Getting It Right From The Outset

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Getting It Right From The Outset With steel cut on the Royal Navy’s new Type 26 Global Combat Ship and a £3.7 billion order placed for the first three vessels, the experience of senior service chiefs and officials within the US Department of Defense holds some valuable lessons for the UK Ministry of Defence when it comes to calculating the true costs, technological challenges and risks associated with the procurement programme. By Pete Ito and Peter Antill

A Type 23 frigate returning from a counter-piracy operation: The Ministry of Defence says the Type 26 will be better able to take on multiple tasks, including tackling drug trafficking, piracy and terrorism. (MoD/Crown Copyright)

Defence Procurement International - Winter 2017/2018

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The helm and engine controls of a Type 23 frigate, which dates back to the 1960s (Photo by Angus Kirk)

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any old adages are recited because they, arguably, contain a certain element of truth. This certainly applies to the saying, “Well begun is half done,”especially in the realm of defence acquisition. As the UK prepares to design and produce its Type 26 Global Combat Ship (GCS), it is an admonition which appears to be critical, particularly in view of recent Pentagon experience. The UK National Shipbuilding Strategy, published in September 2017, notes that the UK Ministry of Defence (MoD) “signed a contract with BAE Systems for the ½VWXXLVII SJIMKLX 8]TIJVMKEXIWERH has already cut steel.”1 Under the 2010

HMS Daring the first Type 45

Strategic Defence and Security Review (SDSR), the Royal Navy was to receive 13 Type 26 frigates, replacing the Type 23 frigates on a one-for-one basis. But even then, it was noted that the MoD would “embark on a new programme of less I\TIRWMZIQSHIVRJVMKEXIWQSVI¾I\MFPI and better able to take on today’s naval XEWOWSJXEGOPMRKHVYKXVEJ½GOMRKTMVEG]ERH counter-terrorism.” 2 This focus on affordability was taken a step further in SDSR 20153 with a reduction in the requirement for the Type 26 frigate to just eight ships (to replace the Type 23s that have specialised in anti-submarine warfare roles) with the

remainder consisting of a new General Purpose Frigate (GPFF)4, now called the Type 31e (or just Type 31) frigate. 5 Such a move was commented on by XLI9/2EXMSREP%YHMX3J½GI 2%3 MRE January 2017 report where it stated that the Type 26 frigate was “the highest-value, non-nuclear procurement in the plan.”6 It EHHIHXLEXXLI7(76±WMKRM½GERXP] changed the requirement, reducing the number of Type 26s from 13 to eight, with XLIWLSVXJEPPMRWLMTRYQFIVWXSFI½PPIHF] the creation of a new class of frigate”, as well as ordering “two additional offshore patrol vessels.”7 The House of Commons Defence


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Committee had already expressed its concerns about the Type 26 frigate in November 2016, noting that the programme had “seen a 13-month extension to the assessment phase, followed by an additional 15 months to the demonstration phase.” 8 The MoD was also GVMXMGMWIHJSVEPPS[MRKXLIWYVJEGI¾IIXXS decline to such a low level that the Royal Navy would be seriously stretched if the tempo of operations was increased much above what it is now.9

REQUIREMENTS CREEP In a report that is relevant for the Type 26 frigate programme, or any defence acquisition programme for that matter, the US Government Accountability 3J½GI +%3 HIPZIHMRXSXLIUYIWXMSRSJ how broad requirements, which appear reasonable at the onset of a programme, often result in an acquisition disaster. 8LI8]TIMWSRISJXLI½VWXEGUYMWMXMSR programmes to be carried out under the guidance of the UK's new National Shipbuilding Strategy. The Shipbuilding Strategy is based on a report by Sir John Parker.10 Parker described the current situation with respect to UK naval vessels: “. . . fewer (more expensive) ships than planned are ordered too late. Old ships are retained in service well beyond their sell by date with all the attendant high costs of so doing. This ‘vicious cycle’ is depleting the 6S]EP2EZ]¾IIXERHYRRIGIWWEVMP]GSWXMRK the taxpayer.”11 The Shipbuilding Strategy announced the establishment of a client board, which will create “the opportunity to debate and agree priorities and then freeze requirements at the appropriate level, in the right time frames, with the requisite information available.”12 The strategy stressed that the MoD is “committed XS½\MRKTVSNIGXFYHKIXWSRGIXLIQEMR investment decision has been made” and XLIVI[MPPFI±VMKSVSYWWGVYXMR]XS½VQP] set the requirement …”13 The importance of trying to avoid requirements ‘creep’ in defence acquisition

