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MOD Government Major Project Portfolio data, September 2016 (CSV)

Updated 18 July 2017
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Project Name A400M Airseeker Armour MBT 2025 Armoured Cavalry 2025 Armoured Infantry 2026 Army Basing Programme Army Reserve Development Programme Astute Boats 1-7 Carrier Enabled Power Projection Complex Weapons Contracting, Purchasing and Finance Core Production Capability Crowsnest Programme Cryptographic Enabling Services Future Beyond Line Of Sight Land Environment Tactical Communication and Information Systems Lightning II Programme Logistics Commodities Services Transformation Maritime Patrol Aircraft Maritime Sustainment Programme MARSHALL New Employment Model New Style of Information Technology (Base) New Style of Information Technology Deployed Nuclear Warhead Capability Sustainment Programme PROTECTOR Queen Elizabeth Programme Spearfish Upgrade Programme Successor SSBN The Materiel Strategy Type 26 Global Combat Ship Programme WATCHKEEPER Wildcat Programme
Department MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD MoD
IPA Delivery Confidence Assessment (A Delivery Confidence Assessment of the project at a fixed point in time, using a five-point scale, Red – Amber/Red – Amber – Amber/Green – Green; definitions in the MPA Annual Report) Amber Amber/Green Amber Amber Amber/Red Amber Amber/Green Amber/Red Amber Amber Amber/Red Red Amber Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Amber Amber/Red Amber Amber Amber Amber/Red Amber/Red Amber/Green Amber Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 24 of Freedom of Information Act 2000 (National Security) Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Amber Amber Amber/Green Amber/Red Amber Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Amber Amber
Description / Aims The A400M is a versatile airlifter able to perform and combine two types of duty: tactical missions directly to the point of need and long range strategic/logistic missions. To sustain the UK's airborne electronic surveillance capability previously provided by the Nimrod R1 aircraft. To upgrade and extend service life of the Challenger 2 Main Battle Tank, a key part of the Army's capability through to 2035. To deliver an integrated multi-role capability that will include the delivery of the AJAX armoured fighting vehicle and its training solution into service. To deliver an integrated Armoured Infantry capability that will include the Warrior Capability Sustainment Project and its training solution into service. To enable delivery of the Army 2020 force structure, including support to Service Personnel and their families and the provision of required accommodation and infrastructure in the UK, achieving the policy commitment to withdraw the Army from Germany by 2020. The utilisation of Reservist Units by the Army as part of efficiencies in the Armed Forces laid out in the White Paper 'Reserves in the Future Force; Valuable and Valued'. The design, development and manufacture of up to 7 Astute class submarines The scope of the core CEPP Programme is the QEC Carriers, the F-35B Lightning II and the CROWSNEST capability for the Multi-role Merlin. The main focus is the successful delivery of a Carrier Strike capability which is assessed to be the most technically challenging and Force stressing requirement. The other elements of fighting power (amphibious capability and the support shipping) will be managed as key dependencies. The aim is to deliver a successful UK Carrier Strike capability by the end of 2020 followed by enabling the broader CEPP capabilities. To realise an improved, affordable and dynamically adaptable military Complex Weapons capability which protects sovereignty and assures operational advantage and contributes to prosperity. CP&F will provide a single online end to end procurement system for all MOD procurement activity. All other processes especially paper based systems will be either replaced or subsumed. The phased regeneration of the current nuclear core production facilities on the Rolls-Royce Site at Raynesway in Derby, the sustainment of the Core Production Capability (CPC) and the production, development and manufacture of the nuclear reactor cores to meet Pressurised Water Reactor 2 and Successor technical specifications. Equips 10 Merlin Mk2 helicopters with an advanced airborne surveillance system to meet the requirement for early threat warning and co-ordination of aircraft. To support the Department’s information assurance capability. To maintain the current satellite communications network and develop successor capability. The LE TacCIS Programme will sustain, evolve and where appropriate replace tactical communication and information systems used across the Land Environment. This includes man-portable systems, those mounted on platforms and those in deployed headquarters. To deliver a multi-role, carrier-capable aircraft, to be operated jointly by the Royal Air Force and Royal Navy. The Logistics, Commodities and Services (LCS) Operating Centre in MOD provides commodity procurement, storage and distribution services for the Armed Forces. The LCS(T) programme is designed to undertake a major reform of the LCS, developing a service of the right size for current military requirements and reducing cost through upgrades to both the inadequate current facilities, and the modernisation of the processes in operation. To deliver a Maritime Patrol Aircraft (MPA) to provide persistent, responsive, effective and adaptive Military Capabilities in the Under Water, Above Water, Littoral and Land environments. The Military Afloat Reach and Sustainability (MARS) Tankers will replace the current single hulled tankers operated by the Royal Fleet Auxiliary. To provide a Terminal Air Traffic Management capability for Defence that will ensure that core Air Traffic functions continue to be provided, obsolete equipment is replaced, and new regulatory conditions are met. To design and deliver a New Employment Model for Regular and Reserve Service Personnel. To deliver a cost-effective and modern ‘New Style of IT’ across the Defence estate. The provision of an IT system which will deliver operational information service to Land, Air, Maritime and Joint users in all physical environments. 1. To deliver and sustain the capability to underwrite the UK stockpile now and in the future including transition to Mk4A and to have the capability required for a future warhead if required. 2. To develop and deliver essential science, technology and production capabilities and critical skills to enable AWE to operate, maintain and certify the safety and performance of the Trident Holbrook warhead.3. To develop and deliver the UK stockpile to the Mk4A warhead (production, skills, science) approved design.4. To deliver facilities, skills, production and science capabilities required to maintain the current warheads and support a possible future warhead. 5. To deliver the new hydrodynamics facility – TEUTATES/EPURE The PROTECTOR Programme will deliver a future UK capability for deep and persistent armed surveillance, target acquisition, and reconnaissance. To deliver 2 Queen Elizabeth Class aircraft carriers. To update the UK's submarine heavyweight torpedo: safety improvements are required to ensure residual risks remain as low as reasonably practicable and improved performance is required against increasingly capable threats. The design, development and manufacture of 4 Successor SSBN Class submarines. To design, orchestrate and implement transformational change within Defence Equipment and Support, in order that it can operate more effectively and efficiently within a simplified and improved Acquisition System. To deliver an interoperable, survivable, available and adaptable capability that is operable globally within the maritime battle space to contribute to sea control for the Joint Force and contribute to maritime force projection and Joint Force command and control with the flexibility to operate across and within the range and scale of Contingent and non-Contingent operations. This 8 ship programme will deliver Anti-Submarine Warfare capability to protect strategic assets, sustain national shipbuilding capability and increase resilience of the Naval Service. WATCHKEEPER is an unmanned aerial vehicle (UAV) platform that will provide battlefield surveillance and reconnaissance capabilities to the land tactical commander within the Joint Operations environment. The Wildcat aircraft has been developed to meet the twin requirements for a dedicated small helicopter for deployment in the Maritime (Surface Combatant Maritime Rotorcraft), and the Littoral and Land environments (Battlefield Reconnaissance Helicopter).
