Defence Projects

In recent years, researchers and analysts in the UK, the USA, Australia and some continental European countries have examined the performance of high profile, high value defence procurement projects to determine the cause of the budget overruns and project delays that have beset the market, and the mega- projects in particular. This has resulted in the publication of a number of insightful reports that also inform the wider debate on project delivery and management, procurement and contract design.

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Ministry of Defence: Delivering Multi-Role Tanker Aircraft Capability (PDF)
National Audit Office , 2010
The Stationery Office
A report on the delayed procurement of the air-to-air refuelling and passenger air transport service commissioned by the UK Ministry of Defence.

UK

Special Report 1: Defense agencies must improve their oversight of contractor business systems to reduce waste, fraud, and abuse (PDF)
Commission on Wartime Contracting in Iraq and Afghanistan, 2009

The CoWC conducted a hearing to obtain testimony from government officials and contractors on the adequacy of contractor business systems. It makes four recommendations to improve accountability, audit and compliance.

USA

Defense Contracting Integrity: Opportunities exist to improve DOD's oversight of contractor ethics programs - Report to Congressional Committee (PDF)
Government Accountability Office (GAO), 2009

A survey of all 57 contractors doing more than $500m work with the DOD as well as contractor oversight agency officials. There are four recommendations for the improvement of oversight.

USA

DCAA Audits: Widespread problems with audit quality require significant reform - Report to the Committee on Homeland Security and Governmental Affairs, U.S. Senate (PDF)
Government Accountability Office (GAO), 2009

This report addresses audit quality issues at DCAA offices. It makes 17 recommendations to improve management environment, audit quality and oversight.

USA

Allocation and Management of Risk in Ministry of Defence PFI Projects (PDF)
National Audit Office (NAO), 2008

This study examines the allocation and management of risk in defence PFI projects. It is based on a detailed examination of eight diverse case study projects covering transport, power, armoured vehicles, telecommunications, animal centre, facilities management, and water.
9780102953121
UK

Defence Factsheet - MOD and QinetiQ (webpage) (Web Page)
Ministry of Defence (MOD), 2006

This factsheet gives an overview of the floating of QinetiQ and the public-private partnership that the Ministry of Defence undertook regarding its Defence Evaluation and Research Agency.

UK

Review of MoD PFI Projects in Construction and Operation (Word)
Ministry of Defence Private Finance Unit (MOD PFU), 2005

The review found PFI in the MoD generally delivers projects on time and within budget. The projects are performing well, delivering the services required, and long-term contracts are flexible enough to accommodate future change and deliver on a sustained basis. It notes a number of lesson learnt and examples of best practice and discusses ways in which the MoD could secure additional procurement outcome benefit.

UK

Ministry of Defence: Major Projects Report 2005 (HC 595-I Session 2005-06) (PDF)
National Audit Office : Report by the Comptroller and Auditor General, 2005
London: The Stationery Office Ltd.
This report covers cost, time and performance data for 30 defence equipment projects, in the year ended 31 March 2005. It finds that overall, the performance of projects has improved but performance is not consistent across all projects and challenges do remain.

UK

Ministry of Defence: Major Projects Report 2004, Third Report of Session 2005-06 (HC410 Incorporating HC 294-I Session 2004-05) (PDF)
House of Commons Committee of Public Accounts, 2005
London: The Stationery Office Ltd.
This report condemns the performance of the Ministry of Defence in procuring defence equipment and its inability to follow its own procurement rules. It states that although the principles underpinning Smart Acquisition are sound they have not been consistently applied.

UK

Driving the Successful Delivery of Major Defence Projects: Effective Project Control is a Key Factor in Successful Projects (HC 30 Session 2005-06) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2005
London: The Stationery Office
This report analyses the cultural and systemic drivers that need managing in order to deliver military capability more efficiently. It examines key factors in successful for defence projects, including cultural factors, measuring progress and the client contractor relationship.

UK

Ministry of Defence: Managing the Defence Estate (HC 25, Session 2005-06) (PDF)
National Audit Office : Report by the Comptroller and Auditor General, 2005
London: The Stationery Office
This report covers the development of contracting models used in managing the defence estate. It finds that good progress has been made in developing a strategy to meet new requirements and in rationalising defence estates to deliver good quality estates. It concludes, however, that risk needs to be better managed and there needs to be greater focus in changing culture in order to fully realise benefits.

UK

Ministry of Defence: Major Projects Report 2004 (HC 1159-I Session 2003-04) (PDF)
National Audit Office : Report by the Comptroller and Auditor General, 2004
London: The Stationery Office
This analysis covers the cost, time and procurement data for MOD procurement projects in financial year 2003-2004. It finds that problems continue to emerge in defence equipment projects and barriers remain to improving acquisition performance. There is little evidence that project performance has improved in recent years, but there have been examples of successful projects.