is also apparent from the GAO report on the US defence acquisition process. The GAO conducted interviews with 12 current and former military service chiefs and vice chiefs and other current and former US Department of Defense (DoD) leadership to discuss the acquisition process and review programme execution information on all 78 current major defence programmes.14 Most service chiefs expressed concern that after weapon system requirements were turned over to the acquisition process, “requirements are changed or added by the acquisition community (sometimes referred to as ‘creep’), increasing the capabilities and cost of the system,” and they are “frequently caught by surprise when cost, schedule and performance problems emerge in programmes.”15 The GAO found that ‘creep’ in high-level requirements is rare, but that “it is after a programme has formally started development that the myriad lower-level technical requirements needed to complete a weapon system’s HIWMKREVIHI½RIH²16

ACCOUNTABILITY FOR OUTCOMES -XMWXLIHI½RMXMSRSJXLSWIVIUYMVIQIRXW which “leads to the realisation that much more time and resources are needed to build the weapon system.”17 The GAO stressed that it “has previously reported on the importance of conducting systems engineering early so that the consequences of high-level requirements can be confronted before a programme starts.” Several interviewees “noted that tradeoffs, informed by systems engineering, must take place before programmes start so that VIUYMVIQIRXWEVIFIXXIVHI½RIHERHQSVI realistic cost, schedules and performance commitments can be made.”18 Of relevance for the Type 26 frigate programme, the GAO reiterated its TVIZMSYWVIGSQQIRHEXMSRXS±HI½RIE shipbuilding approach that calls for (1) demonstrating balance among programme

requirements, technology demands and cost considerations by preliminary design review, and (2) retiring technical risk and closing any remaining gaps in design requirements before a contract for detailed design is awarded.”19 Several interviewees noted that after the programme is approved and system development has started, “requirements are frequently added or changed to increase the scope and capabilities of a weapon system beyond the requirements originally agreed upon when the programme started.” One interviewee cited an example where “programme SJ½GMEPWYRRIGIWWEVMP]GVIEXIHEPS[IVPIZIP requirement for an aircraft system that did not meet any validated operational need.” 20 Another interviewee commented that “requirements increases occur because programmes want to introduce the latest technology advances into a system, such as information technology and electronics equipment.” 21 An additional cause is XLEXXLIWIVZMGIGLMIJWGERRSX±MR¾YIRGI trade-offs between requirements and resources.” 22 The service chiefs also commented that “…requirements growth is a function of too many stakeholders within the DoD having the ability to MR¾YIRGIEGUYMWMXMSRTVSKVEQQIWQEOMRK MXHMJ½GYPXXSLSPHER]SRIEGGSYRXEFPIJSV programme outcomes.” 23 The GAO did not recommend a stronger role for service chiefs saying there was “little evidence this would improve programme outcomes.” 24 It stressed that acquisition experts have judged that “while WIVZMGIGLMIJWLEHWMKRM½GERXMR¾YIRGI on certain acquisition programmes in the past, their close involvement did not always result in successful cost, schedule, or performance outcomes.” 25 Instead, the GAO emphasised that ±VIUYMVIQIRXWEVIMRWYJ½GMIRXP]HI½RIH at programme start; when their full consequences are realised, trade-offs are harder to make — cost increases and schedule delays become the preferred solutions.” 26 The GAO noted it had


