1. www.corda.co.uk © BAE SYSTEMS 2010 1 Meeting the challenges posed by the current defence environment A paper presented at 27 th ISMOR Judith Rawle and John Mountain September 2010

2. www.corda.co.uk © BAE SYSTEMS 2010 2 Introduction Affordability Outsourcing of military support Public and legal constraints Challenges for the Analytical Community

3. www.corda.co.uk © BAE SYSTEMS 2010 3 The Challenge of Affordability 3 "The defence program is entirely unaffordable -- especially if we try to do what we need to do in the future while simultaneously doing everything that we've done in the past.“ Dr Liam Fox UK Secretary of State for Defence at the Farnborough Air Show 20 July 2010

4. www.corda.co.uk © BAE SYSTEMS 2010 4 EP05 The UK Equipment Procurement Plan is Unaffordable £10Bn £2Bn £4Bn £6Bn £8Bn Total Costs 06/0711/1216/1721/2226/2731/3236/37 Financial Years Best Case (+1.5% p.a.) Worst Case (-2% p.a.) EP09

5. www.corda.co.uk © BAE SYSTEMS 2010 5 Some underlying reasons Just to sustain the existing equipment capability requires a real terms increase in procurement expenditure Behaviours of the military, officials, and industry Conspiracy of Optimism If you are honest you lose “the system is failing to produce the equipment we don’t need.” – humorous quote by senior MOD official in the Bernard Gray report Delay and slippage Changing the Force Structure 5

6. www.corda.co.uk © BAE SYSTEMS 2010 66 Can we achieve savings? Countries that share more functions across the armed forces tend to derive greater efficiencies. Administrative costs can be reduced without sacrificing fighting power. There is dramatic variability in the cost of maintaining a fleet. “ Lessons from around the world: Benchmarking Performance in Defense” McKinsey on Government Spring 2010 From discussions across the Department and in industry it is clear that savings to date due to support process reform and improvement may have only “scratched the surface”. “ Review of Acquisition for the Secretary of State for Defence” October 2009 Bernard Gray

7. www.corda.co.uk © BAE SYSTEMS 2010 7 Transferring Support Activities to Industry

8. www.corda.co.uk © BAE SYSTEMS 2010 8 Consequences of increasing the reliance on contractors in support of operations “Increasingly, we will find ourselves reliant on industry for support, both in the home base and in theatre, if we are to be adaptive.” Future Character of Conflict “The great thing about a soldier is if he doesn't show up, you can shoot him. You can't shoot contractors. You can sue them, but you can't shoot them.” Jayson Spiegel

9. www.corda.co.uk © BAE SYSTEMS 2010 9 Our Duty of Care to the Armed Forces Danger: Soldiers at Work

10. www.corda.co.uk © BAE SYSTEMS 2010 10 Increasing Media Pressure “a serious failure to recognise and take appropriate steps to address the difficulty he had in adjusting to the climate” “To send soldiers into a combat zone without basic equipment is unforgivable, inexcusable and a breach of trust between the soldiers and those who govern them.” “This court has heard evidence of the failure to provide basic equipment for the maintenance of vehicles, which has been described by one witness as amounting to a gross or serious failure” “The crew and passengers were not to know that this aircraft, like every other aircraft within the Nimrod fleet, was not airworthy. What is more, the aircraft was, in my judgment, never airworthy from the first release to service in 1969 to the point where the Nimrod XV 230 was lost” “This cavalier approach to safety must come to an end”

11. www.corda.co.uk © BAE SYSTEMS 2010 11 Increasing Media Pressure “a serious failure to recognise and take appropriate steps to address the difficulty he had in adjusting to the climate” “To send soldiers into a combat zone without basic equipment is unforgivable, inexcusable and a breach of trust between the soldiers and those who govern them.” “This court has heard evidence of the failure to provide basic equipment for the maintenance of vehicles, which has been described by one witness as amounting to a gross or serious failure” “The crew and passengers were not to know that this aircraft, like every other aircraft within the Nimrod fleet, was not airworthy. What is more, the aircraft was, in my judgment, never airworthy from the first release to service in 1969 to the point where the Nimrod XV 230 was lost” “This cavalier approach to safety must come to an end”

12. www.corda.co.uk © BAE SYSTEMS 2010 12 Increasing Public Pressure

13. www.corda.co.uk © BAE SYSTEMS 2010 13 Constraints on weapon use Environmental constraints Carbon footprint of armed forces The effect of Sonar on Whales Banning of weapon types Anti-personnel mines Cluster Bombs Laser Blinding weapons

14. www.corda.co.uk © BAE SYSTEMS 2010 14 The Legal Framework for Operations “One thing we are worried about is the legal framework that currently applies to war. If you want to use armed forces legitimately, in the way we have in the past, we must look again at the law underpinning its use” General Sir David Richards UK Chief of the Defence Staff (designate) Interview with Prospect magazine July 2010 14

15. www.corda.co.uk © BAE SYSTEMS 2010 15 Challenges for the Analytical Community Current evidence-based decision making hasn’t stopped the defence programme becoming unaffordable Do we need to move more towards a risk and portfolio management approach? Should we be looking at methods and techniques to address: Assessing implications of increased “duty of care” Assessing the likely consequences of use of weapons Quantifying operational risks from out-sourcing support Driving out costs in the support area Including contractors in deployment and sustainment plans Taking on the role of integrators of all analysis Using a balance of “hard” and “soft” methods Comments?