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Cummings and Procurement

Cummings and Procurement

He's long had a bee in his bonnet about government procurement, which is widely reviled, with a particular focus on defence:

I wrote in 2004 about the farce of the UK aircraft carrier procurement story (and many others have warned similarly). Regardless of elections, the farce has continued to squander billions of pounds, enriching some of the worst corporate looters and corrupting public life via the revolving door of officials/lobbyists. Scrutiny by our MPs has been contemptible. They have built platforms that already cannot be sent to a serious war against a serious enemy. A teenager will be able to deploy a drone from their smartphone to sink one of these multi-billion dollar platforms. Such a teenager could already take out the stage of a Downing Street photo op with a little imagination and initiative, as I wrote about years ago

and

The UK is the same. MPs constantly repeat the absurd SW1 mantra that ‘there’s no money’ while handing out a quarter of a TRILLION pounds every year on procurement and contracting. I engaged with this many times in the Department for Education 2010-14. The Whitehall procurement system is embedded in the dominant framework of EU law (the EU law is bad but UK officials have made it worse). It is complex, slow and wasteful. It hugely favours large established companies with powerful political connections — true corporate looters. The likes of Carillion and lawyers love it because they gain from the complexity, delays, and waste. It is horrific for SMEs to navigate and few can afford even to try to participate. The officials in charge of multi-billion processes are mostly mediocre, often appalling. In the MoD corruption adds to the problems.

Because of mangled incentives and reinforcing culture, the senior civil service does not care about this and does not try to improve. Total failure is totally irrelevant to the senior civil service and is absolutely no reason to change behaviour even if it means thousands of people killed and many billions wasted. Occasionally incidents like Carillion blow up and the same stories are written and the same quotes given — ‘unbelievable’, ‘scandal’, ‘incompetence’, ‘heads will roll’. Nothing changes. The closed and dysfunctional Whitehall system fights to stay closed and dysfunctional. The media caravan soon rolls on. ‘Reform’ in response to botches and scandals almost inevitably makes things even slower and more expensive — even more focus on process rather than outcomes, with the real focus being ‘we can claim to have acted properly because of our Potemkin process’. Nobody is incentivised to care about high performance and error-correction. The MPs ignore it all. Select Committees issue press releases about ‘incompetence’ but never expose the likes of Heywood to persistent investigation to figure out what has really happened and why. Nobody cares.

https://dominiccummings.com/2019/03/01/on-the-referendum-31-project-maven-procurement-lollapalooza-results-nuclear-agi-safety/

Defence

FT article (£) here: Boris Johnson calls off meeting on defence review after policy split

One senior defence official said the NSC meeting was shelved because of tensions between the Cabinet Office and Downing Street over the direction the defence review was taking.

The official cited particular concerns over the paper’s focus on how Britain could use “soft power” to boost the UK’s global presence after Brexit, neglecting conventional military forces.

Nick Carter, chief of the defence staff, is said by Whitehall insiders to favour a more traditional approach to the review, focused around the role of the armed forces and military equipment procurement.

Dominic Cummings, Mr Johnson’s chief adviser, has pushed for a shift in defence strategy focused on the use of advanced technology, drones and artificial intelligence, but officials said that he was not behind the cancellation of the meeting.

He has previously called Ministry of Defence procurement “disastrous” and has scorned “mediocre” officials; he has been particularly critical of the acquisition, at a cost of £6.2bn, of two aircraft carriers.

“It’s very unusual to call off a National Security Council meeting at short notice,” said one person briefed on the disagreement. “They simply couldn’t agree what the starting point of the defence review should be.”

What he's taking on (from this article: Dominic Cummings May Have Met His Match in Trying to Reform the MoD)

3rd Parties carrying risk costs more:

Cummings doesn’t seem to be considering the structural realities of defence procurement. Due to the sheer costs and risks, nations are less keen to carry the burden of the research and development costs, so they are not making their own technologies. The price for failure is seen to be too great a political risk. This burden is passed to private sector firms such as BAE Systems, with little guarantee of orders at the end of it. To cover their risks, contracts provide protection for cancellation, often making it cheaper in real terms to continue to fund projects through to completion. This represents poor value to the taxpayer.

Mutlinational collaboration is the norm (and is, with ever-increasing military collaboration between France and the UK towards something that looks a bit like a European army, likely to continue with a European focus, no doubt much to Cummings' annoyance):

With multinational co-operation increasingly the norm for military procurement, compromises have to be made. No nation gets exactly what it wants from a shared military procurement project but for the MoD this is preferable to expensive bespoke projects that are regularly discarded or quickly obsolete.

It's not in the suppliers' interest, and this is not a task for one person and his supposed crack team:

Cummings may be able to push for better practices within the MoD itself, but suppliers will still put up fights to have contracts drawn up to their advantage and technological change will continue at a rapid pace. This will continue to outpace the MoD decision-making process. Wholesale reform of British defence procurement is a massive undertaking, no matter the person driving it or the force of their personality.

Likely outcome - he crashes and burns and afterwards continues to rage, as he did after his stint at education, at entrenched interests. He will be correct maybe, but it will be because he has lost.