The Rules of Procurement

Well, this blog has been running for over a week now. It looks like my more defence-based posts are more popular than my politics rants. I'd like to say "Hi" to the people who've swung by from the MoD. Hope you don't know who I am!

Anyway, enough preamble. I've had a hunt around for an interesting Defence story today.

I found this story quite interesting. It's certainly a pretty damn clear example of how the UK isn't the only country that can't do procurement in a sensible manner.

This particular contract demonstrates lots of the age-old procurement problems, that affect all countries pretty much equally.

It shows how the cool, sexy stuff like new Ships, Fighter Jets and Missiles are fairly easy to procure. The boring, staid stuff that wins you wars like ISTAR, AAR and anything logistics based is mostly ignored and felt that it can be pushed to the right for as long as wanted. The US is using currently using Stratotankers. The last of these was delivered in 1965, making the youngest and shiniest of this fleet a mere 44 years old. Sure, they also fly a few of the bigger, newer (and presumably shinier) KC-10s, but these are nearly outnumbered 10-1 by the Stratotankers.

OK, so it's pretty clear that despite this being a pretty boring capability, it's increasingly becoming an urgently required piece of kit.

Most people reading this will probably know that this contract was already awarded back in 2008. The Northrop / Airbus system, offering lots of manufacturing done in the South of the US managed to fairly comprehensively beat the Boeing system, which offered lots of manufacturing in the North-West of the US.

Well, this throws up another universal law of procurement. You can't spend all your time thinking about which system is the best, you've got to weigh up the relevant work-share.

In this case there was another fun element. I'm sure you've already spotted the convenience of the timing of the last 'decision' and the relevant political leanings of the two areas chosen for each companies' work. Well, Boeing threw their toys out of the pram, The USAF responded (Screw You)in a surprisingly robust manner.

Rule: You can't rely on being based in the same country as the person making the decision, sometimes you'll be beaten by a cheaper foreign product.

Eventually the selection process was restarted. This was then stopped, by Gates, to give the incoming administration a chance to redesign the selection process however they wanted.

Another Rule: Politicians will always demand their say. They'll also make the whole process take too long and simultaneously be unable to make a decision.

Well, the contest has now been redesigned. The 800 requirements that existed before have been pared down. Now some aren't even mandatory. Whenever I wrote requirements, I made damn sure that you had to have a bloody good reason to bend any.

Let me pull a quote from that article: "Northrop has argued that the Air Force's decision to pare the requirements to 373 mandatory ones and 93 non-mandatory ones puts significant issues like the fuel offload rate for the airplanes on the same level with less serious issues like the water flow rate in on-board toilets."

We're now back exactly where we were earlier. Before Boeing were bitching about the USAF picking the bigger plane, now the other side are bitching about their strengths being ignored (at the same time I'm also ignoring the amusing story about how the USAF were basically expecting Boeing to offer a 777 derivative, rather than try and use this deal to keep the 767 production line open. Fuck me, by the time this is finished, we'll have 787 derivatives on offer!)

Rule: Stupidity is not confined to the Military

Sure, it would be fun to point and laugh at the Americans. Normally the saying goes "Fast, Cheap, Capable: Pick Two". However, as they've taken so much time to make this decision (and no doubt pissing more money up the wall in the process) they'll manage to get into a situation where they don't hit any of those basic points.

But there's no point laughing. Are our people and processes really any better?