UK

Ministry of Defence: Major Projects Report 2004 - Project Summary Sheets (HC 1159-II Session 2003-2004) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2004
London: The Stationery Office
Published alongside the Ministry of Defence: Major Projects Report 2004, HC 1159-I (available above), this volume summarises the background, costs, timeframe and requirements of a number of defence projects.

UK

Ministry of Defence: Major Projects Report 2003 (HC 383 Forty-third Report of Session 2003-04) (PDF)
House of Commons Committee of Public Accounts, 2004
London: The Stationery Office
This report examines the impact of large cost overruns and delays; the way the Ministry of Defence understands and manages risk; how the Department and industry can develop a more constructive relationship; and how to prevent poor procurement being repeated in the future.

UK

Ministry of Defence: The Management of Defence Research and Technology (HC 360, Session 2003-04) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2004
London: The Stationery Office
This report examines the Ministry of Defence's new approach to Research and Technology - from one of creating the Technology Base to one which accesses and exploits it. The report covers a number of issues, including competition in defence research and technology, and difficulties in measuring research outcomes.

UK

Ministry of Defence: Major Projects Report 2003 (HC 195 Session 2003-04) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2004
London: The Stationery Office
This report provides cost, time and technical performance data for defence procurement projects in financial year 2002-2003. It finds that projected cost and time performance has deteriorated in-year. The approach to the Assessment Phase continues to develop but some projects have passed insufficiently de-risked.

UK

Ministry of Defence: The Construction of Nuclear Submarine Facilities at Devonport (HC 636 Thirty-seventh Report of Session 2002-03) (PDF)
House of Commons Committee of Public Accounts, 2003
London: The Stationery Office Limited
Based on a Report by the Comptroller and Auditor General and evidence taken from three sources, this report concludes that the main parties did not come together early enough to engage on issues that were key to successful implementation, that the Ministry of Defence's attitude to risk transfer was unrealistic and it now bears virtually all the risk itself, increasing the final cost to the taxpayer.

UK

Military Operations: Contractors Provide Vital Services to Deployed Forces but Are Not Adequately Addressed in DOD Plans (GAO-03-695) (PDF)
Report to the Subcommittee on Readiness and Management Support, Committee on Armed Services, U.S. Senate, 2003
Washington D.C.: United States General Accounting Office
This report examines the extent of contractor support, the extent to which contractors are considered in UD Department of Defense planning and the adequacy of DOD's guidance and oversight mechanisms in managing its overseas contractors. The report discusses the issue of developing contingency plans in case contractors' essential services delivered by contractors become unavailable.

USA

Depot Maintenance: Public-Private Partnerships Have Increased, but Long-Term Growth and Results are Uncertain (GAO-03-423) (PDF)
Report to the Subcommittee on Readiness, Committee on Armed Services, House of Representatives, 2003
Washington D.C: United States General Accounting Office
This report reviews the use of public-private partnerships in depot maintenance in improving their efficiency and viability. It includes discussion of characteristics the US Department of Defense believes contribute to the success of partnerships, but points to limitations of DOD's ability to measure the overall success of the partnerships.

USA

Missile Defence: First Special Report of 2002-2003 - Government's Response to the Committee's First Report of 2002-03 (PDF)
House of Commons Defence Committee, 2003
London: The Stationery Office
The Government's response to the Defence Committee's report on Missile Defence, HC 290-I (available below). In particular, the government opposes the Committee's suggestion that the Ministry of Defence has shown little respect for local opinion regarding the RAF Fylingdales radar upgrade.

UK

Missile Defence (HC 290-I First Report of Session 2002-03) (PDF)
House of Commons Defence Committee, 2003
London: The Stationery Office
The Committee's report sets out its views regarding the debate surrounding the US request of technology and software upgrades at RAF Fylingdales (Serco's longest standing contract) as part of the proposed US Missile Defence system. This report gives an overview of missile defence and the UK's approach. It concludes that the government should agree to the request, but condemns the manner in which public debate has been handled by the Ministry of Defence.

UK

Ministry of Defence: Major Project Reports 2002 (HC 91 Session 2002-2003) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2002
London: The Stationery Office
This report contains analysis of cost, time and procurement data for Ministry of Defence procurement projects in financial year 2001-2002. The report concludes that there has been a continuing improvement in project performance, but that maintaining this improvement will be challenging. It also gives three brief case studies of C-17 Heavy lift aircraft, Type 45 Destroyer and Skynet 5 Satellite Communications System.

UK

Ministry of Defence: Building an Air Manoeuvre Capability: The Introduction of the Apache Helicopter (HC 1246 Session 2001-2002) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2002
London: The Stationery Office
This is a report on the introduction of the Apache Helicopter, which includes some analysis of the separate PFI contract to provide training services. The training services contract was let in July 1998, after a late decision to select a PFI route on grounds of affordability. The delivery of the Apache is going broadly to plan, but managing all aspects of delivery in a coherent manner is challenging.

