Don't forget that, perhaps unnecessarily, components and such need to be "military grade" and most likely sourced on short lead times, both of which can bump up the costs to way beyond commercial grade/lead time prices.Originally Posted by CAT-THE-FIFTH
If the final cost is anything like those figures then we've been mugged. And judging by the "aircraft carrier catapult fiasco" and the £2-3bn cost for a catapult.... we're quite good at being mugged. Really very good in fact.
My current theory is that large business and government procurement practices are the cause.
Take the "approved supplier list", as a great wheeze, that means that once the supplier is on, they can charge a fortune because they're unlikely to get dropped. Also the focus on "performance" rather than cost.
I appreciate the "military grade" nature, and advanced encryption, but still the cost of all MOD kit seems to just be someone pocketing big bucks (does anyone remember the lightbulb buying scandal?).
Strangely there seems to be no appetite within government to do anything about it. No wonder we're struggling to reduce our overall spending.
CAT-THE-FIFTH (06-02-2013)
They only do one system in one version,and they are trying to sell this to law enforcement,etc.
It does seem each deployed system has 2 helicopters which means,a deployed cost of £63000 per helicopter.
Could non-military customers be able to afford such a high cost??
Also,remember unlike in the past the military is using more commerical grade equipment. For instance HMS Ocean was built to commercial ship standards with a shorter lifespan,as opposed to the normal military standards to save money.
I personally think it is more a case,that the people making it have made a big song and dance on how brilliant it is,and laughed all the way to the bank.
That is from their own website,so even by their own estimation training costs are low.Easy to Operate – Requires Little Training and No Pilot Experience
If these were so expensive to develop then why in the US which is known for overspending on defence,they can initiate something similar for much lower costs?? Look at the low cost control system for that US Air Force funded project:
http://www.techject.com/Avionics.html
The thing is though,I actually knew a research group involved in developing autonomous systems, and that was done on a relative shoe-string budget when you come to thing of it.
This,and look at the Nimrod MRA4 programme?? Billions of pounds flushed down the pan for nothing.
Look at the teething problems with the Astute class submarines,or the fact the Type 45 ships are deploying with reduced capabilities,etc.
The aircraft carriers are a joke. For decades during the cold war,the UK government resisted pressure from the RN for big carriers,and pointed them to the smaller types instead.
Now we have spent billions of carriers,which means we have less escort ships which are not even fully armed ATM.
Add to that,you also need to send most of our navy with the aircraft carriers anyway as they are sitting ducks,and we have less escort ships too. The RN has been ditching ships,some of which are well under 20 years old to foreign navies to save on operating costs.
But the biggest whammy is that the F35 is massively over budget,and we probably will be able to barely equip one carrier,unless we gut the Royal air force. On top of this we reduced our financial benefits from the programme,despite being the second largest investor,so the US would "allow" us more control over the software.
The funny thing is that the F35 programme benefits the Italian economy more than ours,and the RR led alternative engine was canned too.
Then consider how many soldiers had to buy their own equipment and the poor condition homes their families were housed in. The only time anything improved in those situations is after the public made a big song and dance.
The waste in the military procurement system not only hurts the UK economy,but it also affects the quality and quantity of systems our military can use in the field,especially with spending has to go down in all areas.
Last edited by CAT-THE-FIFTH; 06-02-2013 at 06:23 PM.
Quite probably a lot of over inflated costs, I wasnt trying to justify the cost, just that sometimes component parts do cost more.
As for "military grade", its just how the things are termed and refers to the parts having higher tolerances compared to "commercial grade".
An example being commercial grade electronic parts might be rated for use between about 0 and 40C, where as military grade could be in the range of -40 to 80C.
As such, the yield of suitable parts is lower, hence more expensive.
Add in wanting them in 1 week, instead of 20 weeks, and that massively jacks up the price.
Yes,I am quite aware of milspec requirements,as they even cover things like humidity,shock requirements,etc. Look at the parts in satellites which are radiation hardened for example.
However,many commercial grade parts can have milspec ratings otherwise how could you operate oil fields in Siberia,etc??
Moreover,like I mentioned people forget examples like HMS Ocean which was built to a commerical grade,and that is a 20000 tonne+ helicopter carrier. So,its not really a case that all equipment militaries use is even milspec.
The other aspect is the underlying technologies in batteries,lightweight materials,SOCs,etc have dropped in price,due to the explosion in consumer and commerical demand for powerful,small portable devices.
Say,20 years ago they would have been massively expensive,but not now as the R and D costs are now amortolised over millions of devices.
Moreover,look at the planform?? Its not like some one of nano-UAVs being developed which are really pushing the technical boundaries.