Departmental commentary on actions planned or taken on the IPA RAG rating. The Programme remains on track to meet all outputs by the planned Programme closure date, but carries risk against certain capabilities. Airbus Defence and Space are working to design an aircraft modification to rectify this issue. The cumulative effect of delays to aircraft deliveries and fleet-affecting technical issues (most notably in the Propeller Gearbox) have compressed timescales for testing of UK aerial delivery equipment. In mitigation, the Programme Board continue to utilize UK equipment for Airbus Defence and Space core trial work when other nations are unable to fulfil their allotted commitment. This has reduced some of the UK’s test requirements. The AIRSEEKER Programme continues to deliver a world-leading Signals Intelligence (SIGINT) capability with tangible results being seen operationally. The third and final aircraft shortly will be delivered ahead of schedule, completing the fleet. Full Operating Capability is on track to be declared December 2017, pending some Release to Service and Integrated Test, Evaluation and Acceptance work. There are challenges surrounding manpower, particularly the recruitment and retention of appropriately-skilled Linguist personnel. Crews are currently operating with fewer than the full complement of Linguists. However, a number of short-term mitigations, as well as a longer term strategy, are being developed. Once these manpower issues are resolved, the programme is a candidate for GMPP graduation The recent Programme Validation Review (PVR) has proposed minor revisions to the overall structure of the Armour MBT 2025 Programme, of which Challenger 2 Life Extension Project (CR2 LEP) is the principal Project. These revisions make no amendment to the CR2 LEP itself. The Delivery Confidence Assessment for the Programme has remained steady since the programme's inception. In order to improve the IPA RAG grading, we have increased the size and capability of the PMO. The recommended governance structures are now in place; the overall programme Delivery Confidence will improve once the re-cast of the AJAX equipment contract has been formalised. The Delivery Confidence Assessment has been downgraded to Amber/Red due to a number of challenges, notably stabilising the demonstration phase. The focus for Financial Year 2016/2017 has been to stabilise the programme costs and schedule with a focus on the equipment Defence Line of Development (DLOD), while continuing to progress other DLODs including training, information and infrastructure to ensure the delivery of coherent capability into service. Progress has been made in refining the Programme Artefacts. In particular the development of a more robust Programme plan with a detailed Higher Level Programme Schedule and an improved understanding of the critical path. This will be key to improving the overall programme Delivery Confidence Assessment. The confidence rating improved from Amber/Red to Amber. This reflected improvements made within the programme and the understand of the challenges still ahead; a significant task was the re-baselining of the Army Basing Programme against a backdrop of the removal of £60M from the Financial Year 2016/17 in March and a continued uncertainty from A2020 Refine and Footprint Strategy announcements that have brought delays to in year progress. However, significant milestones were reached including the signing of the PAC (Project Allenby Connaught) Contract, the appointment of a “preferred bidder” for the SPTA housing project amongst others. The programme is mature and continues to progress delivery of capability to meet the Army's transformation requirements. Attention is now focused on benefits delivery and realisation. This includes reaching Full Operating Capability of the Reserves Directorate to provide the enduring governance for benefits realisation, implementing changes under Army 20202 Refine and creating the conditions for continuing development of Reserves beyond the end of the programme. HMS Artful continues to make good progress on her road to Operational Readiness and Boat 4 (Audacious) remains on-track for launch in Q2 17. Boat 5 is now under a full boat contract and is progressing to schedule. Complex negotiations to secure full boat contracts for Boats 6&7 are on-going and are expected to be complete at the end of Q2 17. Overall affordability remains the programme’s key challenge. Delivery of the Programme remains challenging as we transition from the ‘build phase’ of the projects, through trials and testing into operational service. Contractor sea trials for the first carrier, HMS Queen Elizabeth, are planned to commence in Summer 2017. Pending evidence from successful sea trials, Programme delivery confidence will likely remain Amber. The Department will need to be wary of increasing delivery risk by adding activity to an already taut schedule. As recognised in the recent NAO Report into ‘Delivering Carrier Strike’, the top 10 CEPP Risks are being actively managed and mitigated through robust governance and programme controls that ensure coherence of the core projects and their key dependencies with the rest of Defence. At Q2 2016/17 the IPA Delivery Confidence still reflected their assessment made in December 2015 that successful delivery of the Programme appeared feasible but that significant issues existed requiring management attention. Since this review, its recommendations have been systematically addressed in regular consultation with the IPA. Another review was held in June 2017. The latest IPA review was conducted week ending 10 February 2017. An plan to address the 6 recommendations has been prepared. The recommendations primarily relate to ensuring that action is taken quickly to progress the next Release, in terms of scope, resourcing and benefits realisation. The ‘Red’ Delivery Confidence Assessment is due to a Forecast Cost to Completion (FCAC) in respect of the original Scope of Work, which is predicted to exceed the original Main Gate Approval