Monday, 28 July 2014
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UK defence trade body defends government on manufacturing

Defence trade body ADS has brushed off accusations by unions that the government was committing a ‘stunning betrayal’ of British manufacturing.

ADS — which represents UK aerospace, defence and security companies — welcomed the Ministry of Defence’s (MoD’s) white paper released yesterday that proposed to protect the research budget and make procurement more transparent to help small businesses.

An ADS spokesperson told The Engineer that the government’s stated aim of buying equipment through open competition on the global market didn’t represent a shift in policy and had effectively been in place since the 1980s.

Rees Ward, chief executive officer of ADS, said in a statement: ‘Her Majesty’s government has long espoused open competition as its main acquisition method and industry is comfortable with this approach.

‘The question is how it is implemented in practice… industry believes that each procurement should be evaluated against criteria [that] ensure that our armed forces’ needs are met, and the value-for-money test includes the benefits to the economy as a whole rather than any narrower measure.’

Unite national officer Ian Waddell said: ‘This is yet another stunning betrayal of British manufacturing. The government has learnt nothing from the fiasco at Bombardier when it put Britain’s last train maker at risk in favour of a rival European manufacturer.’

The white paper also proposed maintaining science and technology spending at least at the current 1.2 per cent of the MoD’s budget, representing more than £400m each year.

The document set out the MoD’s intention to help all UK-based suppliers promote their products abroad by building exportability into procurement criteria, improving government coordination and providing training in dealing with overseas customers.

The government also wants to increase opportunities for small- and medium-sized enterprises (SMEs) by making the procurement process more transparent, simpler, and faster, and engaging with companies at an earlier stage.

In addition, the MoD is evaluating the potential benefits of appointing an official to head up a government security authority, referred to as a senior responsible owner (SRO).

Defence equipment minister Peter Luff said: ‘Britain’s smaller businesses are the breeding ground of genuine innovation, developing new technologies that provide our front-line forces with battle-winning advantage.

‘Last year the MoD spent almost £1bn directly with smaller businesses and we want to see that figure grow.’

ADS said the white paper’s proposals on technology, increasing exports, supporting SMEs and the idea of a government head of security were particularly welcome.


Readers' comments (3)

  • MoD SHOULD BE FAVOURING AND PROVIDING SUPPORT TO UK SUPPLIERS- WHERE SIGNIFICANT EXPORT REVENUE-POTENTIAL EXISTS!!!

    Even if the 'MoD "will not favour UK suppliers'", only plain stupidity would allow this policy to be extrapolated to a govt-practise where UK firms' promising projects are not supported and/or are deliberately neglected with the result that projects which could reasonably have been expected to generate many millions- or billions- of pounds for HM Treasury* end up being cancelled...

    (* along with substantially enhancing UK firms R & D + industrial-competence profiles world-wide)
    =================
    =================

    EXAMPLE: F-35 Fighter's Engine programmes:

    UK's planned-to-be-purchased F-35 Fighters WILL NOT be powered by Rolls-Royce/GE F136 engines: under pressure from U.S. Department of Defense, RR/GE have canceled programme!!:

    Excellent analysis and background facts:

    http://www.defenseindustrydaily.com/the-f136-engine-more-lives-than-disco-03070/

    The UK's coalition govt states that it wants to cultivate UK jobs and innovation- aimed at the export market...

    Why couldn't the UK find the comparatively paltry sums required for the completion of the F-35 Fighter programme's Rolls-Royce/GE F136 engine???????

    Surely, the value to the UK of F136 engine (and sub-assembly parts) exports and the consequential world-wide promotion of the UK's high-technology business capabilities would compensate for any taxpayer funds put towards the completion of the F136 engine programme????
    -------------------------------------

    Additional reference links:

    "Joint Strike Fighter: Implications of Program Restructuring and Other Recent Developments on Key Aspects of DOD's Prior Alternate Engine Analyses", September 14-2011:
    http://www.gao.gov/new.items/d11903r.pdf -

    Page # 2: "... While there have been significant changes made to the (F-35) JSF aircraft and (its 2) engine programs, (the U.S. Department of Defense) DOD has not updated its funding projection and has no plans to do so...

    "DOD has not done a complete analysis of the potential life-cycle costs and benefits of the competitive engine strategy in over 4 years...

    "A cost-benefit analysis is an important tool for making investment decisions.

    "... DOD's $2.9 billion funding projection
    through 2016 comprises only a portion of the information that would be needed for such an analysis.

    "DOD maintains that while there have been significant changes made (recently) to the JSF aircraft and engine programs, there is still not a compelling business case to continue supporting both engines, and DOD does not plan to update its cost-benefit analysis...

    "Thus, whether a more current, comprehensive analysis that includes all life-cycle costs, benefits, and risks would result in a more definitive business case- one way or another- remains an unanswered question...

    "We continue to believe that acquisition decisions should weigh both near-term and long-term costs and benefits and that an updated analysis would provide important information for making these decisions..."
    ------------------------

    "F-35 Alternate Engine (F136) Program: Background and Issues for Congress",April 20-2011:
    http://www.fas.org/sgp/crs/weapons/R41131.pdf

    "F-35 Joint Strike Fighter (JSF) Program:Background and Issues for Congress", April 26-2011:
    http://assets.opencrs.com/rpts/RL30563_20110426.pdf

    "JOINT STRIKE FIGHTER- Restructuring Places Program on Firmer Footing, but Progress Is Still Lagging", May 19-2011:
    http://www.gao.gov/new.items/d11677t.pdf

    "Proposed termination of F-35 (F-136) Alternate Engine program", February 18-2009:
    http://www.fas.org/sgp/crs/weapons/RL33390.pdf

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  • Surely, no matter what the product, if it is British designed and / or manufactured, the purchasing choice is a no-brainer unless performance is poor. The financial advantage gained by tax income from British workers (income, duty, NI and VAT) as well as not paying benefits to otherwise unemployed workers, must make it cheaper to buy British almost at any cost. The economy will then benefit and the population will feel valued again! Come on Government, look at the REAL cost of buying abroad.

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  • UK Defence procurment policy has justifiably been defined as "Lowest price at any cost"

    This is inevitable when from 1997 to 2010 the purpose of Government spending- and one is tempted to say the whole of our economic plolicy was to keep millions in made-up well paid well pensioned public sector jobs. There is no money left to procure properly; our soldiers have been killed due to the failure to equip them properly (surely a case of corporate manslughter in any other walk of life ?)

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