Headlines: November 23rd, 2000

There is evidence that the Ministry of Defence’s implementation of ‘smart procurement’ has begun to mean more control of its costs, according to the National Audit Office (NAO).But its current major projects continue to drift on cost and on being delivered on time.

The NAO Major Projects Report 2000 covers 20 projects already begun before the introduction of new acquisition procedures.

The forecast for overspending on these projects is reducing, though is still at 2.4 billion pounds, which represents a cost of 5.7 per cent more in total than was originally approved.

Most of the reduction comes in a potential saving on the Eurofighter programme which is dependent on successful contract negotiations.

But, delays are getting longer – on average in-service dates have slipped by 3 months since last year to 28 months in total, against the timetables set at main investment approval.

Seven projects experienced delays totalling 63 months in the last year and this slippage could increase further.

The NAO report recommends that as smart procurement takes hold, as much attention is given to delays in time as in improvements on delivering to budget.

Link: www.nao.gov.uk.