UK

Ministry of Defence: The Joint Services Command and Staff College (HC 537 Session 2001-2002) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2002
London: The Stationery Office
This report analyses the progress of the Joint Services Command and Staff College, looking at how it has succeeded, and where there is scope for further improvement. The study concluded that the PFI deal for the College's permanent home was 'good value for money' and provides useful lessons for the future.

UK

Ministry of Defence: Major Projects Report 2001 (HC 330 Session 2001-2002) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2001
London: The Stationery Office
The report gives an analysis of cost, time and procurement data for MOD procurement projects in financial year 2000-2001. The report concludes that there is evidence of continued improved cost control, the delays are beginning to be brought under control, and the Ministry of Defence is still expected to meet the majority of the technical requirements of customers.

UK

DOD Competitive Sourcing: Effects of A-76 Studies on Federal Employees' Employment, Pay, and Benefits Vary (GAO-01-388) (PDF)
Report to Congressional Requesters, 2001
Washington D.C.: United States General Accounting Office
This report assesses the impact of A-76 public-private competition on employment, pay and benefits, and the extent to which competition reduce costs of defence activity. It finds that employment, pay and benefits are affected by a number of individual factors making it difficult to draw universal conclusions.

USA

Long-Run Costs and Performance Effects of Competitive Sourcing (CRM D0002765.A2) (PDF)
Clark, Frances; Rosenblum, Cheryl; Coast, Murrel; Smallwood, Elaina, 2001
Virginia: Center for Naval Analyses
This report sets out to assess the long-term costs associated with outsourcing and competition decisions, looking at both observed and effective cost; and post-competition performance. It finds that savings are real and sustained and performance is satisfactory.

USA

Ministry of Defence: Major Projects Report 2000 (HC 970 Session 1999-2000) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2000
London: The Stationery Office
Covering the period to 31st March 2000, this report analyses cost and time performance of the Ministry of Defence, and provides information on the progress of a number of projects. It concludes that the Department is meeting the technical requirements of its customers but not necessarily within approved time and cost.

UK

Ministry of Defence: Major Projects Report 1999 (HC 613 Session 1999-2000) (PDF)
National Audit Office: Report by the Comptroller and Auditor General, 2000
London: The Stationery Office
This report examines the status of Ministry of Defence projects against time and cost targets, and the impact of project slippage on operational capability and costs.

UK

Military Base Closures: Lack of Data Inhibits Cost-Effectiveness Analyses of Privatization-in-Place Initiatives (GAO/NSIAD-00-23) (PDF)
Report to the Chairman, Subcommittee on Military Readiness, Committee on Armed Services, House of Representatives, 1999
Washington D.C.: United States General Accounting Office
This report examines the status, cost and effectiveness of three privatization-in-place projects, where the private sector takes over a facility that was once operated by the government.

USA

Government Contracting Options: A Model and Application
Keating, Edward G., 1999
Defence and Peace Economics, Vol. 10, No. 2 (May 1999), pp.191-223
This paper models and analyses a principal-agent contracting model. It looks at cost-sharing, pricing models, competition and how best to devise contracts. It concludes that the best contracting approach combines a lump-sum payment and a contractor-provided availability guarantee.

UK

Medium Support Helicopter Aircrew Training Facility: PFI Case Study
Treasury Taskforce, 1998
Office of Government Commerce
This report is a case study examining the PFI contract for the provision of aircrew training for the RAF Support Helicopter force. The project was felt to offer valuable lessons, being the first PFI contract involving defence-specific assets that had been awarded by the Defence Procurement Agency (DPA).

UK

Base Operations: Challenges Confronting DOD as it Renews Emphasis on Outsourcing (GAO/NSIAD-97-86) (PDF)
Report to the Chairman, Subcommittee on Military Readiness, Committee on National Security, House of Representatives, 1997
Washington D.C.: United States General Accounting Office
This report examines the extent to which the DOD and the services emphasise outsourcing of support services, the factors that influence savings in the process of outsourcing and impediments to outsourcing. The report recognises that savings may be made, but it questions the magnitude of these savings.

USA

Defence Outsourcing: Challenges Facing DOD as it Attempts to Save Billions in Infrastructure Costs (GAO/T-NSIAD-97-110) (PDF)
Statement of David R. Warren, Director, Defense Management Issues, National Security and International Affairs Division. Testimony before the Subcommittee on Readiness, Committee on National Security, House of Representatives., 1997
Washington D.C.: United States General Accounting Office
This testimony discusses past experience of the Department of Defense in achieving infrastructure savings, and the challenges that the DOD faces in reaching future goals. While this report finds that there are opportunities to reduce infrastructure costs, it questions the magnitude of the saving that can be realised within the current strategy and structure.