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GSRWMWXIRXP]IQTLEWMWIHXLIWMKRM½GERGISJ “the mismatch between the requirements JSVERI[[IETSRW]WXIQERHXLI resources — technologies, time and JYRHMRK°XLEXEVITPERRIHXSHIZIPST the new system” and that requirements, ±IWTIGMEPP]EXXLIPS[IVPIZIPWEVISJXIR RSXJYPP]HIZIPSTIHSV[IPPHI½RIH[LIR TEWWIHSZIVXSXLIEGUYMWMXMSRTVSGIWW at milestone B, at which time a system HIZIPSTQIRXGSRXVEGXMWE[EVHIHERHE programme begins.” 27 A graphical representation of the Type 26 (Copyright: BAE Systems)

TRANSLATING REQUIREMENTS The GAO report highlighted the I\EQTPISJXLI%VQ]´W*YXYVI'SQFEX System, where: “…requirements were WXMPPFIMRKHI½RIH[LIRXLITVSKVEQQI [EWGERGIPPIHFIKMRRMRKMREJXIV six years and $18 billion had been WTIRXSRMRMXMEPW]WXIQHIZIPSTQIRX 8LITVSKVEQQI[EWETTVSZIHXSWXEVX W]WXIQHIZIPSTQIRX[MXLWIZIROI] TIVJSVQERGITEVEQIXIVW8SQIIX XLIWIOI]TIVJSVQERGITEVEQIXIVW the programme ultimately translated XLIQMRXSSZIVPS[IVPIZIP VIUYMVIQIRXWFIJSVIMX[EWGERGIPPIH² 28 The solution highlighted by GAO was XLEXXLI±©XVERWPEXMSRSJSTIVEXMSREP requirements into technical weapon W]WXIQWTIGM½GEXMSRW[LMGLEVIMRJSVQIH F]W]WXIQWIRKMRIIVMRKWLSYPHXEOI TPEGITVMSVXSETTVSZMRKETVSKVEQQI at milestone B and awarding a contract XLEXPSGOWMRXLIVIUYMVIQIRXW8LMW EPPS[WXVEHISJJWFIX[IIRVIUYMVIQIRXW ERHVIWSYVGIWXSXEOITPEGIERHXLI IWXEFPMWLQIRXSJQSVIVIEPMWXMGGSWX WGLIHYPIERHTIVJSVQERGIGSQQMXQIRXW FIJSVITVSKVEQQIWKIXYRHIV[E]² 29 ,S[IZIVXLITVSFPIQMWXLEXXLI±© (S(SJXIRHSIWRSXTIVJSVQWYJ½GMIRX YTJVSRXVIUYMVIQIRXWEREP]WMWZMEW]WXIQW engineering on programmes to determine [LIXLIVXLIVIUYMVIQIRXWEVIJIEWMFPIERH XLIVIMWEWSYRHFYWMRIWWGEWIXSQSZI JSV[EVH4VSKVEQQIWEVITVSTSWIH[MXL YREGLMIZEFPIVIUYMVIQIRXWERHSZIVP]

optimistic cost and schedule estimates and, usually, participants on both the requirements side and the acquisition side EVIPSEXLXSXVEHIE[E]TIVJSVQERGI²30 8LI+%3RSXIHXLEXMRMXVIZMI[IH QENSVHIJIRGIEGUYMWMXMSRTVSKVEQQIW XLEXLEHLIPHTVIPMQMREV]HIWMKRVIZMI[W XLEX]IEVERHSRP]SJXLSWILEHLIPH HIWMKRVIZMI[WTVMSVXSXLIWXEVXSJW]WXIQ HIZIPSTQIRX[LMPIXLIVIQEMRMRK programmes completed or planned to GSQTPIXIHIWMKRVIZMI[WWSQIQSRXLW EJXIVXLIWXEVXSJHIZIPSTQIRX 31