by some £250M. Recognising that the additional Core H Re-fuel and Resilience (CHRaR) scope of work, which (including an amended FOC of 15 May 2028) received a later separate approval, is currently forecasting below its approval, the combined FCAC is circa £235M above the single combined approval. Approval will be sought mid-2017 for the increased spend, giving the programme stability and a more appropriate commercial strategy. Delivery confidence was reduced to AMBER due to extended contract negotiations post Main Gate approval and the potential for it to impact delivery. Following Q2 report the prime contract with Lockheed Martin was let on 30 Nov, and parallel work has ensured delivery milestones remain on track. This is leading to growing delivery confidence. Exempt under Section 26 of Freedom of Information Act 2000 (Defence) The Sep 16 IPA Assurance of Action Plan (AAP) raised 6 recommendations; all were accepted and are being actively implemented and managed. Those that are critical were: Establish delivery of the capability on to a programme footing which is being driven by Joint Forces command through establishing an SRO Support Team to start work in Jan 17. Manage the governance and transition from BLOS (current capability) to FBLOS (future capability) which is being managed through monthly BLOS/FBLOS governance meetings. Acquisition Partner to be appointed ASAP, which has not yet been appointed, although is being augmented through the Framework Approach for Technical Support (FATS) to provide immediate resource uplift. The MOD accepts the recommendations made in the review of the LE TacCIS programme in April 2016 and is working to address them. A further external review is likely to be undertaken in late 2017 by which time the programme would expect a more favourable RAG rating based on the significant work done in the interim and the increased maturity of the programme as a whole. The Lightning Programme delivery confidence remains as AMBER. Several emergent issues have added more pressure to timely delivery of the Programme, but mitigation plans are being developed to treat these increasing risks and issues. These include delays in simulator software, and issues relating to Mission Data Reprogramming . Following dialogue with the US Programme leadership on these matters, the UK’s programme has the requisite support to resolve these issues to meet the IOC date on time. Finally, a lack of manpower remains a concern to delivery of the programme - particularly in the DE&S area; however, the overall manpower situation has improved as the Royal Navy have now agreed to provide personnel to the Australia, Canada, UK, Reprogramming Lab (ACURL). Notable successes include high Delivery Partner (DP) performance, improved commodity provision, increased operational outload capacity and a successful build of the new Defence Fulfilment Centre. The DP and MOD agreed the Forecast of Expenditure (FE) by the start of Contract Year (CY) 3 on 01 April 2017 Benefits against the MGBC have been eroded through: Firstly reduced demand against the Global Removal & Movement Service (GRMS) contract. Secondly, a slippage in the integration of information systems due to technical challenges. This is under negotiation and DP and will be concluded as part of the FE process. Work continues to develop the strategy to exploit the considerable potential for LCST to deliver further benefit. This is focused on widening the scope of commodity acquisition and inventory management that sits within the LCS(T) contract. Since the last reporting period, there has been a maturing of the infrastructure plan, with an information note describing the approach to approvals (submitted 9 Dec 16) and leading to a review note to be submitted during Q2 17/18. An ABC17 option has been submitted to align manpower profile to the aircraft delivery schedule, which de-risks the build-up to initial operating capability. The overall programme assessment remains at amber due to the number of challenges, dependencies and uncertainties that lie within the programme. Complexities in the build of the first ship Tidespring have resulted in delays. This is reflected in the Q2 RAG rating. Technical difficulties have now been resolved and the ship has now been completed and is on its delivery voyage. Lessons learned from Tidespring are expected to ensure any further delays to ships 2 to 4 are minimised. Air Traffic Management (ATM) service availability remains strong. Equipment re-capitalisation programme has serious generic problems, compounded by complicated and parallel activities. Information Note and Review Note submitted, spelling out issues identified and remedial actions. 9 months of remedial activity, planning, and approvals related assurance required to generate a re-baselined schedule. Contractor and DE&S have added considerable additional resource to address project and risk management shortfalls. SRO has led investigations and workshop activities to identify root cause issues and create conditions for these to be addressed. Issue is Time, not Cost or Performance; safety is not affected. Civil Aviation Authority extension to the delivery of Mode S cooperative surveillance agreed. Contractor has agreed to support the drawdown, as planned, of military maintainer staff. The programme has worked closely with both the Infrastructure Projects Authority and Defence Portfolio and Approvals Secretariat in 2016/17 which culminated in the exit of NEM from both the Government and Defence Major Project Portfolio’s in Dec 2016. This recognised the progress NEM has made and reflects the robust plans in place to close the programme by end of Dec 2017. NEM was not a savings exercise, rather its objective was to modernise the offer (supporting lifestyle choice and domestic stability) while also fixing elements of policy that were proving a known barrier to retention. It has delivered a suite of projects (initiated in SDSR10) that has delivered positive changes to the terms and conditions of service for Armed Forces personnel. Now in the final stages of delivery, having implemented the majority of its components, the programme is expected to close by the end of 2017, with transition continuing to the nominal end-of-life of the programme in 2020 and beyond. Beta testing of the new Office 365 service continues and over three thousand users have been migrated. Amber assessment recognised the continuing effort to stabilise Beta and maintain sustainability of the live rollout plan at the intended pace and volumes. Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 24 of Freedom of Information Act 2000 (National Security) Exempt under Section 26 of Freedom of Information Act 2000 (Defence) At Q2 16/17 insufficient manpower across the programme, in a variety of appointments drove confidence in achieving the IOC milestone to remain AMBER. Planned action throughout Q3 16/17 has marginally improved manpower, but not yet to a level that affects the delivery confidence. Planned activity to address the overall force structure within the PROTECTOR programme includes the commissioning of an independent manpower study, led by the Defence Scientific Technology laboratories (DSTL) and increased fill of established programme posts. The challenges to procurement to include US export regulations add complexity to the programme and support the assessment of a delivery confidence of AMBER. Planned activity to address this has involved consistent engagement through the creation of a governance regime with the US System Program Office (SPO) and this is expected to mature throughout 2017. The IPA described seeing much progress since the last review, its Amber assessment was based on issues around: HMS Queen Elizabeth’s First Entry to Portsmouth (FEP); cost clarity; manning requirements; the Common Support Model (CSM) business case and support in the Solent when unable to enter port. These actions are being progressed through the stakeholders and included in Holding to Account discussions. FEP will now be a comparatively low key event with a later ceremonial event. A comprehensive assessment of Programme costs has been produced. Manning is being successfully managed based on continued prioritisation. Plans for support in the Solent will be implemented as we gain experience of operating HMS Queen Elizabeth from her home port. Delivery Confidence Assessment is primarily affected by: • dependency on the Combat System Weapon Thread programme (to modify the submarine combat system interface) to enable delivery of the full warfighting capability of the upgraded weapon; • progression of design maturity of the weapon upgrade, in particular the guidance link; and • availability of submarine platforms to conduct torpedo trials. To ensure necessary governance of the important dependency on the Weapon Thread programme, it has been added as an Equipment Line of Development to the SFU Programme Board. The MoD is working with industry to improve collective performance on the Dreadnought programme. Proposals are being explored for a new commercial and organisational model, between the MoD and the two key industrial leads BAE Systems and Rolls-Royce. In addition, to strengthen arrangements for the procurement and in-service support of nuclear submarines the new Submarine Delivery Agency was announced on 3 April 2017. This new body will be established as an Executive Agency of the Department, alongside the Defence Equipment & Support organisation, by no later than April 2018. To support and lead transformation to full Agency status, Robert Holden CBE has been appointed as Chair of the Board and recruitment for the Chief Executive has commenced. The programme has also now been renamed Dreadnought. A comprehensive Transformation Implementation Plan for FY 16/17 was approved by the DE&S Executive in September 2015. This plan is structured around three major Transformation themes: the implementation of a People Model; the introduction of a Balanced Matrix for staff deployment; and use of a common Process and Control Framework throughout the organisation. An Integrated plan for FY17/18 has been developed to further embed the changes across DE&S. The Delivery Confidence Assessment reflects the good progress to date but recognises the challenges associated with embedding the changes while maintaining business outputs coupled with ensuring the financial benefits are realised. This is being mitigated in the FY 17/18 plan through the accelerated adoption of the new Processes, increased communication and engagement, and focussed benefit realisation activities. Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) he Programme received an IPA AMBER rating on the 30th September and since then, recommendations associated with this rating have been addressed fully by the programme by November 2016. The overall DCA remained AMBER due to concerns over training and the achievement of a Release to Service. The Wildcat programme has continued to progress positively with the continued growth of both Army and Navy capabilities. Tangible progress is being made to resolve the remaining programme challenges including the synthetic Aircrew Training Equipment
Project - Start Date (Latest approved start date) 17/05/2000 18/03/2010 04/12/2014 04/12/2014 04/12/2014 22/05/2013 01/12/2014 17/03/1997 31/01/2011 31/03/2008 01/12/2011 01/04/2012 31/03/2013 Exempt under Section 26 of Freedom of Information Act 2000 (Defence) 01/01/2011 01/05/2013 01/10/2001 01/08/2011 08/07/2014 25/07/2005 03/04/2006 02/05/2011 01/04/2015 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) 01/04/2008 30/04/2009 01/12/1998 01/04/2008 14/04/2011 02/05/2011 21/07/2008 01/03/1998 01/12/2001
Project - End Date (Latest approved end date) 31/03/2022 01/04/2018 01/06/2026 30/04/2025 31/12/2026 31/03/2020 01/01/2017 31/03/2024 01/12/2030 01/04/2032 31/03/2018 15/05/2028 30/06/2023 Exempt under Section 26 of Freedom of Information Act 2000 (Defence) 31/12/2041 01/12/2035 31/03/2035 01/02/2018 01/04/2024 30/04/2018 04/10/2020 01/10/2021 05/03/2018 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) 30/04/2025 31/05/2023 31/03/2023 31/03/2024 Exempt under Section 35 of Freedom of Information Act 2000 (Formulation of government policy, etc.) 01/05/2018 31/12/2034 03/07/2017 31/05/2016