USA

Case Studies in DoD Outsourcing (CAB 96-62) (PDF)
Tighe, Carla E. with: Jondrow, James M., Keenan, John D., Marcus, Alan J., Moore, Carol S., Reeger, (LCdr.) Christopher M., Robinson, Matthew T., Trunkey, R. Derek, 1997
Virginia, Center for Naval Analyses
This report presents case studies of private sector involvement Department of Defense outsourcing experiences, covering training, housing, maintenance, and base operating support.

USA

Army Depot Maintenance: Privatization Without Further Downsizing Increases Costly Excess Capacity (GAO/NSIAD-96-201) (PDF)
Report to Congressional Requesters, 1996
Washington D.C.: United States General Accounting Office
This report reviews plans to reallocate depot maintenance workloads, specifically consolidating workloads at the remaining Department of Defense depots and plans to privatise workloads in-place or at private sector facilities. The report looks at issues regarding cost-effectiveness, compliance and the impact on excess capacity in these privatisation options.

USA

Defense Depot Maintenance: Privatization and the Debate over the Public-Private Mix (GAO/T-NAIAD-96-146) (PDF)
Statement of David R. Warren, Director, Defense Management Issues, National Security and International Affairs Division. Testimony before the Subcommittee on Readiness, Committee on National Security, House of Representatives., 1996
Washington D.C.: United States General Accounting Office
This report discusses issues related to the allocation of depot maintenance between the private and public sectors, including privatization initiatives. It finds that future shifts to workload to the private sector, if not managed effectively, could exacerbate existing excess capacity problems and inefficiencies. And that privatisation is not likely to achieve the expected savings, it may even be more costly.

USA

Cost Case Study - Amberley RAAF Base (Web Page)
Appendix F, Competitive Tendering and Contracting by Public Sector Agencies, Industry Commission Inquiry Report, Report No. 48, 1996
Melbourne: Australian Government Publishing Service
This case study appeared as an appendix to a cross-sectoral Industry Commission study of competitive tendering and contracting (CTC) by public sector agencies. The case study examined the change in cost to the Royal Australian Air Force and the Department of Defence resulting from the contracting out of several aircraft maintenance and repair services at RAAF Base Amberly as part of the Commercial Support Programme (CSP), and the sources of any changes.

Australia

Submission to the Industry Commission Inquiry into Contracting Out
Department of Defence, 1995

The Australian Department of Defence's submission to Competitive Tendering and Contracting by Public Sector Agencies (available above), the Industry Commission Inquiry into the nature, scope and extent of contracting out.

Australia

Competition in the Provision of Support Services
Committee of Public Accounts, 1992
The Stationery Office

ISBN: 010213393X
UK

Federal Productivity: DOD's Experience in Contracting Out Commercially Available Activities (GAO/GGD-89-6) (PDF)
Report to the Chairman, Subcommittee on Federal Services, Post Office, and Civil Service, Committee on Governmental Affairs, U.S. Senate, 1998
Washington D.C.: United States General Accounting Office
This report evaluates the implementation of the A-76, examining key implementation issues, progress in attaining cost study goals, and the way in which the process affects government employees and operations.

USA

A Pilot Study of the Impact of OMB Circular A-76 on Motor Vehicle Maintenance Cost and Quality in the U.S. Air Force
Berry, Sandra H., Stolzenberg, Ross, 1985
Rand Corporation/Rand Report
This report analyses the impact of the A-76 procurement approach, designed to encourage the use to private firms to provide services to the government where this is viable. This study, using interviews and administrative data, finds that the application of A-76 leads to significant savings on cost with no effects on quality.

USA

DOD Functions Contracted Out Under OMB Circular A-76: Costs and Status of Certain Displaced Employees (GAO/NSIAS-85-90) (Web Page)
Report by the United States Government Accountability Office, 1985
Washington D.C.: United States General Accounting Office
This is a follow-up report to a report on the costs and effects of DOD compliance with A-76 (available below). This report aims to determine the hidden costs of contracting and compares the jobs of displaced employees who work for contractors to their previous government employment.

USA

DOD Functions Contracted Out Under OMB Circular A-76: Contract Cost Increases and the Effects on Federal Employees (GAO/NSIAD-85-49) (PDF)
Report by the United States General Accounting Office, 1985
Washington D.C.: United States General Accounting Office
This report reviews a sample of functions that were contracted out between 1978 and 1981, it finds that all but one of the functions had subsequent contract cost increases, but savings were still realised on the majority of the functions. The report also reviews the effects of contracting on government employees.

USA

Serco Institute Resource Centre

Defence Projects