The Nimrod Review - Official Documents

2008: ISD slips a further 3 months
14.10
14.11
Chapter 14 – Procurement
In 2008, the NAO MPR reported that the Nimrod MRA4 programme was a key factor in a forecast aggregate
increase in the cost of projects of £205 million. The MRA4 programme was reported to have suffered a
further £102 million increase in costs and a further three month slip in the ISD to December 2010. The MPR
noted that:
“The project has had a long history of delays (a total of 89 months was reported in
Major Projects Report 2007) and cost increases (£687 million reported in Major Projects
Report 2007, a 24 per cent increase over approved costs) reflecting a mixture of technical
problems, resourcing shortfalls and the need to incorporate the cost increases within the
constrained defence budget.” 11
Thus, the total slippage in the MRA4 ISD is currently over 10 years with the consequential increase in the
Out-of-Service Date (OSD) of the MR2. According to the NAO 2008 MPR, the total cost overrun of the MRA4
programme is approximately £789 million.
Baleful effect of moving OSD of MR2
14.12
14.13
In my view, it is clear that the regular moving back of the OSD of the Nimrod MR2 has had a baleful effect
on the aircraft, namely e.g.:
14.12.1
14.12.2
14.12.3
As long ago as July 1990, a recommendation for the replacement of certain Nimrod Hot Air Ducts
was not pursued inter alia because of “the now planned earlier retirement of the aircraft”. 12
In the late 1990s, it was decided that Nimrod fleet should not be put onto the Logistics Information
Technology Strategy (LITS) system because of its impending OSD.
In July 2006, the Nimrod IPT decided not to proceed with implementing BAE Systems’
recommendation following the XV227 incident for the fitting of a hot air leak warning system
because it was not practicable to do so given the length of time it would take to introduce such
a Mod into service compared against the MR Mk2’s OSD. 13
I turn to explain next the changes to the procurement system that occurred during the procurement history
of Nimrod MRA4.
Changes in Procurement System
14.14
Nimrod MRA4 started its procurement life as part of the process known as the ‘Downey Cycle’ whereby a
military platform programme went through the seven stages of ‘Concept, Feasibility, Project Definition, Full
Development, Production, In Service, and Disposal’. One of the perceived problems with the Downey Cycle,
however, was insufficient funding allocated to reduce risk at the early stages of procurement projects.
1998: SDR – Smart Procurement
14.15
In 1998, McKinsey & Co (McKinsey) presented its recommendations to deal with what it described as the
MOD’s “serious failings” in the process of developing and purchasing major military systems. 14 The Strategic
Defence Review (SDR) of 1998 introduced the so-called ‘Smart Procurement’, aimed at making procurement
‘faster, cheaper, better’. In October 2000 the initiative was renamed ‘Smart Acquisition’ to stress the point
that the MOD was concerned with both procurement and in-service support, i.e. both buying the equipment
and supplying the means to support it throughout its in-service life.
11 NAO 2008 Major Project Report 2008, page 18. (18 December 2008)
12 Loose Minute concerning the supply of Nimrod hot air ducts dated 24 July 1990.
13 BOI Report, Exhibit E [E-2].
14 Transforming the UK’s Procurement System, McKinsey & Co., 20 February 1998, page 1.
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