Departmental narrative on schedule, including any deviation from planned schedule (if necessary) The forecast end of the Programme remains unchanged. The Transfer of Title of the UK’s 11th aircraft took place on 13 Sep 16 and the Medium Term Support Contract on 30 Nov 16. This 10 year contract, with a 5 year firm price, will provide support at RAF Brize Norton, down-route and on deployed operations for the next 10 years. The contract provides a far more comprehensive level of support to that provided by the initial entry into service contract and has taken into account learning and improvements from this first phase. However, aircraft availability and crew training has been affected by an issue with the aircraft’s Propeller Gearbox. This, combined with a software integration issue that affected the bespoke 4 aircraft UK retrofit project, delayed the Programme milestone associated with the ability to operate in non-benign environments (scheduled for Jun 16). This was fully achieved in Feb 17, with an interim capability for 2 aircraft achieved in Nov 16. The Programme is on schedule and although manpower issues have the potential to delay the FOC declaration, it is expected that FOC will be declared in December 2017. The principal element of the programme remains the CR2 LEP. Two bidders are on contract as at 3 Jan 17 for the competitive Assessment Phase (cAP) The programme is well-placed to meet its schedule. The programme is running a concurrent Demonstration and Manufacture Phase, which adds significant risk to the programme; this is being managed. IOC is not affected at this stage and remains Q2 2020. The programme is on track to deliver the planned capability to performance, cost and time. The equipment project (Warrior Capability Sustainment Project (WCSP)) remains on the critical path. The current forecast is for a 12 month slip to equipment delivery. Forthcoming negotiations with the Prime Contractor will be key to addressing this and will determine the impact of the equipment delivery schedule on the achievement of Programme milestones. The Programme has exceeded the SDSR10 targets to return 50% of Service Personnel from Germany by 2015. To date almost 16,400 service personnel (82% of the planned total) have returned to the UK, and all remaining moves are planned to complete by 2019. The hand back of estate in Germany is proceeding to plan with over half returned by the end of 2015. The ABP has been impacted by the Better Defence Estate (Nov 16) announcement and the emerging detail of Army 2020 Refine, leading to financial re-profile and programme schedule re-baseline. Further work to refine continues with several projects expected to retire, with the focus remaining on delivery of critical “live and eat” infrastructure. The most recent Project Assurance Review concluded that whilst attaining the April 2019 target remains a challenge the programme is on track to realise the wider benefits of a Capable, Useable and Integrated Army Reserve and should graduate from the GMPP. The programme was removed from the GMPP on 5 June 2017. The IPA and SRO have agreed that final programme closure should be conditions based and SRO intent is to formally close the programme before the end of 2019 once the programme transition to BAU is fully completed. The build schedule for Boats 4 and 5 has remained stable throughout 2016. Boat 6 and 7 schedules were subject to delay through late delivery of certain components. The future schedule of delivery will be formally reviewed during the Boat 6-7 approvals process to ensure that it is practically and financially achievable. The Project ‘baselined’ end date remains December 2030. However, the current forecast end date is December 2026, reflecting the point at which the Full Operating Capability of CEPP is planned to be achieved. The Amber RAG status reflects the significant risks and issues which exist in a number of areas, plus the technical challenge of taking a ‘first of class’ complex warship to sea for the first time. The objectives issued by the SRO are the key to improving the Delivery Confidence Assessment and keeping the programme on schedule, by promptly addressing the risks and issues. This appears feasible at this stage. The Complex Weapons programme remains on track to deliver its key projects as described in the Mandate. IOC, or Release 2, was delivered on 2 December 2016. As an IS enabled change programme this has involved both technical and business change work-streams. The technical delivery has provided a stable platform and the associated business process changes (involving over 10,000 users) have worked well in some areas with residual problems persisting elsewhere due to the complexity of the acquisition system and scheme of delegation. Progress to resolve these issues is yielding improvement. Since the start of system cut-over, £6.4Bn has been paid to suppliers. In the first two months since go live 83,000 invoices, 24,000 requisitions and 23,000 purchase orders have been processed. The new system provides a material improvement to the internal control framework and the foundation for the Release 3 capability. Currently planning is on-going with the Industry Partner to determine approach and timeframe for the delivery of Release 3. The original baseline project closure (end date), expected Regeneration of the production facilities at Rolls-Royce Raynesway to be complete by 19/03/2023. When the Business Case for an additional core (Core H Re-fuel and Resilience - CHRaR) was approved, it became necessary to defer some Regeneration activities for circa 5 years (date at approval – date now). This deferment is not on the critical path to deliver H cores, or the first Dreadnought core. Key programme milestones remain unchanged. Exempt under Section 26 of Freedom of Information Act 2000 (Defence) All key milestones are within the 