The very long cycle times for major equipment procurements encourage maximum technical "stretch" (i.e., big leap development) to try to ensure that a platform or system will be as capable as possible when delivered many years in the future. Technical stretch on major defence equipments has a long and well documented history of correlation with large cost and time overruns. Estimating what the project should cost and how long it should take becomes harder the further it moves from actual experience of similar projects.
In addition to misestimating the "should cost" levels, if the domain experience of customer and supplier are lacking, compared to what might be considered adequate for the technical sophistication of the task, it is likely that project performance will deteriorate further. Issues of project performance are examined in more detail in Chapter 7.
In addition to the risk of overruns in time and cost associated with "big leap" projects, this approach to acquisition also tends to encourage incremental "improvements" to projects that are underway. These arise from a combination of:
• changes or developments in technology, which are very likely over the long cycle time of a major project. To not continuously upgrade the in-progress project risks delivering brand new, but outdated equipment; and
• issues that arise from the interaction of the project with other acquisition activity, such as requirements to retrofit systems to be compatible with other newer capabilities.
There is widespread recognition of this "big leap" problem both within the Department and in other countries' defence procurement efforts in spite of efforts being to move to more incremental approaches.
Regular and smaller step changes in equipment capability are recognised in the AOF57 as an alternative approach to managing technology development and rapid delivery, but there is limited evidence that such alternative approaches are used to any great extent. Incremental acquisition is recommended for programmes where full funding is not immediately available (or a limited initial delivery is mandated), or where time to delivery is short. Given the nature of the MoD approvals process, and the way in which delays are routinely introduced in order to meet cost and/or performance needs, and that in competition for scare resources in an overheated EP, a promise of a 'better tomorrow' is not attractive to the military customer, it would seem that incremental acquisition does not offer many advantages from a programme management point of view under current arrangements. This being the case, project teams have little to gain by promising such an approach.
In a further twist of entry-ism, Service chiefs know that a consequence of the overheated EPP is that, if they do not get approval for the full range of capabilities at the outset, then funding is unlikely to be available for upgrades at a later stage. As a result, sensible developments such as spiral development and technology insertion are heavily discouraged.
Spiral development has been the "preferred" acquisition strategy in the DoD since 200058. The latest defence procurement reforms passed by Congress in May 2009 demand requirements to be structured in a way that will allow for incremental, evolutionary or spiral development. Further to this, the recent Defence acquisition review conducted in Australia by Mortimer59 proposes that "off the shelf" becomes the default option for military equipment purchases.
In a rapidly changing world, greater acquisition agility through reducing acquisition cycle times is critical in delivering greater responsiveness to the needs of the FLCs. It allows for a more flexible equipment programme and more effective exploitation of technological developments.
The need reduce acquisition cycle times has been widely identified over the past ten years. Smart Procurement originally intended to reduce the average cycle time by 30-45% (from over 20 years at the time to 11-14 years). More recently, the Defence Acquisition Change Programme recognised the need to reduce cycle times, although in 2008 the DACP programme board decided not to launch a further top-level change programme to specifically address this objective.
A further concern around equipment specification is lack of consideration of exportability in capability specification. This is often a direct consequence of the Department specifying bespoke or highly-specific equipment which is ideal from its perspective, but is not competitive in the export market. Although downstream exports of capabilities developed for UK use generally do not directly impact the initial cost to the Department, they are a very important component of reducing the cost to the UK of sustaining defence industrial partners, and defraying development costs for new capabilities.
In contrast the French DGA has export as one of its three key objectives ("Missions"). This and international cooperation are explicit political tools for promoting political and industrial interests, as well as practical ways of defraying cost on major projects.
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57 "Selection of the most appropriate acquisition lifecycle strategy (traditional / incremental / evolutionary / hybrid) is a key factor in determining the long-term success of a military capability and providing the required capability to the user when it is needed" – AOF (Jul 2008)
58 DoD Directive 5000.1, The Defense Acquisition System' (Oct 2000)
59 'Going to the next level', D. Mortimer, (2008)