• It is not clear that the MoD initiatives that have been launched to address current weaknesses, will deliver the necessary improvements sufficiently rapidly (or at all).
• Despite indications that Smart Acquisition has led to an improvement in delivery performance of new equipment, there has been backtracking on the principles of Smart Acquisition. Progress on key dimensions is now significantly worse than in 2003. This is particularly notable with the integration of skills in integrated project teams and in streamlining of the approvals and oversight process. However, it should be recognised that many of the underlying changes which have caused the backtracking are deliberate attempts by the Department to optimise acquisition on other dimensions (e.g., professionalization, overhead (ACR) cost reduction, TLCM).
• DE&S' PACE initiative remains ongoing. The processes of collocation, flexible resourcing and headcount reduction entailed by the initiative will continue to deliver savings in the operating costs of DE&S, but may also cause considerable disruption / risk as teams supporting delivery of key capabilities are reorganised.
• "Fit For Business" lacks credibility in up-skilling the Defence acquisition organisation to deal with industry on the basis of equals. The initiative, and more importantly the commercial function as a whole, appears to lack leadership and a clear path to achieving a more capable vision that is substantially different from initiatives which have gone before, and only gone part way to delivering the aspiration of the Department.
• The current situation at DE&S is widely recognised to have some critical weaknesses in regard to acquisition of new equipment, including:
- shortage of programme management skills;
- weak influence from finance function;
- poor management information and use of information;
- poor cost estimating capability; and
- rapid staff rotation inhibiting skills build up and reducing accountability.
• The presence of military personnel in line management project delivery positions creates a conflict of interest within DE&S itself.
• Responsibilities and interfaces between the delivery community (DE&S) and the requirements community, and the delivery community and the User are unclear.
• There is limited commercial focus on delivery of equipment within the forecast performance / cost / time envelope (due to other constraining factors).
• PACE initiative (and others in the acquisition system) will incrementally improve the situation over the course of time. However, improvement will be slow and incremental since the required skills are not really valued by the organisation and incentives for its development are not strong enough.
• There is substantial duplication of assurance / scrutiny effort between IAB DE&SIB submissions. Assurance process is perceived as overly onerous given level of "value add". The commitment control regime has added further challenge to the approvals regime, and has led to a (deliberate) slow-down in spending.
• The wider Departmental management information systems associated with the acquisition system (particularly PB&F, CMIS) are not adequately supporting management in understanding current performance, e.g., delivery against EPP / ESP, or in considering options to ameliorate future issues.