50% confidence level approved by IAC in Jun 16, although the SRO has noted that slippage of Acquisition Support Partner is a concern and is pressing for swift resolution. Multiple dates exist to cohere the delivery of benefits across a collection of projects and a sub-programme. The LETacCIS programme will close when sufficient transformation in the target operating model has been institutionalised through evolutionary development. At the time of publishing this report the conditions for transitioning to business as usual through evolutionary development was still being defined LE TacCIS is a transformational change programme that will ‘information enable’ the Land Environment in the full conduct of operations. It is initially based on an opening up of the communications architecture across a number of currently stove-piped systems such that, in the future, upgrades can be conducted on a spiral basis across system boundaries whilst being more reactive to changes in requirements and at lower cost. This will allow UK MOD to retain its technological advantage. The programme is therefore evolutionary by design with projects already delivering capability change. It will continue to exploit new technology and integrate it into the open architecture; for this reason, there is no programme closure date. The programme is on schedule to meet its milestones. The schedule for the UK F-35 delivery remains taut but on track. As a result of the IS delay, the DP will now reach Full Operating Capability on 31 Mar 19 which is in line with the MGBC 90% confidence date of 5 Apr 19, instead of the 50% confidence date of 01 Jul 18. There has been no change to any of the programme milestones or the overall programme schedule. Programme milestones have not been included. The details of the build-up of the MPA force have not been publicly revealed for security reasons. Delays in the build have impacted on milestones and a Review Note was issued 23/09/16 revising Tidespring ISD and Full Operating Capability (FOC). With the major delay centred on the first ship the delivery drumbeat of ships 2 to 4 is likely to tighten adding pressures to RFA manpower constraints. Programme delivery continues to lag behind schedule; approximately 60% of in-year planned progress achieved. Previous re-baselined Schedule has failed to arrest continued slippage. Further re-baselined schedule covering Initial Operating Capability and Full Operating Capability delivery will be presented for Approval in Sep 17. ATM Services delivery remains strong. There has been no affect on ATM capability. The original programme baseline date for closure of the programme was 1 Oct 2021, reflecting the inclusion of transition protection and benefit realisation monitoring activity within plans; however with the establishment of a central Programme Management Office supporting the People Portfolio, the programme is able to release its remaining resource and handover benefits realisation monitoring to business as usual mechanisms earlier than originally anticipated. However, many of the benefits of NEM will not be fully realised for a number of years and this is reflected in the business case which details a 10 year benefit profile to 2020/21. Beta testing and migration continue, with over three thousand users using the new service (Office 365 using sovereign data centres). Beta has been extended and will include additional users to ensure maximum benefit is realised from the Beta phase. Commercial negotiations with the supplier continue to ensure best value for money. Live service was achieved on 21 April 2017 with these activities delaying the milestone from end of 2016 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 24 of Freedom of Information Act 2000 (National Security) Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Main Gate was achieved Jun 16, 2 months behind the baseline date of Apr 16, despite this there are no assessed changes at Q2 16/17 for either IOC or FOC of the PROTECTOR programme, however IOC RAG assessment remains AMBER due to the delivery confidence issues relating to US export regulations and shortfalls in manpower . FOC1 (May 23) relates to the PROT core programme, a further milestone (FOC2) will be defined for the PROT Enhanced additions. Challenges exist within HMS Queen Elizabeth’s near-term schedule, with technical issues on several systems presenting risk to the Ships Staff Move-on Board and Ready for Sea Date programme milestones. The Ship’s Company and Aircraft Carrier Alliance are working closely to manage these serials. HMS Prince of Wales’ schedule has further to run and lessons from HMS Queen Elizabeth are being incorporated. Project end date (delivery of all Mod kits) remains 31 March 2024. However, as mentioned in assessment of delivery confidence, the full realisation of the warfighting capability is dependent on the delivery of the Weapon Thread element (the platform connection from the weapon to the combat system). Although a representative from this parallel project now attends the SFU programme board, this work-stream is managed as a critical dependency and remains outwith the scope of the SFU project itself, which has limited influence over delivery timescale of that element. Dreadnought Boat 1 commenced production on time in Sep 16 following approval for an 18 month Delivery Phase 1. This reflects the phased approvals strategy announced in SDSR 15. The programme met its FY16/17 milestones and is on plan to meet its 17/18 milestones. The programme end date is aligned to the end of the Managed Service Provider Contracts. Exempted under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Due to the realisation of a training risk the SRO has taken the opportunity to delay the projected FOC 1 date and synchronise a number of Programme outcomes Initial Operating Capability has been declared for both Army and Navy Wildcat variants within planned timescales and good progress continues towards delivery of the Full Operating Capabilities. The Wildcat Programme is on track to deliver the agreed dates.
