The U.K. Parliament’s Public Accounts Committee sees armored vehicle capability gaps out to at least 2025 because the defense department failed to acquire the vehicles it required despite spending approximately $1.7 billion since 1998.
“Delays and cancellations to programs have resulted in gaps in armored vehicle capability that will not be filled until at least 2025,” the report said. “This is also partly due to long lead times in the procurement of armored vehicles. These capability gaps mean that it will be difficult for the department to achieve the aspirations of the Strategic Defence and Security Review (SDSR) to make the Army "more mobile and more flexible."
The report added that “a major contributory factor is that it has cut (about) $16.8 billion from its armored vehicles program in an attempt to balance its overall equipment budget.”
The department conceded it needs to be clear about its military priorities and not commit to projects it cannot afford, such as the original Future Rapid Effect System (FRES) program, which sought to deliver some 3,700 vehicles at a cost of approximately $21.9 billion, the report said.
U.S. defense firms General Dynamics [GD], Lockheed Martin [LMT], and Boeing [BA] were highly interested in various aspects of the FRES program.
For example, General Dynamics submitted a proposal for a FRES Utility Vehicle and was named the preferred bidder. The U.K. indefinitely suspended the program in 2008, and disengaged with General Dynamics (Defense Daily, May 9, 2008, Dec. 12, 2008). The FRES Scout variant is also delayed and not expected to enter service until 201, the report said.
In total, about $502.6 million has been spent on projects canceled or indefinitely suspended, and about $621.5 million on projects that have yet to deliver, the report said.
Only about $637.5 million of the expenditure since 1998 has resulted in vehicles being delivered–about 160 specialist vehicles. General Dynamics and Lockheed Martin were the successful bidders on the project, submitting a bid in 2009.
For the current force, “delays in programs, and cuts to armored and protected vehicle budgets, have resulted in gaps in capability,” the report said. Thus, the department had to rely on extra funds from the Treasury for rapid mine-protected vehicle procurement of Urgent Operational Requirements (UOR) for troops in Iraq and Afghanistan at an additional cost to the taxpayer that has now reached approximately $4.3 billion.
That also meant buying more vehicles than required. Compared to core programs, they are "expensive, less reliable, and will not meet the full requirements of the Strategic Defence and Security Review (SDSR),” the report said.
The committee said MoD should ensure that future procurement decisions are “based on a clear analysis of its operational priorities, and must challenge proposals vigorously to ensure they are both realistic and affordable. Once budgets have been set, they must be adhered to.”
The report also pointed out that over-specifying requirements and using complex procurement, something noted in the United States as well, hampered program delivery.
Another effect from armored vehicle delays was heavier pressure on other equipment, particularly helicopters to supply essential capability, something the department acknowledges is “neither effective nor efficient.”
The committee said the department “has yet to devise a coherent plan for delivering the equipment it needs to meet its strategic defense commitments. Despite having conducted the SDSR and two subsequent reviews, the Department has yet to reach a clear set of defense priorities which are achievable within the defense budget.”
The committee also pointed out there needs to be better accountability.
“Despite having failed to deliver any principal armored vehicles for over a decade, the Accounting Officer was unable to tell us who was responsible or whether anyone had paid the penalty for these failures.”
The report, “The cost-effective delivery of an armored vehicle capability,” was published Dec. 9 on the committee Web site: http://www.parliament.uk/business/committees committees-archive/committee-of-public-accounts/.