Smart Procurement: Revolution or Regression?

Abstract

In 1958, the UK Ministry of Supply found that, on average, actual costs of defence equipment were 2.8 times those forecast.¹ In 1965, the TSR-2 was cancelled partly because of costs rising from the original £500 million to over £1000 million and possibly as high as £2000 million. In 1998, the cost overrun on Eurofighter was forecast to be around £1.5 billion. There are two other problems aside from cost overruns. Time slippage is endemic to UK’s procurement system and averages around three and a half years, though some projects have slipped ten years and others even more.² Meeting performance specifications has also been poor with around 10 per cent of key technical requirements not met. It seems that little has changed.