Lord Jim wrote:If we take AFVs for example. We want a new MBT. A british company bids for the contract but has to modify an existing design and totally revamp and expand its production line to manufacture the platform in the UK, and has those costs as part of its bid. An overseas company also bids and has a platform that meets all the UK's requirements already in production and after the cost of adding UK specific equipment is able to deliver the MoD a saving of 20% including a support package. So both platforms are equal in performance and support costs but the MoD would save 20% buying overseas. Which should the MoD buy?
If the foreign supplier meets
all of the MoD's requirements,
and the MoD picked up the right requirements, then the foreign supplier. However, the example shows your bias. You always assume that the UK bid is inferior and more expensive and that you can clearly and easily compare them directly. In the real world that is rarely the case and you may have to factor in the costs of altering contracts, meetings between supplier and customer, differences in culture and a bundle of other things that are not set out in the requirements.
Lord Jim wrote:I know that being UK manufactured doesn't automatically mean that an item is more expensive but it is usually the case as we have little manufacturing capability left in the UK, remember the Ajax plant is for the assembly of components manufactured elsewhere. If we still had to manufacturing capacity we had then the playing field would be simpler but using MoD procurement and support contracts to reduce the welfare bill or allow companies to build manufacturing plants from scratch seems idiotic when out military is so underfunded.
We've got heaps, but we don't support it like other countries do.
Lord Jim wrote:Do we know who paid for the plant in Wales that will assemble the Ajax? If it was the UK Government, which Department(s) were involved. If it was spred accross a number of interested parties then I have no problem, but if the set up costs were borne totally by the MoD as part of the contract I am not. If the cost is spred acroos various governemtn departments the total cost to the Government remains the same, but it has less impact of the MoD's finances and that is my key issue. Again I am not saying we should not by British but that if it costs more to do so the MoD should not shoulder the premium and that other Departments must play their relevant parts.
Do we know who demanded it?
Lord Jim wrote:As for how the carrot and stick approach works well at present on a £10 contract a company will get £10 if simply delivered even if late, £11 if delivered on time. There is no real penalty for going over budget or delivering late.
Then the problem isn't in the carrot/stick approach, its in the ability to set out a £10 contract. If there is a risk of being stung £1 then the suppliers will account for that and you'll end up paying £11 for a £10 contract. Especially if you set yourself up in an adversarial fashion.
Lord Jim wrote:The UK's procurement woes are not all down to industry, the MoD and Government do not help themselves, but that is a seperate arguement.
I fail to see how or why you should separate that argument.
However. This is going a long way off a wheeled APC (which is Boxer, being made in the UK, by existing British Manufacturing assets). Perhaps a new or existing thread elsewhere on how to fix procurement woes?