Commerce vs. Defence Irreconcilable Differences? Matt Minshall CSL Defence Interest Group 27 April 2005.

Commerce vs. Defence

Irreconcilable Differences?

Matt Minshall

CSL Defence Interest Group

27 April 2005

IntroductionIntroduction

The aims of defence and industry are fundamentally different. With acceptance of this premise democratic governments try

to manage a defence capability in which the armed forces, the administration and

industry work in synergy to the mutual benefit and satisfaction of all parties.

AimAimThe aim of this short presentation is to

highlight the fundamental differences between defence and industry – based on the current situation in the UK - and to suggest ways of bringing the elements together in a way that

satisfies all requirements.

Four ElementsFour Elements

The First ElementThe First Element

1. The Government is the first element - being the ultimate owner of all defence

matters. It provides a defence ministry as the agency which attempts to bring the

elements of Industry and Defence together for mutual benefit and satisfaction

The Political DilemmaThe Political Dilemma

• The Government tries to be all things• Provide a defence capability• Support UK Industry • Maintain the manning levels of the civil

service• Allow open competition• Satisfy the need to spend less• Key player in global peace brokerage

The Two Central ElementsThe Two Central Elements

2. Defence3. Industry

Requirement of Defence CapabilityRequirement of Defence Capability• Aims

• Protection of the Mainland• Protection of interests overseas• Support of foreign policy• Support to NATO• Support to the UN• Support to Allies

• Means• Deterrence• Operations Other Than War• War

• Needs• Proper funding and support• Relevant equipment

Overview of Industry RequirementsOverview of Industry Requirements• Aims

• Profit• Reputation• Increase or maintenance of business• Expansion

• Means• Saleable credible and reliable products• Good marketing

• Needs• Money• Contacts• Client base

Divergence of InterestDivergence of Interest

Product Defence = Peace and security£ Industry = Profitx Common ground = Nil

The AimThe Aim

The Aim is the Key

Defence ProcurementDefence Procurement

• C Concept

• A Assessment

• D Demonstration

• M Manufacture

• I In-Service

• D Disposal

From the Concept comes the aim

Military Military ConceptConcept Analysis Analysis

Let A = Task Let B = Threat Let C = Requirement

So A + B = C

Government Concept Development

Let C = Committee Let H = Hiatus Let N = Nugatory Let O = Omnidirectional

After at least seven committees Creating five hiatuses Three nugatory studies And six changes in direction The Government has changed the simple military

requirement - C - to make: C7 H5 N3 O6

The Government MalaiseThe Government Malaise

DefenceRequirement

Industry SolutionGo to

MOD/DPA/DERA/QINETIQ/CIVIL

SERVICE/TREASURY/

PROTECTION OF SELF INTEREST/

FAIR COMPETITION/JOBSWORTH

FIREWALL

Defence solution

ComplexIncomplete Compromise

Why is there Divergence?Why is there Divergence?

Measures to protect the system from itself creates the Malaise

Defence Misspending and Mismanagement Defence Misspending and Mismanagement Symptoms of the MalaiseSymptoms of the Malaise

• Strategic• Technology vs. Credible Land, Air and Sea

Forces

• Tactical• Future Command and Liaison Vehicle

Defence Misspending and Mismanagement The Malaise - Strategic

•Following the US lead billions of pounds have been allocated and spent on technology

•Aim by 2020 is for the forces to have1000% the effects

•50% of the size

•10% of the logistics

•50% of the cost

•How?

•Distancing the battlefield

•Robotic weaponry and logistics

•Long Range Smart Munitions

•Computer Management

Defence Spending Defence Spending ComparisonComparison

0

5

10

15

20

25

30

35

40

45

UK USA

Percentage of WorldGDP

Percentage of World'sDefence Spending

Sources: New York Times; Le Monde; World Bank; Stockholm International Peace Research Institute

Defence Misspending and Mismanagement The Malaise

Tactical

AFV 430

CVRTSAXON

Land Rover

Future Command and Liaison Vehicle - FCLV

Defence Misspending and Mismanagement The Malaise

Tactical

FCLV – Mobile, Armoured, 5 seater, BOWMAN compatible and within a limited budget

Worst Trial VehicleWithin Budget

<50% CompliantNew vehicle

Best Trial VehicleWithin Budget

>85% CompliantReliable proven pedigree

Requires trailer for many rolesUnder armoured

3 Seater (with BOWMAN)So far cost is around 20% over Best Trial Vehicle cost

9% cheaper – Purchase cost

When C is confused the aim is When C is confused the aim is lostlost

Results are a loss of synergy

Loss of SynergyLoss of Synergy

• Aims• Management• Demands on Time and Money• Consultants

The Fourth ElementThe Fourth Element

• 4. Sound consultancy can be the solution

Defence requirements

Defence Capability

Needs

CommercialNeeds

Defence Solution

Government

Industry

Armed Forces

Sound

Consultancy

Irritants to The MalaiseIrritants to The Malaise

• Budgets• Technology• Outdated mindsets• Non SMEs• The Committee Syndrome• Innocent Quangos• The need to be “fair” – Open competition

The Return to Synergy and the Way The Return to Synergy and the Way

ForwardForward • Courage• Reaffirmation of the aims• Lateral thinking• Positive support• Constructive criticism• Integrity• Accountability

Future Roles for Defence ConsultantsFuture Roles for Defence Consultants

Helping the MOD to help itselfHelping the MOD to help itself

• Pre-emptive assistance at the right level

• Acting as the honest broker

• Filling the gaps

SummarySummary

• Identifying the malaise• Working with the system

• Shaping the future

Questions?