The problem is though the same excuses are used time and time again,to justify high costs from the manufacturers and middlemen.
How often do governments bother to actually investigate if there is price fixing going on with military purchases??
Look in the US with SpaceX?? Now they want to do military launches, and the old school are all going in a hissy fit since,they will expose how much they have been fixing the price for decades.
Its like they have a flipping blank cheque to charge what they want,whereas all other services have to quantified to the last penny now.
Last edited by CAT-THE-FIFTH; 06-02-2013 at 06:32 PM.
Scrub the word military, I dont think governments investigate anything half the time, because they spend so long picking "trusted" suppliers or putting it out to tender.
If publicly funded projects had to justify every single penny, things would be far cheaper without a doubt.
Its what you get when "for shareholder profits" companies do work for the public sector.
Its also interesting that most of them, at least in the US, often seem to term themselves "contractors", which might well explain things, given the usual working practice involving each job being the last youll get for ages so you need to earn enough to cover the time youre not working.
Typical behaviour of spending money which could be put to better use
Nail on head!!.
Sadly, like most of British commercial enterprise, it's the "old boy network" that is still in play..............you can forget, as a new business, innovative and cost reduction methods leading to leaner business processes............unless of course you know someone in the know............bear in mind that the majority of Government employees in this country have never had a "proper job" (ie) outside of their closeted existence within the framework of Public Services (read, oh, we have a job for life and don't have to give a s**t no more", .....Business always has in this country relied upon the old boy network and if you didn't make the cut early on then you were out.
There is a shed load of "dodgy deals" done by Government officials that never get exposed because, let's face it, It would never do to think that an official, elected by the people, for the people, would ever do "that"!!.
If you ever thought Rats were parasites?....think again!.......Politicians put them firmly in their place!!!
BTW,you did joke that it seemed expensive compared to a lot of helitoys!!
Actually no. Look at the dates,the 64 systems were deployed as of October 2012 according to MoD as they were already in use in early 2012. This is a new contract which awarded in November 2012 for 160 additional systems,which probably means it is probably a follow on order.
If you look at the tender,the first part of the new contract is for £2.5 million for a unknown number of systems.
That still makes even deployed system £125000 or nearly $200000.
Edit!!
If a US Air Force funded project which appears to need more R and D can cost barely £1million,and costs barely £1000 for each unit,what the heck is the markup on this system??
The middlemen selling this system must be making a massive amount of profit in this.
You only need to see the billions wasted on Nimrod to show how effed up UK defence procurement is.
There is hardly any openness about what taxpayers money is being spent on.
Some interesting comments in the thread, the ones I have quoted are representative.
First off - Derfence Procurement.
Since the mid 80's there has been very little 'in house' R&D into military technology, or even blue sky research. Most R&D is contracted out to industry on a competitive tender basis.
The process is
Military capability gap identified
Informal talsk with industry
Funding sought for a feasabilty study into a solution
Invitation to tender put out on a competitive basis
Study obtained
Funding sought for investigation into solutions
Competitive tender
Assessment
Contract awarded for ininitial solutions
One selected
Funding sought for main contract
Invitations to tender
Contract award
Delivery
Acceptance
In service
Support
Disposal
As you might imagine, that takes time and costs money, but we do not pay for continuous organic R&D establishments.
The idea of the competition is that is secures best value for money for best of breed. There is a saying in procurement that you can have it good, quick and cheap, but not all at the same time!
The MoD has a poor reputation for delivering projects on time and to spec.
Part of this is the level of scrutiny that each stage of the process which adds delay. There is always a requirement to reduce costs by reducing spec, or delaying procurement to save money in year, which saves money short term, but adds to the overall cost. Reducing capability saves money, but when that capability has to be added in later costs go up.
Where competition is waived for a sole supplier, then the supplier is audited to ensure that the profits do not exceed a set figure.
Holding competitions is expensive in terms of resources for both the tenderer and Government, but that is the price to be paid for being transparent and avoiding suspicions of insider dealing.
Urgent operational requirements show how a capability gap can be filled quickly by circumventing the normal procurement rules, but at a greatly increased cost.
Compare that with the US whose military services all have very extensive organic R&D establishments. However I would doubt that these costs are included in the overall costs of a given project, which may be why the cost of their apparently equivalent equipment is much lower. The costs of UK equipment usually include the through life costs, which can easily exceed initial purchase price.
(Compare with a £50 inkjet printer - the through life costs, paper, ink etc will be more than the purchase price of the printer)
TL;DR version
Be careful comparing procurement costs as you may not be comparing like with like
Be careful comparing costs as the procurement models may be different.
Don't know where to begin with this Daily Mailesque rant.
