The Nimrod Review - Official Documents

The Nimrod Review
‘Partnering’
12.17
12.18
12.19
348
Upgrade/Update Services. Periodically, aircraft require upgrades to introduce new capabilities, or
updates to deal with the obsolescence of components and thus to maintain existing capability. The
MOD normally contracted with Original Equipment Manufacturers (OEMs) for design activity to support
these programmes, as well as for the manufacture of new equipment.
Spares. The in-service support of an aircraft requires spare parts both for routine, scheduled maintenance
and to rectify defects. Although simple parts might be sourced from approved 2nd or 3rd
tier suppliers,
complex items (which are generally the cost drivers) are either only produced by the OEMs or need to be
qualified by them as being fit for purpose. Equally, the specialised repair of components is often beyond
the capability of third parties without uneconomic investment in facilities and equipment.
Post-Design Services. Post-Design Services (PDS) is a term that covers the technical support for repair
schemes, the design of routine modifications and fault investigation. Although the MOD traditionally had
a limited engineering design capability, and some third parties provided support in this area, the OEM is
normally best placed to handle complex PDS tasks. This is by virtue of its facilities, expertise and experience
in designing major air systems. As the volume of the aircraft support business has reduced, the overheads
associated with maintaining multiple centres of expertise have become increasingly uneconomic.
Maintenance, Repair and Overhaul Services. The MOD has always carried out a significant amount of
Maintenance, Repair and Overhaul (MRO) in-house. However, some specialist tasks, such as fatigue lifeextension
programmes or major upgrades, require facilities and skills available to the OEMs, but which
would be too costly to replicate elsewhere. Thus, Industry has always been contracted to undertake a
proportion of the MOD’s MRO.
‘Partnering’ was the term coined by the MOD for its strategy of entering into long term arrangements with
Industry for the support of equipment across the Sea, Land and Air domains. There were two primary stimuli for
the Partnering initiative which began in the late 1990s. First, the cost of supporting MOD aircraft was regarded
as increasingly expensive; this was partly because inflation in the aircraft support sector had for many years
been running at a higher rate than the inflation escalator applied to MOD budgets. Second, with successive
reductions in the size of the RAF, Army Air Corp and Fleet Air Arm, the number of orders for new air systems had
been steadily falling and the UK Defence Industry and major OEMs began to look to offset the loss of new-build
business by providing more in-support services to the military. The MOD believed that the UK Defence Industry
should maintain a viable industrial base because otherwise its ability to support existing in-service platforms and
equipment would be jeopardised.
‘Partnering’ was predicated on entering into long term agreements with OEMs for integrated support services
encompassing most, if not all, of the traditional support sub-disciplines. The aim was to use the stability inherent
in such arrangements to deliver long-term efficiencies and to incentivise Industry to reduce recurrent costs. By
focusing on overall aircraft or equipment availability as the measure of Industry’s success, OEMs were incentivised
to deliver all aspects of a support solution to time, cost and performance. In addition, it is in Industry’s interests
to seek to improve reliability and availability as well as to tackle the root causes of obsolescence.
The MOD continues to hold airworthiness responsibility on behalf of the Secretary of State for Defence. Successful
‘partnering’ (and outsourcing generally) is crucially dependent on the MOD acting as an ‘intelligent customer’.
This in turn depends on (a) continued engagement of MOD personnel in the technical decision-making process
and (b) maintaining the necessary in-house expertise in the relevant disciplines. I make Recommendations
regarding this in Chapter 24.
End-to-End (E2E)
12.20
9 The ‘End-to-End’ (E2E) initiative was conceived in roughly the same timeframe (the late 1990s) and for similar
reasons. Again, the reduction in numbers of front line aircraft was the stimulus and it was recognised that
there was excess capacity within the combined MOD/Industry facilities. The E2E programme began in parallel
with Partnering and was conceived to address the inefficiencies associated with maintaining multiple centres of
excellence for MRO activity, and the conflicting priorities of the various parties undertaking such work.
9 The American idiom is ‘Soup to nuts’ (and Lat. ‘ab ovo usque ad mala’).