David Gould Chief Operating Officer DE&S

1. David GouldChief Operating Officer DE&S From Project Management to Capability Management 4 October 2007

2. DE&S Mission “To equip and support our Armed Forces for operations now and in the future.”

3. Initial Gate ISD In-Service Date Main Gate The Challenge For The Future C A D M I D Concept Assessment Demonstration Manufacture In-service Disposal Military User To deliver innovation throughout the equipment lifecycle SPONSOR USER DE&S delivering true through life equipment capability

4. Astute – The Causes • Programme difficulties first reported by BAES in 2002 • Underlying problems stemmed from: - Implementation of a new Computer Aided Design (CAD) package - A break in the submarine build programme after VANGUARD Class • Led to cost increase ~ £1Bn for Boats 1-3 • Delay to ISD of 3.5 years

5. Astute – The Solution • Feb 2003 new contract structure agreed • between BAES & MoD to: Reduce risks and • incentivise BAES to perform. • Some of the key changes include: • Stabilised Technical Baseline • Programme Baseline re-established • Cost baseline re-established • Improved Project Management via use of Anchor Milestones and Earned Value Management (EVM) • Stabilised Management at BAES Submarines

6. Nimrod – The Causes • Prevailing environment at Contract signature • Adversarial • Low Price dominating decision making • High Company Financial risk assumed in price • Fixed price contract • Mistaken assumption cost risk transferred to Company • No insight into costing detail and level of Company risk • Over confidence in managing low technology issues • Design / Production concurrency • Weak Project Control System

7. Nimrod – The Solution • Production paused pending design maturity • TCIF Framework introduced • Common goals • Providing an environment for P / C / T trading • Partnering behaviour • Openness, trust and a sense of mutual respect • Project Control System rebuilt • Independently accredited • Demonstrably used to inform decision taking • Shared Company / DPA training • Realistic Risk provision

8. 1. We lay down the seeds of success early 2. We maintain an awareness of the financial, commercial and technical status of our project 3. We do not underestimate the impact of risks or overestimate our ability to manage them 4. We do not destroy the integrity of the solution through uncontrolled changes, and we preserve a through life view of the solution 5. We ensure our project remains immune to the effects of staff change 6. We do not commit to performance, time and cost boundaries for a project to deliver a solution that we do not understand or which has undefined limits 7. We do not purport to understand a problem unless we are able to demonstrate analysis of it 8. We actively manage all our customers and stakeholders, regardless of organisation boundaries 9. We do not assume our contracts or agreements to be an irrelevant formality 10. We establish a common understanding of expectations with our Industry partner DE&S Project Delivery Charter

9. Emphasis shifting to rapid acquisition, based on system engineering and technology insertion

10. What happens when we get it wrong? EFFECT OF TECHNICAL MATURITY ON PROJECT DELAY Slippage (% project duration) 60 C130J Projects considered in prior study 50 Merlin Mk 1 Interviewed during this diagnostic LPD(R) 2 R = 94% 40 30 TRL at MG is highly correlated with subsequent project performance on schedule slippage. Brimstone 20 SIFF 10 Bowman Merlin Mk 3 0 -10 C17 -20 -30 0 2 4 6 8 10 (Estimated) TRL at MG TRL – Technology Readiness Level MG – Main Gate, main investment decision

11. The Exploitation Challenge Equipment Project Technology Maturity In Service Delivery Main Gate Initial Gate HIGH RISK RISK CAUTIOUS “Valley of Death” Science & Technology Research Time

12. Why innovate in Defence? • Counter the immediate threat • Counter emerging threats • Deliver capability more effectively • Increase Force Protection • Conforming to latest treaties and regulations

13. Innovation Direction • Internal Research • Wholly MOD Funded • MOD internal planning only • External research (Supplier Base) • Jointly funded to encourage dual use • Increased collaboration • More openness and publication of technology requirements/supplier • Through Life Capability Management LESS IN HOUSE MORE EXTERNAL SUPPLY

14. Sustaining Innovation The MOD Challenge: Is to make best use of competition and partnering to allow innovation to feed into equipment throughout its life. Our Collective Challenge: Is to encourage and exploit innovative ideas from SMEs & Universities on larger products through life. • Application of research to projects will remain a fundamental requirement – Exploitation. • Encourage Universities, SMEs and primes to work closely together through technology demonstration programmes and DTCs. • SMEs and smaller contractors are also vital, strong in direct support through smaller innovative products (power sources, IED disposal).

15. What is DE&S doing about it? • Close co-operation with SIT (single R&D plan) • Cluster DG’s technology plans • SIT partners from DSTL • Through Life Capability Management

16. Systems Engineering and Autonomous Systems DTC • Aim: • To research innovative technologies relevant to autonomous systems, at both whole-system and sub-system level. • Technology Themes: • Algorithms and Architectures • Communications and Control • Mission Planning and Decision Making • Systems Engineering Research • Sensor Exploitation • Propulsion, Power Generation and Energy Management • Funding • £10M per year (50% MOD funded) • Exploitation • SUAV(E) Images courtesy of the SEAS DTC www.seasdtc.com

17. Unmanned Aircraft Demonstrator • Aim • To demonstrate the UK capability to build and fly a large UAV. • Technology Themes • Autonomy • Propulsion • Materials • Funding • >£100M inc industry PV • Exploitation • Ground attack, Surveillance. Images courtesy of BAES PLC

18. 155mm Advanced Ordnance Research • Aim: • To mature technologies that could reduce the platform mass of Self Propelled Guns without compromising effectiveness. • Technologies: • Advanced Muzzle Brake to reduce recoil forces • Lightweight Ordnance to reduce recoil forces and logistic burden • Gliding Ordnance to extend range • Completion • Sep 2009 • Exploitation • Indirect Fire Precision Attack programme

19. Indirect Fire System Architecture Policy CMP CRD Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Finance (PB&F) Through Life Finance (PB&F) Through Life Finance (PB&F) MDAL P R O J E C T Schedule (MSP 2000e) Capability Output DLoDs (SULA) URD (DOORS) Risk(ARM) 3PE (Monte Carlo) Experimentation (JBL/LWC) Research Programme Through Life Technology Route Map Sponsor Arty Sys IPT User

20. Indirect Fire System Architecture Policy CMP CRD Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Finance (PB&F) P R O J E C T S Through Life Finance (PB&F) Through Life Finance (PB&F) MDAL Schedule (MSP 2000e) Capability Output DLoDs (SULA) URD (DOORS) Experimentation (JBL/LWC) Experimentation (JBL/LWC) Risk(ARM) 3PE (Monte Carlo) Experimentation (JBL/LWC) Experimentation (JBL/LWC) Research Programme Through Life Technology Route Map Sponsor Arty Sys IPT User

21. Indirect Fire System Architecture Policy Capability Tradespace (MODAF) (MooD) CMP CRD Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Management Plan C O H E R E N C E C O H E R E N C E Through Life Finance (PB&F) P R O J E C T S Through Life Finance (PB&F) Through Life Finance (PB&F) MDAL Schedule (MSP 2000e) Capability Output DLoDs (SULA) URD (DOORS) Experimentation (JBL/LWC) Experimentation (JBL/LWC) Risk(ARM) 3PE (Monte Carlo) Experimentation (JBL/LWC) Experimentation (JBL/LWC) Research Programme Through Life Technology Route Map Sponsor Arty Sys IPT User

22. Questions