Defence Procurement is carried out by civil servants. They are employees, not elected officials. As for 'Jobs for life' you only need to look at the reduction in size of the Civil Service to see that that is not true. There are many checks and balances in place to ensure procurement is fair, apart from the fraud acts, there are offences such as "Misconduct in a public office" and strict rules about accepting hospitality (in case it might be construed as a bribe).
Government is formed from elected politicians. Ministers are not elected as Ministers, they are selected from elected MPs from the majority party.
Ministers are responsible for policy and while they are accountable for their departmental budgets, they do not scrutinise every project. The level of scrutiny depends on the value of the project. The Civil service is res[ponsible for carrying out the policy.
Ministers can influence procurement policy - they are then accountable to Parliament.
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It seems the lives of soldiers are much more highly valued than the life of other citizens. Still as long as they don't ask me to go to war, that seems fair enough.
I am quite aware of that. I tend to be interested in mililtary things,especially military aviation where life cycle costs are included, so I do follow defence procurement in many parts of the world. Its why some of the Russian systems have lost out,as they cost more to maintain over time than European equipment which costs more up front.
However,I have also been following the technology behind these micro-UAVs too also in more commerical devices and I also have known people who have worked on autonomous robotics too. Some of these costs sound more pie in the sky especially, when start to actually think what is going into some of these things. Even a $5million R and D cost for a micro-UAV comes out at $10000 per UAV sold over a 1000 unit production run. The problem it appears were are pay $100000 per UAV or nearly $200000 for a 2 UAV system. Also,going from the statements so far it appears,the MoD considers them disposable due to "low cost" indicating that we still pay for the ones destroyed. Considering their usage pattern,I would expect them to have a short lifespan during combat. If it were the case that each 2 UAV system got another 20 replacements free over the life of the system,then that would be different,but then as usual they don't really want to clarify that though. What are the costs of the individual UAVs,sensor payloads,base stations,etc??
These should be all in the quotes given by the companies bidding for the deals.
The problem is though especially in cases where there are only a few companies can supply items,price fixing is probably the issue here. If all the companies have similar prices,then either you need to pay it or investigate it,and if you are in a hurry the latter is not really an option.
Even basic supplies you can see this happen even in commercial,medical and research areas. They just rebadge the catalogue and all of a sudden a plastic tube holder will cost twice the amount because it is for medical use. Compare the "non-medical" version and it is the same moulding,same plastic and made by the same OEM in the same packaging. Put military to it,and see the price skyrocket. Companies do this because they can.
When you look at the billions of pounds which was wasted on the MRA4 and countless projects which have gone over budget and thereby had to ship out,with reduced abilities and numbers as a result(Type 45 destroyers and the guns on Typhoons),OUR defence procurement is be very wasteful. FFS,look at the carriers alone and even the fact that £100 million was wasted by the F35 variant change which never happened.
It just keeps on happening,and only now people are really starting to notice due to the recession.
Then put this is in the context of other areas of defence which are underfunded as a result of the waste and the spending cuts in all other areas of the economy,especially in education which is one of the most important areas any country needs to spend money on,especially in the UK.
These screw ups have cost us billions of pounds of money we don't have.
Last edited by CAT-THE-FIFTH; 07-02-2013 at 05:22 PM.
As I said, when you look at Urgent Operational Requirements, procurement costs do increase, and 'normal' rules of procurement increase.
There are also costs associated with cging projects through their lifetime, either because the requirement was poorly defined at the outset, or the requirement changes because of changing need. And again, as I pointed out, the need to be seen to be fair and open tends to push prices up. Every Defence contractor that puts a bid together incurrs overheads, whether they win or not, and just the cost of putting together a bid may run to six or seven figures.
And your posts weren't quoted for criticism, but because they were representative/quoted other posts in thread.
Moving back to these UAVs,
I don't know what degree of ruggedisation these have undergone - not just ruggedisation for use, but ruggedisation in storage and transport - after all, they need to work first time when needed in the field, you can't just pop down to the nearest Mil_Toys_R_US and get a replacement if it fails.
There may be other features that have not been released that pushes the costs up, additional, sensors, navigation and telemetry for example.
I'm not particularly defending or justifying the cost in this instance, merely pointing out that there is more to Defence Procurement than is perhaps obvious at first glance.
The bottom line is do they offer value for money? And military value is very hard to quantify.
The other question is whether a less expensive device offered sufficient capability to do the job, and was available in sufficient numbers in the required timescale. Given the drive to reduce the equipment budget, I am certain that other options would have been looked at, and the solution chosen offered the best combination of features, in the right numbers, at the right timescale for the price.
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Fair enough peterb,but perhaps they could be more transparent in what is being provided,because I can't even find the original tender!!