2016/17 TOTAL Baseline £m (including Non-Government costs) £274.39 £91.41 £6.37 £317.43 £87.84 £306.85 £197.57 £574.91 £1.58 £729.35 £35.88 £197.36 £53.35 Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) £168.54 £808.53 £92.62 £7.37 £126.84 £124.78 £95.15 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) £993.19 £13.78 £601.84 £39.95 £844.76 £91.21 £293.23 £43.16 £13.16
2016/17 TOTAL Forecast £m (including Non-Government costs) £292.57 £102.98 £5.57 £309.07 £68.09 £294.50 £202.55 £529.82 £1.33 £719.57 £30.93 £197.20 £53.36 Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) £169.38 £888.46 £115.27 £5.57 £126.84 £124.39 £92.37 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) £1,026.97 £15.28 £593.27 £40.02 £859.84 £91.21 £292.99 £40.77 £12.67
2016/2017 Variance %age 7% 13% -13% -3% -22% -4% 3% -8% -16% -1% -14% 0% 0% Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) 0% 10% 24% -24% 0% 0% -3% Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) 3% 11% -1% 0% 2% 0% 0% -6% -4%
Whole Life Cost TOTAL Baseline £m (including Non-Government costs) £3,614.94 £759.84 £744.79 £6,248.64 £1,612.72 £2,009.48 £1,856.75 £9,869.71 £21.81 £21,355.09 £146.74 £1,700.07 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) £11,148.48 £13,383.07 £652.44 £2,132.49 £596.38 £1,769.14 £211.07 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) £20,310.57 £929.34 £7,400.08 £416.08 £31,614.29 £379.07 Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) £1,116.75 £1,609.23
Departmental narrative on budget/forecast variance for 2016/17 (if variance is more than 5%) In Year, the unfavourable programme variance of £18.2M is predominately attributable to Foreign Exchange losses, the cost of which is scored to MOD centrally rather than to the programme or Air Domain. Budget variance of £11.6m (£3.2m RDEL and £8.4m CDEL) is primarily attributable to the continuing foreign exchange rate volatility. The current cost pressures are within approvals. Forecast was re-profiled to reflect a minor schedule amendment due to a slight delay of Contract Award. There will be a year 1 impact and budget and forecast will be aligned by the next decision point (-£0.6M). Other net minor revised cost estimates (-£0.2M). Budget Variance less than 5% Variance of -22% is mainly as a result of the delays in the WCSP Demonstration Phase, caused by issues relating to demonstration vehicle. Budget Variance less than 5% Budget Variance less than 5% The variance to budget reported in 2016/17 at Q2 was c. £45M below CT. This is predominantly due to a challenge being placed on the project to deliver £35M below CT in this Financial Year. The remaining £10M of variance is due to the fund for the baselining of capabilities being costed against the Astute Class Support project at the time of this report, whereas it should have been against build. These costs represent the marginal costs of running the CEPP Programme Management Office. The budget variance reflects the Department’s initiative to reduce operating costs by 15% this year. Budget Variance less than 5% Baseline figures included an allocation for risk mitigation, but the programme’s allocated control total did not include this and so it was not forecast. Budget Variance less than 5% Budget Variance less than 5% Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Budget Variance less than 5% The reason for the FY16/17 forecast to budget variance is due to the Exchange Rate with the US Dollar. As at 30/09/16 the FY 16/17 forecast included £27m expenditure on the Defence Fulfilment Centre (DFC) that moved from FY 15/16 to FY 16/17. The DFC cost was firm priced so re-profiling from FY 15/16 to FY 16/17 does not impact the overall cost of the project. Realism applied to forecast Budget Variance less than 5% Budget Variance less than 5% Budget Variance less than 5% IY variance is due to an underspend in FY 15/16, due to the re-profiling of some activities into the current FY, and resultant costs rolling across Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 27 of the Freedom of Information Act 2000 (International Relations) Exempt under Section 41 of Freedom of Information Act 2000 (Information Provided in Confidence) The variance in Q2 16/17 against the current year is -1.500M and is predominately related to FOREX movement. In addition, FOREX remains a factor on variance throughout the period. Despite a significant IY variance, the overall variance across the 10 year total remains less than 1% due to equipment savings. Budget Variance less than 5% Budget Variance less than 5% Budget Variance less than 5% Budget Variance less than 5% Budget Variance less than 5% Figures drawn from Q2 when a budget variance was predicted, this has now been closed to within 5% as year closure approaches. Budget Variance less than 5%
Departmental Narrative on Budgeted Whole Life Costs The costs are broken down into the following areas: a. production of aircraft; b. Support costs (i. Airbus Defence and Space Support/Airframe Support (Airframe Medium Term Contract, Airframe Design Services Contract), ii. Engine Support (Engine medium Term Contract, maintenance Level 3 Contracts, Engine Design Services Contract), iii. other Support (inc DAS Support, Mission Planning Support and DE&S support and commodities), iv. Infrastructure Support; c. Training Costs; d. other minor projects. Budget forecasts are considered to be mature and accurate; however, the strategy for the utilisation of Liquidated Damages (LDs) is still being considered, and the long term support costs arising from any capability insertions funded by LDs will need to be fully explored. Budgeted whole life costs for the AIRSEEKER Programme cover the delivery of 3 RIVET JOINT aircraft, associated Ground Equipment and modification to existing infrastructure, together with sustainment costs up to the programme Full Operating Capability of December 2017 and the closure of the Delivery Programme in April 2018. This will deliver a rapidly deployable airborne capability configured to provide effect across the spectrum of operations until at least 2035. The headline budget and whole life costs for the programme have remained at c.£744M throughout the reporting period. Less c.£40M for infrastructure, these costs are solely for the AJAX project which will deliver the Demonstration, Manufacture and In-Service Phases for the AJAX family of armoured vehicles and the associated training systems. The figures are fully and independently assured. The headline budgeted whole life cost for the programme has reduced from c.£6.8Bn to c.