Edinburgh Napier University

  The subject of this thesis is an examination and evaluation of the effectiveness of Smart Procurement Initiative which was announced in the Strategic Defence Review. Much has been written over the last twelve years about MOD project overruns, caused allegedly by the incompetence and culture throughout the MOD at this time. After a thorough literature the validity of this statement is tested and found to have some grounding but problems also stem from the nature of military procurement notably the relative power of suppliers, the difficulties of predicting technology growth and implementing new technologies.
Further as world military operations change resulting in changing requirements for weapons platforms and associated equipment changing specifications are frequently encountered causing the phenomena of "project creep" to legitimately arise. One of the most encouraging features of the SMART procurement initiative is that it embraces the need to change the culture and should allow the better incorporation of technology change. The solution to these cultural and project overruns problems are thought to be the creation of Integrated Project Teams. These teams aim to bring together all the relevant stakeholders from the Ministry of Defence, armed forces and industry.
A great deal has been written on the perceived benefits these teams will bring to the procurement process in their management of a project from 'cradle to grave'. In this thesis the reasons for project overruns are examined by considering past and present experience using a variety of mediums including literature reviews, observation and face to face interviewing of senior MOD employees. The effectiveness of the implementation of integrated project teams (IPT's) is examined using interviews, case accounts and a survey of team leaders.
The findings are, Smart Procurement has since its implementation had some successes mainly within its land and armored vehicles. This degree of success is based on a substantial amount of historical data that forecasters have used to predict future cost trends; this data has not been as technological advanced as the air force or navy therefore targets have been easier to meet.
Unfortunately in the other two areas of the MOD the navy and air force, the speed in which technology is advancing has resulted in confusion to what capability is required and for what purpose, these indecisions has lead to continual specification changes of projects resulting in project creep. This project creep represents a major cause of cost overruns and rising costs. Furthermore, the culture throughout the senior level of MOD is driving these indecisions of uncertainty, It is difficult to see how new technology can be acutely forecasted when the capability is not being defined at the start of the CADMID cycle due to these indecisions at senior management level.
To add to this confusion, MOD senior management are not getting the value for money they continual insist that is sought due to their reluctance to tender competitively. They continually single source companies such as- Rolls Royce, Thales and Marconi's. This leads to stagnation in suppliers and those companies contracted tend to be monopolistic leading to the MOD being fully dependent on their equipment and costs associated with that equipment.