U.K. To Reform Acquisition Management

LONDON — U.K. Defense Secretary Liam Fox has vowed to establish quarterly reviews of major acquisition efforts in a bid to stem perpetual cost overruns.

The Major Projects Board, to be headed by the state secretary, initially will scrutinize the top 20 projects and then expand that effort to the top 50. “Where projects are falling behind schedule or budget, we must take immediate remedial measures,” Fox says.

The measure is only one in a series of reforms the defense secretary unveiled Feb. 22. Another is trying to eliminate the gap between spending and budget plans by requiring any project, at its outset, to be able to show the funding has been set aside for development, production and deployment.

Fox complains of a “conspiracy of optimism” that has prevailed when “poor cost estimation and unrealistic timescales” were applied to programming.

In addition to requiring any future programs to have a sound financial baseline, Fox has asked the head of defense materiel, Bernard Gray, and undersecretary, Ursula Brennan, to review ongoing efforts.

Fox unveiled the measures on the same day Parliament’s committee of public accounts once again raised concerns about project management and the results of last year’s Strategic Defense and Security Review (SDSR).

Legislators want a report by the end of April to include “forecasts of the costs of implementing the SDSR, the status of contract cancellations and renegotiations, and how [the Defense Ministry] assessed the value for money of the decisions taken.” The latter refers to continued unease within some in Parliament about decisions made in the SDSR to scrap the Nimrod MRA4 maritime patrol aircraft and plans to retire, around 2015, the Sentinel R1 ground surveillance aircraft.

The committee also is urging the Defense Ministry to make some structural changes in how it manages programs. For instance, it wants to give project managers greater power and responsibility to implement a program, but also narrow their focus rather than spread management attention too thinly. Rotating personnel every two to three years, as is now the case, risks “eroding accountability,” the panel says.