SKILLS SHORTAGES 8LIJSPPS[SRUYIWXMSRMW[LIXLIV XLI(S([SVOJSVGIGERGSRHYGXWYGL EREP]WMW3RIWIVZMGIGLMIJRSXIHXLEX±XLI EGUYMWMXMSR[SVOJSVGIPEGOWI\TIVMIRGI in operation and tactical settings” and his VIUYMVIQIRXWGSQQYRMX]±PEGOWXIGLRMGEP EGUYMWMXMSRWOMPPW²32 The GAO commented that almost “. . . EPPSJXLIWIVZMGIGLMIJWWXEXIHXLEXXLIVIMW ERIIHXSJYVXLIVIRLERGII\TIVXMWI[MXLMR XLIKSZIVRQIRXERHWIZIVEPWTIGM½IH I\TIVXMWIMRW]WXIQWIRKMRIIVMRK7IZIVEP WIVZMGIGLMIJWMRHMGEXIHXLEXW]WXIQW engineering capabilities are generally PEGOMRKMRXLIVIUYMVIQIRXWHIZIPSTQIRX TVSGIWWERHHSRSXFIGSQIEZEMPEFPIYRXMP EJXIVVIUYMVIQIRXWEVIZEPMHEXIHERHER I\TIRWMZIERHVMWO]W]WXIQHIZIPSTQIRX programme is underway.”33 These issues are complicated by cultural

JEGXSVW8LI+%3RSXIHXLEXQER]±SJXLI WIVZMGIGLMIJWFIPMIZIHXLEXGYPXYVEPJEGXSVW ERHMRGIRXMZIW[MXLMRXLI(ITEVXQIRX QEOIMXHMJ½GYPXJSVTVSKVEQQIQEREKIVW to manage requirements growth and I\IGYXITVSKVEQQIWIJJIGXMZIP]² The +%3IQTLEWMWIHXLEXMXLEW±TVIZMSYWP] JSYRHXLEXMRGIRXMZIW[MXLMRXLIGYVVIRX acquisition process create pressure on HIJIRGIW]WXIQVIUYMVIQIRXWERHEVI KIEVIHXS[EVHHIPE]MRKORS[PIHKIWSEW RSXXSNISTEVHMWITVSKVEQQIJYRHMRK² 8LIWTIGM½G+%3VIGSQQIRHEXMSRW [IVIEWJSPPS[W *MVWXP]±EWWIWW[LIXLIVWYJ½GMIRX systems engineering expertise is EZEMPEFPIHYVMRKXLIVIUYMVIQIRXW HIZIPSTQIRXTVSGIWW²36 7IGSRHP]HIZIPST±EFIXXIV[E]XS QEOIWYVIWYJ½GMIRXW]WXIQWIRKMRIIVMRK is conducted and opportunities I\MWXXSFIXXIVHI½RIVIUYMVIQIRXW ERHEWWIWWVIWSYVGIXVEHISJJW FIJSVIETVSKVEQQIWXEVXW²37 The report concluded by noting that the DoD does not disagree with such VIGSQQIRHEXMSRW,S[IZIV±TVEGXMGI HSIWRSXEP[E]WJSPPS[TSPMG]²ERH ±MRGIRXMZIWI\MWXXLEXIRGSYVEKIHIZMEXMSR JVSQWSYRHTSPMGMIWERHTVEGXMGIW²38 The OI]TSMRXMWXLEXXLI(S(QYWXXVYP] JSGYWSRKIRIVEXMRKXLIVMKLXTVEGXMGIXS ±FIKMRHIZIPSTQIRX[MXLVIEPMWXMGGSWXERH schedule estimates, ultimately leading to MQTVSZIHSYXGSQIW²39


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%WXLI9/TVSGIIHW[MXLXLI8]TI JVMKEXITVSKVEQQIMXMWIWWIRXMEPXSIRWYVI XLEXSZIVEVGLMRKLMKLPIZIPVIUYMVIQIRXW EVITVSTIVP]XYVRIHMRXSWTIGM½GPS[IV PIZIPVIUYMVIQIRXWWSXLEXXLIJYPPI\XIRXSJ XLIGSWXXIGLRSPSKMGEPGLEPPIRKIERHVMWO are apparent. Drawing on the GAO analysis ERHXLII\TIVMIRGISJWIRMSVWIVZMGIGLMIJW ERH(S(SJ½GMEPWXLIXMQIERHIJJSVXXEOIR to conduct proper systems engineering to HIXIVQMRIXLIWTIGM½GVIUYMVIQIRXWSJXLI 8]TIJVMKEXIETTIEVXSFIIWWIRXMEPMR IRWYVMRKXLIWYGGIWWSJXLMWSVER]SXLIV HIJIRGIEGUYMWMXMSRTVSKVEQQIQ

