The Defence Committee’s latest report titled ‘It is broke – and it’s time to fix it’, published today, has brought to light a series of serious deficiencies in the UK’s defence procurement system.
While the inquiry, led by Sub-Committee Chair Mark Francois MP, has criticised the system as a whole, the purchase of the E-7 Wedgetail AWACS aircraft stands out as a particularly troubled case.
In its analysis of the E-7 Wedgetail procurement, the report criticises a decision to reduce the UK’s initial order for five aircraft down to three.
According to the report, “the original order of five E-7s was estimated to cost £2.1 billion, while the three E-7s will cost £1.89 billion… Even basic arithmetic would suggest that ordering three E-7s rather than five (at some 90% of the original acquisition cost) represents extremely poor value for money.”
Additionally, the report raises concerns over the E-7’s delayed Initial Operational Capability (IOC). Initially expected in 2023, the IOC has been postponed to 2024 and might be deferred further to 2025. Boeing, the manufacturer, has attributed the delay to supply chain and workforce issues arising from the Covid-19 pandemic.
However, the Committee underlines that the delay is exacerbated by ongoing negotiations between DE&S and Boeing over the Full Business Case (FBC) and an in-service support contract. The report states, “DE&S are still negotiating an FBC and associated in-service support contract with Boeing, which should already have been successfully finalised long ago.”
The Committee also mentions the serious operational implications of this delay. The E-7 is meant to replace the Boeing E-3 Sentry AWACS aircraft, withdrawn from service in 2021, leaving a significant capability gap, particularly in light of the ongoing war in Ukraine. The report states “the three E-7 Wedgetails which the RAF still intends to buy will be absolutely ‘prize targets’ for the air force of any potential adversary.” This makes the reduction in planned airframes from five to three seem like “an absolute folly, not just in financial but also in operational terms as well.”
The E-7 Wedgetail case, as discussed in the report, represents broader issues within the UK’s defence procurement system, emphasising an urgent need for sweeping reforms argues the report.
Same old, same old. Lessons are never learned.
And who will be held to account over the absurd decision to reduce the airframes from 5 to 3? No one I suspect….
A problem with procurement? WOW!
Depressingly normal, how did we end up being run by morons.
Pretty much the story throughout the higher echelons of power in this Coutry from business education and politics. It’s still who you know over what you know and promotion on merit a secondary consideration where the candidates are only candidates through privilege not capability far too often. And once there the prime function of these people is sustaining that system as the rest of us are simply not deemed trustworthy and a threat to their power structure. Even those from their background who try to change and modify the system will be inevitably ‘punished’ to bring them back into line… Read more »
Delay it, gold plate it and buy less seems to be the order of the day.
And then decide the thing will be ‘for but not with’ gold plating…
So, another five years to reach that decision 😂
I have fears the change of government will result in an even worse situation , with the pressures on the public purse. Defence is not sexy or vote grabbing but Ben Wallace is correct on his three front analysis and spending on schools is pointless if they cannot be defended against all comers .
The days of waiting until the threat are on the horizon before we rapidly rearm are gone. We will start any war with what we have and right now it is not near enough.
Whilst I agree that Defence trditionally has not been seen as a sexy subject but from my newspaper at least it does appear to be coming up the agenda in the publics view. I have been involed in Politics in the past (to the right of centre) I simply do not think the left can ignore only a 5% pay increase for the military. There is cetainly pressure from both Nato itself and more importantaly Uncle sam that the UK must aslo increase capbility in both numbers and equipment. A really good excuse for the left is to increase the… Read more »
As an engineering manager and. My bread and butter is high value contracts i despair at the waste in the MoD and the games that contractors play.,the Rob Peter to pay Paul, then rob Paul. We need an honest assessment(, not treasurer lead) of what this country needs in the way of a minimum armed forces and properly fund it!! The current MoD procurement is not just crazy it costs the tax payer a fortune. A fortune that could be better spent providing the country with the defence capability it needs. How can we be the third ( just) biggest… Read more »
I think this programme in particular is a shocking window on the reality and how much of the problem must be internally manufactured be it MoD, forces or/and business. Because this order initially went against established protocol (much criticised at the time) in holding a competitive selection process which gave the impression that decisive decision making was finally taking place when the obvious and best choice was made and of course subsequently this has only been shown to be the correct choice with the US going in a similar direction. Secondly this is a proven system, in service with the… Read more »
There is a massive gulf between what we get/have and what we spend and it’s not for our betterment. I am a CMT Reservist in a Field Hospital (medical professionals mainly so very officer-heavy) and the amount of money spent on “Adventurous Training”/aka Jollies for people who could afford it anyway is shocking. On the other hand we do get to fire a rifle once a year!
