The Nimrod Review - Official Documents

The Nimrod Review
Conclusions
25.16
566
Industry. Second, because of the apparent absence of any real quality control in the extended Procurement
chain, notwithstanding the considerable mark-up applied up the chain. 4
In my view, none of the above problems can be dismissed as one-off. They are symptomatic of a wider malaise,
and some deeper structural problems, in both the bi-lateral and triangular relationships involving the MOD and
Industry.
25.17 The fact of the matter is that commercial imperatives, i.e. maximising profit for shareholders, garnering the next
piece of business etc., do drive behaviours and not always for the better, as the NSC demonstrates.
25.18 The truth is that a lot of outsourcing does not represent value for money, nor does it produce real Safety and
Airworthiness (as opposed to the ‘appearance’ thereof).
25.19
25.20
25.21
These fundamental issues must be addressed both for the short-term and long-term health of Defence and the
Armed Forces. It is vital that the relationship with Industry works.
The story of the loss of Nimrod XV230 and the NSC should be a catalyst to a careful re-examination of the
various relationships at all levels, in order quickly to rebuild trust in the short term and, in the longer term, to
develop joint values and new ways of working together to achieve common outcomes.
Three matters are key in my view for the future:
(1) First, quickly rebuilding skills and confidence and restoring the ability of the MOD customers to act as
‘intelligent customers’.
(2) Second, having arms-length contractual clarity.
(3) Third, to be far more discriminating in the future as to what is, and is not, outsourced in Industry.
Recommendations
25.22
I make the following Recommendations for the future:
Recommendation 25.1: Careful consideration should be given to the above problems and the formulation of a
New Industry Strategy which addresses them.
Recommendation 25.2: The MOD should identify the key skills and experience which are required to ensure
that it is an ‘intelligent customer’ when dealing with Industry and ensure that these are maintained and enhanced
in-house.
Recommendation 25.3: The MOD should seek repayment of the cost of the Nimrod Safety Cases 1 and 2 from
BAE Systems.
Recommendation 25.4: Paramountcy should be given in the future to arms-length contractual clarity.
4 See further Chapter 5.