Logistics and Flexibility.
4. Carried out a further down-select to
three companies who were asked to provide best and final offers
for specific items.
5. This group down-selected to two companies,
who were invited to detailed commercial discussions on their willingness
to enter into a long-term supply agreement and to commit to the
principles of the Partnering Agreement between RO Defence and
the Ministry of Defence. In addition, we have had detailed discussions
to ensure the influence which RO Defence would have in the future
strategy of that company and to guarantee access to future propellants
6. Currently in the final stages of negotiation
with our preferred supplier, which is a long-established, competent
manufacturer of Gun Propellants.
7. Initial samples of material had been
obtained prior to completion of the down-selection process, but
these had been manufactured without the technical assistance of
RO Defence. Since down-selection, RO Defence has provided direct
technical support to the chosen supplier to ensure that all requirements,
whether included in technical specifications or not, are clearly
communicated and understood.
1. Identified potential suppliers and assessed
equipment and capabilities.
2. Down-selected to two companies on the
basis of those which had the equipment or capabilities to meet
RO Defence requirements.
3. Companies supplied representative sample
4. Structured qualification programme will
involve motor charges from both those suppliers.
The processes employed by RO Defence in qualifying
and certifying the materials are consistent with Company policy
and the principles of the Ordnance Safety Group specialist advisers
regarding Safety and Suitability in Service to the Ministry of
Defence. These processes require an iterative approach to characterise
fully the materials, an understanding of the risks involved and
a plan to manage those risks. An integral part of this methodology
is the design of a development programme which takes account of
the iterative nature of the trials required when new materials
or technologies are included, a full and accurate record of the
conduct of all trials and trials results as well as the creation
and maintenance of a risk register, which ranks those characteristics
in the programme which could threaten success and details the
actions necessary to manage the associated risk. This methodology
enables us to demonstrate unequivocally the thoroughness of the
programme and the robustness of our conclusions.
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