I’ve lost some respect for Wallace. There is a rule you can’t take up a job in an industry that you oversea as MP for one year after you stop. I don’t think it’s a coincidence that the election is likely due in autumn next year, aka 12 months time. Expect to see him pop up in a luxury defence role next year. Which clearly rises questions around kick backs he might have received during his term. Hopefully not and just built friendships but insights into workings of the government although I can’t imagine defence contractors don’t have that in-house… Read more »
All very valid points. I am rooting for Tobias Elwood but I Sunak is too spineless to give him such a high profile.
He is my opinion is a rare MP, someone there to serve his country.
I find it laughable that the likes of Trump criticise supporting Ukraine on the basis that US supplies of weapons and in particular ammunition are being gutted when in fact the War has done them a favour in showing just how complacent they and us all have been in decimating our capacity to produce these assets, 5 years of his Presidency did nothing to change that factor after all and if US stocks are being seriously affected now how the hell did he or others, think a conflict with China, had Ukraine fallen, one with Russia too on various fronts… Read more »
In my opinion Ukraine are doing the west a huge favour. They are fighting a war that was coming, it has given us an opportunity to test and improve our weapon systems in a real world scenario and putting Russia back decades. It is unfortunate ukraine blood is being poured away to do it.
Time we accelerated giving Ukraine NATO jets.
The time to give Ukraine NATO jets was a year ago….
Agreed!!
It is a massive undertaking and needs to be progressed.
The west cannot criticise Ukraine progress if we force them to fight with one hand tied behind their back.
We know it’s broken, now fix it and add the two additional airframes to the order!
Especially as we have the hardware eg radar sets and cabling/ control systems for those 5 airframes already ordered and paid for. its just daft.
Very interested to hear that the UK has equipment for 5 airframes. Here in Australia we had 4 E-7s on order and acquired equipment for 6. When aircraft 5 and 6 were ordered, our defence minister crowed about how cheap it was to expand the fleet by 50% ignoring, of course, that the equipment had already been paid for. At least we did get 6 but the original program of record was for 7 (and even that would be insufficient in a conflict). My question to UK defence chiefs would be “Are 5 E-7 really enough for the UK?” followed… Read more »
There is a lot of “other” equipment which doesn’t include the Radar system which make up an E7. Such systems include radios + antennas, computers and their displays, unique interconnecting looms as well passive defensive systems , recorders and cockpit military displays and controls not to mention the military items in the airframe and engines such as generators. refuelling equipment which are all necessary to build an E7 – these items do not come with a basic civilian airframe and they don’t come cheap.
No doubt it will require at least 30% cost increase to reverse the bungled decision.
Exactly which rather puts them between a rock and a hard place. Pity they built that hard place themselves isn’t it probably at a premium price too.
Don’t worry, it’s ok – we have two spare radars for the Wedgetails thanks to the MoD preparing for battle damage, apparently they bought 5 sets
Oh but…our allies will help 🙄
Not sure why you’d ever negotiate a business case with a supplier as that’s an internal document. Probably just semantics.
We expect nothing less than this from the Tories these days. Labour would be just as bad.
I don’t think people quite realise how terrible the Tories are and how devastating voting Labour would be. We are screwed.
Tend to agree. No real alternative thanks to a voting system and governance aimed at under the superficial semblance of ‘Democracy’ is keeping the entrenched in place in the same way our system keeps entrenched incompetents in place throughout society as a whole. I suspect Putin took a good look at this when instilling around him such a sycophantic power structure in his own Country, after all he would have great experience of our Public School and Oxbridge set up during his spying career. And Hitler did love the Boy Scouts after all in sustaining his 1000 year Reich.
A ten percent drop in cost for a forty percent drop in capability.
Someone must be held accountable!
The report also praised DE&S for their performance on Urgent Operational Requirements but chides them for their performance on long term projects.
Could it be coincidence that the former tend to be organised from the bottom up, while the latter from the top down?
No, Boeing put the price up that’s why we only got 3 for 90% of the ORIGNAL price for 5
Just basing my comment on the official report.
Bungled project management either way.
Agreed. RAF was managing to allotted budget. Boeing was able to change ground rules (not certain of legerdemain employed to accomplish this).
Considering how Boeing constantly succeed in screwing the US taxpayer, I guess we were a pushover sadly. That said I would love to know how they operate in Australia, both on this platform and others, in particular the Moonbat project. Haven’t heard any negative reporting, though perhaps distance plays a part. Maybe they are playing nice till they gain greater footholds. Anyone know?
Spot on, any historian can tell us how pre and even during WW2 the top down was mostly disastrous while the emergency propelled bottom up achieved most of our increasing success in that period by circumnavigating the former imposed intransigence from above. The SAS, the sticking of Merlin’s in Mustangs, the extravagant use of decoys, the jet engine, the Mosquito, all sorts of successes happened to a great degree despite the established power structure and systems, not because of it. Mavericks have always been behind great British success fighting against rather than with the establishment (with a few notable exceptions… Read more »
So unexpected.
