The approach taken to adjusting cost forecasts for capability trading that does not relate to changes in volume is reliant on cost variations being correctly classified as "Changed Requirements". Interviews with DE&S Performance and Risk team and IPTs suggest that in fact there is further capability trading that occurs that is "hidden".
This anecdotal evidence has pointed to a number of negative cost variations that are attributed to "Changed Budgetary Priorities" and "Technical Factors" that are actually changes to the originally capability forecast at Main Gate. As a result even the adjusted costs being analysed are likely to lead to a conservative estimate of cost growth.
As mentioned previously it was not deemed possible to adjust duration for capability; however, changes in capability are likely to influence the project duration and as a result estimates for growth in duration versus forecasts are likely to be conservative.
Furthermore, the duration of projects as defined by IG to ISD can be impacted by a change in ISD definition. In a number of instances the quantities required to meet ISD have been reduced and as a result the monitored project duration (MG-ISD) will reduce. In addition, some ISD definitions appear to be very loosely defined potentially allowing for 'shortening' to occur that is not visible. This is not something that has been addressed within this review.