| Programme | Stage reached | Procurement approach | Prime or lead contractor | Main contract management issues |
| Warrior armoured vehicle upgrade | Cancelled in March 2021, having been in the 'demonstration' phase with the prime contractor since 2011. | Competitive | Lockheed Martin UK () | The contracting approach to the work required on the vehicle, notably the fitting of a new turret equipped with a cannon supplied under a separate contract, left it with a challenging task in integrating the contributions of a range of suppliers and providing key components to the lead contractor. The lead contractor and supplier of the cannon were not in a contractual relationship although their work was interdependent. Design delays affected progress from 2011 and the contract with the prime contractor was re-set in 2014. A significant contract amendment followed in 2017 to incorporate integration of the cannon which had only been at the prototype stage at the time of the 2014 re-set. The was responsible for delivering the cannon to the prime contractor as Government Furnished Assets (). In evidence to the House of Commons Defence Committee in 2020, stated that some 80% of schedule delays were related to factors other than its design work.4 The stated that it "broadly agreed" with this assessment during the accompanying evidence session. By the end of 2018, the view was that senior engagement with the prime contractor, new governance procedures, and personnel changes had improved working relationships. The improved working relationships continued during 2019 and 2020. In October 2020, the Infrastructure and Projects Authority () did not consider the programme ready to proceed to the full manufacture stage. Subsequently, the paused progress of the Full Business Case towards approval as part of its consideration of the , prior to cancellation in March 2021. |
| Ajax armoured vehicle | In the demonstration andmanufacture phase to deliver since 2010 for delivery of 589 vehicles. | Competitive | General Dynamics United Kingdom Ltd | In 2014, the negotiated a deal for the manufacturing contract that accommodated a reduced order size without increase in unit price, in return for granting the supplier a time extension for the demonstration phase. Both the and supplier underestimated the complexity of the work involved in developing a range of vehicle types, including gaining safety accreditation. The decided to run the design and manufacture phases concurrently in pursuit of substantial savings and to ensure timely delivery of the capability. This ultimately led to a 15-month renegotiation, before a re-baselining of the contract in 2019. The purpose of the re-baselining was to maintain the existing schedule, settle outstanding disputes and incorporate customer changes to requirement, while making some concessions on capability at no additional cost to the . Achievement of key milestones remains challenging with the level of resource available to the delivery team. In April 2021, a review by the raised serious concerns about the deliverability of Ajax to the current timetable. The told us that it continues to consider Initial Operating Capability () achievable by the end of June 2021, despite the senior responsible owner's rating of delivery confidence as 'red'. |
| Boxer armoured vehicle | Contract for manufacture of 508 vehicles placed in November 2019. | Non-competitive (through the European procurement agency OCCAR) | ARTEC Gmbh (via OCCAR) | OCCAR has day-to-day responsibility for managing contracts with the supplier and programme delivery. At the start of the programme the saw key challenges going forward as a challenging timetable and the management of interdependencies with other programmes. The programme has not experienced significant issues since the manufacturing contract was let. |
| A400M transport aircraft | Contract for delivery of 22 aircraft let in 2003. | Competitive (through OCCAR) | Airbus Military SL (via OCCAR) | OCCAR has day-to-day responsibility for managing contracts with the supplier and programme delivery. The supplier's delivery of aircraft to the partner countries has been severely delayed during the course of the programme, including a six-year delay to UK entry into service. The lead supplier had already incurred losses of billions of euros on the fixed price contract, threatening the viability of the programme. The has agreed to receive reparations in kind through enhancements to capability as part of a re-baselining of the contract signed in 2019. Although it has been in service since 2015, setting up a 'joint venture' steering group has proved an effective way of addressing problems with low levels of aircraft availability, which caused strained relations between the and supplier during 2018-19. |
| Poseidon P-8A maritime patrol aircraft | Contract for delivery of first of nine aircraft let with the US government in 2017. | Non-competitive (purchase through US government) | The Boeing Company (via the Defense Security Cooperation Agency) | The purchase of an existing in-service capability through the US government de-risks many aspects of programme delivery, although the price paid is non-negotiable and the process imposes additional restrictions, for example, on the use of intellectual property. The programme involved extensive work with a wide range of stakeholders and key interdependencies, such as partner nations and infrastructure requirements. The achieved on schedule in April 2020. |
| Protector unmanned aerial vehicle | Contract for manufacture of 16 vehicles let in 2018. | Non-competitive (partly purchased through the US government) | General Atomics Aeronautical Systems Inc | Despite the delaying the programme for funding reasons, the supplier helped to maintain the project's momentum. This is in part a purchase through the US government, but the delivery team has valued the additional flexibility and control where contracts are directly with the supplier. Further schedule slippage has occurred due to delays in the provision of supporting infrastructure. |
