MPs have warned that the Ministry of Defence’s inventory management systems are running on 42-year-old software that is undermining the ability of defence staff to track issues with equipment – and expressed concern over Boeing’s “fat, juicy" contract for a stop-gap solution.
The Royal Navy’s "CRISP" software, for example, only allows staff to describe things as “A1” or good stock, or “E0” – which “means that it needs some sort of repair, but we do not have any description about what that repair is” as John Farrow, Director, Logistics and Support Operating Centre, Defence Equipment and Support (DE&S) told a select committee.
MoD officials had warned that some of these ageing software systems were “at risk of catastrophic failure due to [their] age and obsolescence” over 12 years ago. Over a decade on, they remain in place – for now.
The ageing software includes MoD’s CRISP and Stores System 3 (SS3), which went live in 1982 and 1985 respectively. Parliament’s Public Accounts Committee (PAC) in a report published January 19, 2024, warned that failure to replace such systems reinforces “fragmentation of its inventory management" – an issue that MPs said is compounded by "a complex organisational set-up with inefficient working practices."
The issue was also earlier raised in detail by the National Audit Office (NAO) in September 2023 – which warned that “reliance on such systems means that it is very challenging to produce the business information required by stakeholders to run an effective and efficient supply chain.”
(NAO had in 2022 in a separate report noted that despite a “well set up” digital function and some good progress, legacy IT and processes remained rife: MoD’s “current process for ordering basic goods such as boots… involves 29 information systems and 23 different people” it said.)
MoD puts Admiral Andy Kyte in charge
All is not doom and gloom however. Senior defence officials are acutely aware of the problem. In oral evidence to the Parliamentary committee, given in late 2023, they said that these two systems would be phased out “starting from the middle of next year [2024], and we will then have a single warehouse management system, which will run on until 2027.”
That is being delivered under a controversial and expensive £500 million contract with Boeing Defence UK, dubbed “Bridges the Gap” or BtG.
This was awarded as a contract extension in 2020 without a competitive public tender, despite the defence contractor’s failure to fully deliver on the full contract that preceded it; an £800 million “Future Logistics Information Services” awarded in 2010 – and MPs were not happy.
“I am just a bit concerned about the fact that, for some reason, so many of these fat, juicy contracts keep going to Boeing” said one PAC member, Conservative MP Mark Francois during an oral evidence session – and PAC was insistent that future contracts are competitively procured.
(Boeing Defence UK, asked for comment by The Stack on its performance here, asked for a deadline, took a day to cogitate, and then came back with a strategically succinct email: “We defer you to the MoD”.)
From 2027, MoD will “go to the market to look for a new, commercial, off-the-shelf solution” for warehousing and inventory management, officials told MPs, amid concern at the pace of change – with the man newly in charge of driving improvements, Vice Admiral Andy Kyte, telling PAC in an oral evidence session that it will take until around “2029 or 2030 that we will have rolled out all of the software that really matters.”
Vice Admiral Andy Kyte in 2022 was appointed as the new chief of Defence Logistics and Support (CDLS), with a mandate to get defence inventory management in shape. He told PAC: “It is not just about replacing the legacy, but about a whole business process change…
“We are going to have to change the operating model. We are going to have to change the way in which we deliver training,” he added.
But Admiral Kyte sounded optimistic that despite digs from cynical MPs, he could drive change across MoD. (“Are you telling the Committee that, by 2027, you are going to have visibility of every single piece of kit anywhere in a warehouse anywhere in the world?” asked one astonished MP, Sir Geoffrey Clifton-Brown, of the ongoing work to phase out SS3 and CRISP. “We should have it sooner than that” responded an upbeat Kyte. )
A perennial source of friction across MOD, meanwhile, has been Defence Equipment & Support’s resistance to external interference. (DE&S is an arm’s length MOD body that negotiates and manages defence contracts on behalf of the UK Armed Forces, for everything from fighter jets to food deliveries, via protective equipment.) It has, one PAC member, Mark Francois MP said, typically told others across MOD to “keep your ideas to yourself” when challenged on procurement and logistics modernisation.
DE&S CEO Andy Start admitted as much: “We are working hard to change those behaviours within my organisation to be much more transparent and much more part of the integrated defence whole” he responded to Conservative MP Francois in a November 2023 PAC evidence session.
So who is really in charge of driving reform of this “complex organisational set-up with inefficient working practices”?
Well, the buck now stops, on paper, with Andy Kyte. He was asked by Mark Francois MP who was in charge of overhauling such systems and asked if “when push comes to shove, you will tell DE&S what to do?”
“With the Permanent Secretary’s authority, yes,” Kyte responded.
Conservative MP Mark Francois was disbelieving.
“Is that right?” he responded.
“Yes” came the answer.
“Crikey”, said Francois. “I’ll believe that when I see it.”
Software updates and contracts aside, there is, said David Williams, Permanent Secretary, Ministry of Defence, “is a lot to get after that is not locked up in existing support contracts for individual platforms.
“As part of our defence design work, we are looking at the relationships between functions, of which logistics support under Admiral Kyte is a great example – particularly those functions embedded within Strategic Command – and not only Defence Equipment and Support under Mr Start but also the frontline commands. That functional, horizontal, end-to-end setting of standards, driving transformation and thinking about capability in the function is really important, but there is a tension – I use the word neutrally – between that horizontal focus and the vertical way in which the budgets flow within the Department…”
Clearly plenty for the Admiral to sink his teeth into. Meanwhile, PAC said, despite improvements MOD – which holds more than 640,000 types of inventory and more than 740 million individual items worth £11.8 billion – is sitting on “substantial amounts of inventory that is unserviceable, overstocked or beyond the service date of its related platform."
