There is a widespread perception in industry and within DE&S that the Department is unwilling / unable to offer appropriate financial incentives to attract, retain and incentivise skilled personnel of a calibre commensurate with the scale and complexity of the projects which DE&S is tasked to deliver. As a result the skill levels and qualifications held by project staff are often surprisingly limited, given the projects that they are managing. In some instances, project delivery staff themselves also reported that they felt inadequately prepared for the role they had been assigned.
These problems are exacerbated by the current rotation system for military personnel and civil servants, which has created a situation where mobility is prized / required, and tenure is short. Frequent changes of roles render it very difficult for staff to build up the range of relevant skills or develop deep expertise in relevant areas. Skill areas in which DE&S staff and others voiced concerns include:
• project management;
• legal; and
• commercial, including contract structuring and negotiation.
Some interviewees also suggested DE&S often showed poor understanding of / responsiveness to industry requirements.
A key concern of the Review team is the proportion of military personnel within the DE&S organisation tasked with complex project delivery. There is no doubt that the acquisition process is informed by military personnel embedded in DE&S, specifically contributing to the delivery of equipment fit for military requirements. However, currently around 25%100 of staff in DE&S COO's area are military personnel, many of whom have not previously had experience of, or demonstrated aptitude for, procurement of significant capital equipments. This scale of involvement by military personnel, combined with the mandated rotation of these personnel, is highly likely to result in skill shortfalls.
The Review has also heard in discussions (with both DE&S staff and industry) that DE&S is too often ill equipped to lead commercial negotiations, feeling "outgunned" and "under-experienced" in comparison to industry partners. Also, the Department often fails to cross-pollinate key learnings from one negotiation to the next (e.g., through use of a subset of the same personnel, close communication, actively seeking advice).
The development of more effective commercial relationships between the Department and Industry, initially envisaged as part of Smart Procurement reform in 1998 and subsequently repeatedly reinforced in other reports and initiatives, has clearly had some positive impact in guiding the Department's relationships with industry. However, the Review has also found it equally clear that DE&S / the Department is not yet perceived as a savvy, commercial operator in its dealings with industry and is unable to derive the benefits commensurate with this.
In a June 2008 review of attempts to improve the relationship between the MoD and its suppliers, the OGC concluded101 that the success of the reforms had been undermined by two factors: senior MoD executives' variable levels of engagement; and a failure to "consistently capture the benefit delivered. The report also raised a concern that the improvements did not flow down to key elements of the supply chain.
Whilst positive change to commercial arrangements proceeded most obviously under the banner of FFB, and continues to be developed under initiatives for the new Commercial Services Directorate, it is notable that the problem has proven intractable for the last decade and several organisational structures and may require more fundamental review of the organisation and incentives in order to attract, retain and then organically develop commercial skills of a calibre commensurate with the scale, complexity and importance of the projects which the Department handles.
DE&S operates using business reviews of a standard format, and the recent introduction of Programme Boards (under the broader banner of TLCM) may serve to standardise some processes and tools. Additionally, some common management information systems are well used (e.g., CMIS database, PB&F accounting system).
However, it was notable the systems and methods used to produce inputs to these high level reporting systems were different at IPT level, and invisible to the DE&S corporate centre.
The usefulness of a number of the high level systems was limited (e.g., for UORs where data reliability within CMIS is reported to be poor). The causes noted were lack of timely reporting of information or lack of useful standardised reports at an IPT level.
Any further development of management information systems should endeavour to:
• seek to develop standardised reporting tools around best current practices, to maximise the usefulness of the tool;
• mitigate the level of duplicate data entry required to minimise reporting burden and ensure consistency between data sets (i.e., enter once, use multiple); and
• maintain flexibility such that new reports / tools can be developed to support one-off analyses and new ways of working.
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100 1,888 of 7,887 as at AP11 2008/09
101 Procurement Capability Review Programme - Ministry of Defence', OGC (Jun 08)