The UK Army’s Ajax program is an armored fighting vehicle developed by General Dynamic’s European Land Systems. The program has spent more than $4.6 billion, delivered only 14 vehicles, and is expected to be 10 years late if ever. Testing was halted in March and again in June 2021 due to noise and vibration problems, with more than 300 soldiers now being assessed for hearing loss.
Acquisition analyst Jag Patel gave a hard-hitting statement to the UK parliament. It’s only four pages so give the whole thing a read, but here’s one good part:
The only priority for defence contractors is to get to the main investment decision point as quickly as possible, which conveniently takes them into the manufacturing phase. They will do anything to reach this milestone, even if it means riding roughshod over experienced engineers’ views. This is because the manufacturing phase yields the highest commercial return of all the engineering phases.
It should be noted that defence contractors are very fond of marketing themselves as engineering businesses. Yet, they have done more than most to denigrate the engineering profession by not only lowering the reputation and standing of their own employees, but also depressing their earning power in the wider labour market.
No doubt that is true, which is a consequence of lifecycle program planning. Everyone knows that there is procurement money lined up at a certain time. Even in the US, contractors will do whatever it takes to get there, including quick engineering fixes that have adverse effects in procurement and sustainment. It makes no sense, for example, that the F-35 has been in Low-Rate Initial Production for over a decade.
Yet this outcome is what the acquisition process produces. A monopoly on a system concept is given to a single program and contractor before development and in many cases prototyping starts. Years of planning and tens of thousands of pages of documentation are supposed to minimize risk from this “all in” program strategy. When uncertainty rears its head, the contractor is often made to blame. But in reality, it was the government’s fault for setting up perverse incentives, not maintaining competition longer, and asking for fully integrated super weapons without proper experimentation, and on and on. Reliance on multi-decade prediction is a recipe for disaster.
Here’s the conclusion from Patel:
- AJAX may be making its occupants sick, but taxpayers are sick and tired of funding a procurement programme that has failed to deliver a fully compliant vehicle after all these years.
- Defence contractors in the UK no longer possess a design & development capability which disqualifies them from working on development programmes.
- The very existence of Contract Amendments and PDS contracts is what causes contractors to conceal “show stopping” risks.
- Fixed-price contracts offer no immunity to contractors’ deceitful tactic of concealing technical risks.
- The emergence of crony capitalism has created perverse incentives which actively encourages the trashing of good engineering practice.
By the way, of the UK’s top 36 defense programs worth over $133 billion, not a single one is one track — all “in the red”. From the BBC: “Conservative former defence minister, Mark Francois, told the Commons Ajax is an example of why the MoD’s procurement process is “completely broken”.”
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