| Marshall air traffic management system | Contract for radar infrastructure delivery and service provision let in 2014. | Competitive | Aquila Air Traffic Management Services Ltd | The and supplier re-set the contract in 2018, as both recognised the need to address the causes of delays by increasing programme and contract management resources, clarifying roles and responsibilities between Aquila and different parts of the , setting up a joint programme management office and forming more constructive behaviours and relationships. Following realisation that some aircraft were fitted with equipment incompatible with the system, and the continuing changes to user requirements, the parties agreed a further contract amendment in late 2020. The declared , originally due in 2017, in January 2021. |
| Type 26 frigate | Contract for design phase let in 2010; contract for construction of first three ships let in 2017. | Non-competitive (due to UK sovereignty requirement) | BAE Systems Surface Ships Ltd | Large increases in cost estimates during design phases led to delays of more than three years in approval to manufacture while attempts were made through a joint -supplier project board to provide an affordable route to manufacture and mitigate the root causes of problems on previous shipbuilding programmes. The cut the number of ships it would procure from 13 to eight in 2015 to meet affordability constraints. With construction underway, current concerns include the supplier's rate of progress (exacerbated by the impact of COVID-19) and the ability to provide . Through its Strategic Partnering Programme (paragraph 3.17) the is undertaking work with the lead supplier to address issues with the supply chain. |
| Type 31e frigate | Contract for competitive design phase let in December 2018; contract for construction let in November 2019. | Competitive | Babcock International Group PLC | The had set a target price of £250 million per ship in the National Shipbuilding Strategy. During the competitive design phase, bidders indicated that they would withdraw from the competition unless the excluded the £90 million of from the budget, which they did. Progress on the firm price contract has been satisfactory despite COVID-19. |
| Crowsnest radar system | Contract for delivery let in 2016. | Non-competitive | Lockheed Martin UK Ltd | The did not oversee its contract with the prime contractor effectively and, despite earlier problems on the project, neither was aware of a key sub-contractor's lack of progress until it was too late to meet the target delivery date. The senior responsible owner is now reporting much improved supplier behaviours against a re-planned timetable. All parties have committed more staffing resources. The is withholding payments for poor performance. |
| Astute attack submarine boat 5 (HMS ANSON) | Within the overall Astute programme, the main contract for Boat 5 was let in 2015. | Non-competitive (due to UK sovereignty requirement) | BAE Systems Marine Ltd | Delays in delivery of the fifth boat in the programme are primarily a consequence of issues with earlier boats in the programme, particularly Boat 4. The delivery team is monitoring a quality improvement plan being implemented by the supplier. In early 2020, the parties agreed a contract amendment to offset supplier claims and changes to user requirements. COVID-19 will increase schedule slippage. |
| Spearfish torpedo upgrade | Contract let in 2010. In demonstration and trials phase since 2014. | Non-competitive (due to UK sovereignty requirement) | BAE Systems PLC | The programme has suffered delays due to the and supplier's programme management. The supplier had problems designing and trialling its technical solution. The originally scoped the programme too narrowly and has had to bring other projects within the programme. The programme team reports considerable improvements in programme governance since 2019. Both parties have found it difficult to produce a safety case to meet accreditation requirements and are continuing to work together on a solution. In March 2021 the declared that the Spearfish weapon project portion of the programme had achieved . |
| Morpheus | Contract with 'transition partner' to develop 'open architecture' for future phases let in 2016. | Non-competitive | General Dynamics United Kingdom Ltd | The has lacked the resource capability and capacity to programme manage the contract as a 'pseudo-prime contractor'. Both and supplier have struggled to implement an 'agile' procurement approach, especially in the context of a firm price contract (see paragraph 3.5). Lack of progress prompted the to commission an independent review in late 2020 which established a lack of clarity about both the target solution and what had been achieved for the expenditure to date, as well as the need to improve governance, control and behaviours, and apply lessons learned. The is continuing to explore options for taking the project forward. |
| Complex Weapons | 'Enabling contract' in place since 2010, to which individual weapons contracts are amendments. | Non-competitive | MBDA UK Ltd | The currently expects to achieve its targets of achieving £1.2 billion of net efficiencies through the contract and protecting UK capability in this area, notwithstanding delays or cost increases on some sub-projects. In renewing the agreement in 2021, the will aim to better incentivise supplier performance, apply the Single Source Contract , and embed an 'agile' operating model. |
| Skynet 6 communications satellite | Contract for 6A sub-project let in 2020. | Mix of non-competitive and competitive. Non-competitive element (6A) has UK sovereignty requirement | Airbus Defence and Space Ltd (for Skynet 6A) | Suppliers have met milestones on the 6A contract to date. Letting of the 'Service Delivery Wrap' contract is delayed by 12 months. |
| New Style of IT (Deployed) | Approval given in 2016 to let a range of contracts through competition. | Mix of non-competitive (existing contract) and competitive (new contracts) | ATLAS consortium (initially) | The has lacked the resource capability and capacity to project manage the contract as a 'pseudo-prime contractor', and to successfully implement an 'agile' contracting approach. The project team reported that costs were underestimated at the main decision point, exacerbated by an inadequate provision for risk. The delivery team therefore concluded in September 2020 that the programme could not deliver against its approved cost, time and performance parameters. |