I can understand the military value of the system,especially since I have known a few army people,and even lived in a country which was in the middle of an insurgency. The use of UAVs was very useful for spotting targets and enemy entrenchments and improving the situational awareness of the commanders in the field.
The people I knew, who were working on autonomous robots,were ultimately targeting commerical operations,ie,at the end goal of the project ultimately will require very reliable machines which need to operate without human interaction in all weathers.
However,what I am more concerned is whether we are overpaying for the ability we are getting in return. It is very easy for high procurement cost to be justified and this has been done in many countries and sadly in cases where it has been investigated you do more than often find problems.
When,you consider the massive overspends we have had in the last 5 to 6 years,it does make think there needs to be far more transparency and it can't be simply a case,its military we can pay any amount we want to and companies saying its military lets double the price. However,as is the case,the latter attitude does happen.
Look at the whole thing with SpaceX doing military launches in the US,and then LM who has had a virtual monopoly for years who criticised them saying they were cost cutting,and that is why they were cheaper. Was it because the SpaceX rockets were not "military" grade??
The problem is in an ideal situation with unlimited funds it would be fine,but so many areas of public funding are being stretched,and every penny is being saved.
Look at what is happening with disability benefits for example?? Sure,there are people scamming the system,but ATOS is screwing over people who really do need the help,pushing people even to suicide. People on low incomes,are having council tax relief being massively reduced.
Then you have the MoD wasting £4 billion on the MRA4 and then £100 million on not switching F35 variants even though it appears the study was pointless in the first place. Look at the carrier fiasco,where they justified building two carriers since it was "cheaper" per carrier(but it cost more overall) and we can barely afford aircraft for one carrier,and we managed to survive fine for decades without supercarriers,with massive airwings. All,that was justified at some point too.
Last edited by CAT-THE-FIFTH; 07-02-2013 at 07:12 PM.
There may be good reasons why the specifications of the UAV are not in the public domain, OpSec being one of them However Procurement decisions are subject to scrutiny by the National Audit Office (or whatever it is called now), as well is internal scrutiny.
As for the wider question, there have certainly been some interesting policy decisions which have resulted in unnecessary Defence expenditure, some of which, as I explained, result from an imposition to reduce in-year spending, others from a changing military requirement. The collapse of teh soviet block turned militarystrategy and equipment requirement on its head, and the rising terrorism threat requires very equipment.
As for the carriers, we did have organic capability with the Invincible class, although the decision to prematurely retire the Harrier beggars belief. The faff over whether to equip the QE class with a catapult or not is a fine example of disjointed thinking, partly as a result of muddled Defence policy. This is not new though, the scrapping of the TSR2 by Denns Healey is a fine example.
There is another aspect to Defence Procurement though, and that is an attempt to support the UK's Defence Industry and the jobs it provides, and that also has a political dimension as well as a military one.
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In the 1960s and 1970s the RN wanted big US style supercarriers, and even the sole Bristol class area air defence destroyer was built as a result of that . Despite,the Cold War being in full swing,the carriers were still not built. The main problem is not only the carriers too but the individual cost of the aircraft themselves ,which has skyrocketed which is multiplied by the massive increase in the number of aircraft the RN now need,plus we gave up on work share to get greater control of the software. Then couple that with the lower number of escort vessels than what was original needed,it just comes across as poorly thought of,and it makes me think how much of a spending black hole its going to become.
More than the TSR2, the cancellation of the P.1154 project was shortsighted as no other single engined VTOL fighter would be produced until the F35,and the the lack of supersonic ability did reduce sales of the Harrier. Then the whole cancellation of Black Arrow and the fact that most of the talent went to NASA and Arianespace.
Even in the support of the defence industry,something like even this nano-UAV is an example. There is a lot of work being done in the UK on robotics and UAVs,and it is not really supporting any UK jobs(apart from the middlemen),and it has the added whammy that company is now better placed than before. I expect that the UK contracts have easily covered their R and D for the nano-UAV. Perhaps they were in a hurry,but then see how the US air force managed to fund that university for the nano-UAV which used a custom planform.
Last edited by CAT-THE-FIFTH; 07-02-2013 at 08:35 PM.
And the cancellation of the carriers that the Type 82 escort would have supported was a political decision, not a procurement - but that is a capital project, not a minor one like the UAV.
I have no idea what the Capability Driver is for the nanocopter, or the timescales, or the equipment capability. (if I did, I wouldn't be contributing to the thread)
Again, to re-iterate, there is more to Defence Procurement and the decisions that inform it, than are usually understood by the general public, or wifully ignored by those with an axe to grind.
There are legitimate concerns, as I acknowledged earlier. Defence Procurement isn't perfect (although it has Ministerial oversight), but it does present a unique set of challenges.
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