Implementation of a UOR-derived EP acquisition process -

Implementation of a UOR-derived EP acquisition process

04 Jun 2018

Acquisition as a strategic activity is fundamental to Defence: it is time adopt a new agile acquisition process that benefits the modern technological landscape

Since the CADMID approach is restricting Defence opportunities, the implementation of such a process has the potential to increase the rate of equipment delivery, thereby allowing technological advances and the dynamic strategic landscape to be pro-actively acted upon.

Acquisition as a strategic activity is fundamental to Defence. It is the foundation of Defence’s ability to deter and respond to threats, to develop and exploit opportunities, and to advance UK interests by providing the equipment and support used by the armed forces. Its effective and efficient delivery is critical to maintaining Defence’s leading-edge capabilities and competitiveness.

Acquisition is the responsibility of Defence Equipment and Support (DE&S) which has two routes open to it; the Equipment Plan (EP) and the Urgent Operational Requirement (UOR) process. The EP is the primary acquisition route. It is funded from the MOD equipment budget and is developed to provide the equipment and support required to deliver premeditated responses to forecasted future threats that are collectively encapsulated in the Defence Planning Assumptions. The UOR process is funded from additional HM Treasury money and is designed to respond to a particular operational need or emerging threat with reduced and clearly defined requirements. It has a much lower overhead and suits acquisition on much shorter timescales than the EP by delivering ‘the 80% solution’, balancing risk against satisfying a capability gap whilst providing a pragmatic approach to through life support.

The National Audit Office (NAO) report ‘The Equipment Plan for 2017 to 2027’ projects equipment and support costs of £180 billion and is characterised by lead times measured in years and decades. This pace of equipment delivery is disconnected from the dynamic and uncertain global strategic landscape. Furthermore, despite noted improvements in project controls and cost modelling, the NAO reports an affordability gap of up to £20.8 billion, with Sir Bernard Grey reporting that 80% of equipment programmes suffer delays and ensuing cost increases of 40% on average. With such long lead times and large amounts of money involved, the EP has overtaken defence policy rather than supporting it and the levels of investment it receives are unrelated to the budget required to acquire capabilities within appropriate timescales.

Experience tells us that immature requirements and uncontrolled requirements changes are major contributors to EP delays; delays which leave the EP out of step and outdated for emerging threats and operations theatres. Add in over-specification as Defence seeks to deliver ever more sophisticated world-beating capabilities on ever decreasing order sizes, such that each unit is essentially a prototype, and it is a perfect recipe for rampant cost increases. Couple this with an organisation that is has only just claimed that it is “match-fit” there is an inherent immaturity to Portfolio delivery, predominantly due to the lack of industry experienced practitioners and programme execution experts.

The UOR process has proven highly successful in its ability to cut through bureaucracy, deliver new equipment to maintain operational tempo and provide a strategic advantage in-campaign. Hundreds of, albeit mainly low value, UORs have been satisfied and, as mentioned previously, this has been at the expense of fully considering the capability’s whole life-cycle because the UOR should only be used for a limited period. This provides motivation for moving away from large equipment programmes and to focus on the ability to rapidly generate a more diverse array of cheaper platforms with modular designs and robustly defined component interfaces such that they are capable of being adapted to carry weapons systems and payloads suitable to the task at hand. In an era of fiscal pressure it is not possible to sustain a robust force ready for any threat or non-combat task but instead we must assemble a customised force for each campaign.

“It is time adopt a new agile acquisition process that benefits the modern dynamic and unpredictable strategic landscape, pace of technological evolution and reduced long term funding commitments”

A derivative of the UOR process could replace the EP as the primary route for acquisition and be funded from the MOD budget. This derivative agile process should build on the lessons learned from both EP and UOR to support a hybrid and economic capacity to generate capabilities. It should champion a strong and robust requirements process with earliest possible industry engagement, detailed and robust cost modelling and programme controls, and provide an intrinsic capacity for rapid iteration through the whole capability life-cycle.

The largest and most expensive of MOD’s acquisition programmes may still require an alternative process. This may be the case for strategic programmes when an enduring capability is required or desired. The MOD should have the option to apply the most appropriate acquisition process rather than be mandated to a singular approach.

Industry has indicated its willingness and ability to respond to Defence acquisition activity more rapidly than is currently exploited by the MOD. Industry supports the direction of reform currently underway within DE&S but there is a clear need to refresh the acquisition process in favour of agility and a focus on delivery.

Article by Mal Fox and Thomas Fox, RINA