FOOTNOTES

ABOUT THE AUTHORS Dr. Pete ItoLEWWIVZIHEWEPIGXYVIV ERHVIWIEVGLIVMRHIJIRGIEGUYMWMXMSREXXLI 'IRXVIJSV(IJIRGI%GUYMWMXMSR'VER½IPH 9RMZIVWMX]WMRGI,IIEVRIHE &EGLIPSV´WHIKVIIMR4SPMXMGEP7GMIRGIJVSQ XLI9RMZIVWMX]SJ'EPMJSVRMEEX&IVOIPI]E .YVMW(SGXSV PE[ HIKVIIERHE1EWXIVW HIKVIIMR-RXIVREXMSREP%JJEMVWJVSQ+ISVKI ;EWLMRKXSR9RMZIVWMX]MR;EWLMRKXSR(' ERHE4L(MR(IJIRGIERH7IGYVMX]JVSQ 'VER½IPH9RMZIVWMX]4IXI[SVOIHJSV ]IEVWEWE*SVIMKR7IVZMGI3J½GIVJSVXLI97 State Department.

Peter Antill rejoined 'VER½IPH9RMZIVWMX]EX7LVMZIRLEQMR .YRIXSGVIEXIEHIJIRGIEGUYMWMXMSR FSH]SJORS[PIHKIERHKIRIVEXIEGEHIQMG TYFPMGEXMSRWLEZMRKTVIZMSYWP][SVOIH MREWMQMPEVVSPIJVSQXS,I KVEHYEXIHJVSQ7XEJJSVHWLMVI9RMZIVWMX] MR[MXLE&% ,SRW -RXIVREXMSREP 6IPEXMSRWKEMRIHER17G7XVEXIKMG 7XYHMIWJVSQ%FIV]WX[]XLMRERHE 4SWX'SQTYPWSV])HYGEXMSRJVSQ3\JSVH &VSSOIWMR,MWMRXIVIWXPMIWMR I\EQMRMRKHIJIRGITVSGYVIQIRXERH PSKMWXMGW[MXLMRXLIVIEPQSJQMPMXEV]LMWXSV]

VITSVXXLIIUYMTQIRXTPEREWSJ

Ibid.

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2SZIQFIV 7. Ibid. ,SYWISJ'SQQSRW(IJIRGI'SQQMXXII Restoring the Fleet: Naval Procurement and the National Shipbuilding Strategy,' 2SZIQFIVTEZEMPEFPIEXhttps://

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'SRGIVRW6I¾IGX2IIHXS&IXXIV(I½RI Requirements before Programs Start+%3 .YRITEZEMPEFPIEXhttps:// [[[KESKSZEWWIXWTHJEWSJ 2SZIQFIV 20. Ibid. p. 8. 21. IbidTT 22. Ibid. p. 9. 23. Ibid. Ibid. p. 10.

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11. Op Cit4EVOIV³'SZIVMRK0IXXIV´T 12. Op Cit1MRMWXV]SJ(IJIRGIT 13. Ibid. p. 18. 97+SZIVRQIRX%GGSYRXEFMPMX]3J½GI

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Ibid. p. 11. 26. Ibid. p. 12. 27. IbidT 28. IbidT 29. Ibid. p. 16. 30. IbidT 31. Ibid. p. 17. 32. Ibid. 33. IbidT Ibid. p. 9. Ibid. p. 18. 36. Ibid. p. 20. 37. Ibid. 38. Ibid. p. 21. 39. Ibid.


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