£6.2Bn during the reporting period (Q2 2015/16-Q2 2016/17). This is mainly as a result of a directed cost-saving ABC16 Option, savings as a result of the Extended Initial In Service Support contract, and a downward revision of project costs. This has been partly offset by additional funding required for cannon integration. The headline budgeted WLC figure has reduced as a result of the decision to remove the Armoured Battlefield Support Vehicle (ABSV) project as a directed cost-saving in ABC16. This has been partly off-set by WCSP increased forecast costs as a result of delays in the Demonstration Phase, Manufacturing costs will follow once the Demonstration phase is stabilised. ABP is a CDEL capped programme with limited RDEL budget. CDEL is used to pay for the capital construction of new infrastructure assets, RDEL is used to fund the physical costs of moving Army personnel, their dependents and equipment under the ABP programme. Operating costs of new infrastructure is funded by DIO Service Delivery therefore ABP do not track the WLC of the projects with the exception of Project Allenby-Connaught where the WLC out to 2041 are in the region of £891M. The cost of the current budgeted Whole Life Cost of the programme remains affordable at this stage. The programme costs are subject to regular scrutiny both by the Programme Director and the Army Director of Resources to ensure continued affordability. The Whole Life Cost of the programme will continue to be reviewed in line with the Annual Budget Cycle process and reported upon accordingly. The budget above reflects the control total issued to the Astute Build Programme. The reduction to the previous report is as a result of delivery of a £40M savings and SEPP efficiencies being banked within FY 15/16. The Whole Life Costs above reflect the marginal costs of running the CEPP Programme Management Office over the life of the programme. The Whole Life Costs for the constituent projects (QEP / Lightning II and CROWSNEST) are reported within their own Programme submissions. With effect from Q1 2016/17, financial reporting has been re-cast to cover the whole pipeline, rather than just the post Main Gate component, and Category A to D programmes (previously Categories A and B only). It includes the cost of the Complex Weapons pipeline across the CADMID (Concept, Assessment Development, Manufacturing, In-Service, Disposal) cycle, including the cost of In-Service Support. This gives a more accurate view of the pipeline, but presents a significant, but artificial, change from last year’s report. Since Q2 2016/17 forecast costs have grown marginally, but remain within the baseline. The WLC baseline remains the same. Budgeted Whole Life costs include the up-front investment (demonstration and development) and then on-going support costs e.g. licence and hardware maintenance support costs over the 10 years. A re-baselining of the CPC programme has been endorsed by the IAC. This will ensure that the project has a more robust bases of cost estimates, is aligned to the latest programme and has a more appropriate approvals and commercial strategy. The conclusions of the re-baselining work are scheduled to report back to the iAC in mid-2017. The CROWSNEST programme remains within its Approved Budgetary Limit. Exempt under Section 26 of Freedom of Information Act 2000 (Defence) Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) The MOD has identified LE TacCIS as one of the most important change programmes in the Land Environment and is investing accordingly. The Department will become significantly less reliant on large prime contractors and the 'lock-in' that can result. This new approach therefore represents the best value means of Defence retaining an operational advantage by leveraging new technologies, with value for money and adopting a more agile approach to spiral development through life. The funding will be used incrementally to introduce modern technologies as existing radios, computer systems, user devices and applications reach obsolescence. Critical will be the ownership by MOD of the Intellectual Property Rights and the system design. a. Production (main production phase of approved a/c buy due to be completed in 2026). i. Includes Aircraft and Equipment procurement. ii. Through life capability development and obsolescence management. iii. Op Sovereignty Capabilities. iv. UK contribution to Production, Sustainment & Follow-on Development b. System Design & Demonstration. i. Common JSF Design and Demonstration against UK URD. ii. UK Unique Development & Integration (including Ship, Weapons and Main Operating Base) iii. Initial Operational Test & Evaluation iv. Safety. c. Sustainment d. Public Sector technical Support. e. Packages of work at RAF Marham to enable site re-organisation to accommodate Lightning. f. DIO Infrastructure. As at 30/09/16 the total whole life implementation costs are forecast to be £647m, reflecting a small reduction from the Allocated Budget of £652m. Forecast net benefits over the 13 Year appraisal period of £402m reflect an improvement on the Target net benefits of £336m. However this will be impacted by the IS slippage explained above Whole Life Costs reflect the MGBC remaining within the total. 'no variance at Q2 Changes at the end of the Annual Budgetary Cycle round in spring 2016 (ABC16) re-set budgets. Further re-profiling likely following re-baselining. Whole Life Costs unlikely to change after the programme baseline is reset, Sep 17. The Whole Life Costs of £211.07m reflects an amalgam of staff costs, IT change budget, costs incurred by DIO to conduct accommodation surveys, external support/assistance and costs to provide pay protection for those moving to the new pay model. In 2016/17 the programme will underspend by a total of £2.78m against the original in year baseline, and by an estimated £13.09m (6.2%) over the full 10 year profile. This is due mainly to scope change and the lack of IT reference data which led to an over estimation of costs. WLC within budget Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Exempt under Section 27 of the Freedom of Information Act 2000 (International Relations) Exempt under Section 41 of Freedom of Information Act 2000 (Information Provided in Confidence) Due to the maturity of the programme the budgeted WLC, specifically the Contracted Logistics Support (CLS), remain based on pre-MGBC studies and assumptions. Development of the CLS Solution to be delivered through a predominately DCS contract and a small FMS contract for sensitive equipment, has not yet reached sufficient maturity to allow formal costing activity to take place. The Q2 estimated increase in cost of building the Carriers remains stable. Additional funding for the 10-year support budget change to operating one ship at Very High Readiness and one at High Readiness is being accounted for within Navy Command’s control total. Project forecast to deliver within budget and within IAC Approval. The cost envelope covers the upgrading of essential elements of the existing weapons, timed to coincide with their routine maintenance. The programme estimate contained within SDSR 15 provided for a 35-year period and includes a £10bn contingency. The incremental approval approach has continued with Delivery Phase 1. The approved transformation Whole Life Costs include provision for Managed Service Provider support and additional DE&S staff costs. All approved costs have been assured by CAAS. The programme is on track to outturn within the approved budget. Exempt under Section 43 of the Freedom of Information Act 2000 (Commercial Interests) Only costs to Full Operating Capability(FOC) are represented; mid life obsolescence work planned for the next decade are not. The Wildcat Programme incorporates the procurement of the aircraft, some initial provisioning spares and training equipment (simulators and courseware). Support and other training-related costs are funded separately through the Wildcat Integrated Support and Training (WIST) contract.