Probably worth noting that MOD knows that the reduced order is an irrational decision, but one they’re forced into by the Treasury being miserly about the £0.2 billion difference. One can only assume the Treasury has the full support of the PM in order to feel able to adopt such a nonsensical stance.
But it wasn’t a 0.2bn saving. Boeing put the price up from the original £2.1bn. That’s why 3 finally cost £1.89bn so presumably 5 would have cost nearer £3bn albeit the cost of 5 radars are in the £1.8bn
That assumes costs scale linearly with the number of airframes procured, which isn’t the case because there’s a fixed development cost to factor in. Hence value-for-money always gets notably worse when an order is scaled back (or delayed).
Development costs would have been mitigated to a degree as it’s an existing design used by the RAAF
… and that as I mentioned elsewhere is the most worrying aspect. However because of the issue of obtaining suitable airframes I don’t know how that may have factored into the equation as time passed, I know the acquisition proposal changed at some point. Also begs the question where are the US going to get their airframes from, no idea how many they are ordering perhaps 15 initially to replace the outgoing 15 E-3s but that’s only half the fleet.
Reported in Defensenews.com a few months back the USAF planned to buy 26. That article also referred to concerns as to where the donor airframes would come from.
The USAF are on record as only wanting new build airframes.
Fails to mention that the kit including the Radars are included within the £1.89B. and there was no suitable 2nd hand low hours airframes. Basic truth and the finding that 3 airframes with the hours reported would meet the Uk Needs for 2 aircraft on station 24/7 one in maintenance. but there would be no need for pro-longed maintenance for 3 years. the Recommendations from Boeing is the development budget for the E7s for the USAF would develop the programme and the 4th and 5th airframe would have been delivered at a lower Tranche than the USA. sometimes just sometimes… Read more »
Nobody’s interested in facts, just hysterical MOD bashing!
The report is from the defence select committee and based on submissions given to them by those involved in the project. But hey, why take their views into account when we can just listen to someone on the internet?
White paper issued on the USAF upgrade, Boeing not building airframe 4 and 5 due to the pandemic and raised the base cost. Internet is a great tool, but if you ignore the access it allows you. just makes you a big tool.
Always always blame me Americans. Even when it’s not even remotely true.
But luckily your not American are you, you want to be, but have trouble with the fence!
Simple answer, there is not enough money to have all we want, the E7 is the latest in a long line of delaying and reducing to save money in the near time but spend more long term. Aircraft carriers anyone? Type 26 frigates? Astute class Subs?
Spot on. No need for a mind numbing analysis or a Francois rant. The simple explanation is the right one. As my grandmother used to say, ‘your eyes are bigger than your belly’.
I often wonder if we should have gone for the SAAB GlobalEye. Can do AEW and maritime surveillance with a smaller crew. It could do some jobs instead of the P8s too. Seems like value for money is never an option for the UK.
Peer relationship and that Data uplink from USA is why Saab got rejected
You know more than me. However, with the vagaries of dealing with the US at the moment, it seems to me that we should looking more at the Swedish and French to plot a more independent course ahead.
Seems like the MOD has secretly cut the order number for the future medium lift helicopters. More cuts. If the expectation is for them to be built in the UK then there will always be a base cost to setup the production line so savings will be tiny.
Cut it to what number?
25
https://breakingdefense.com/2023/07/uk-reducing-new-medium-helicopter-buy-to-25-35-aircraft-airbus-exec/?amp=1
Don’t think it was secretly cut, it was announced at RIAT 23 that numbers would be reduced from 44 to between 25-35 cabs – so yes, probably only 25. It appears we don’t have enough money to procure 44 now!
Considering the number of deaths directly linked to lack of medium lift helicopters in both Iraq/afgan, the cut should be a national scandal if true.
Couldn’t agree more mate, it appears defence is heading to a really dark place in terms of capabilities. This cut will not help matters, only confirm that we are rapidly on our way to becoming a Tier 2 military force, with a few Tier 1 capabilities!
44 was always too high and totally unrealistic by past procurement purchases. If one looks at what they will replace – 24 Puma in 2 Sqns – 33 and 230 Sqns. ( yes, used to be 40 plus a long time ago and according to SB1 230 has folded ) 6 Dauphin in 658 AAC. 3 Bell in 84 Sqn, now using Puma. Assume there were 3 Bell in 7 Flight AAC, now using Puma. Even down to 30 might just be doable, but 25 is too few when the SF task is included in the totals. It is why… Read more »
Well, the release said between 25-35 cabs, so you never know, might be 30-35! The 25 comment was just me being cynical, hope that that is the case.
That’s concerning I thought 40 seemed very low. However in the article I mention above (I only read it a few days ago but don’t know the date of publication) Airbus was saying the Pumas have no end of life date and could theoretically go on well past 2030 and as such were not even certain a new helicopter order would even materialise. All seems very much (not) up in the air it seems. Would like to think US hybrid copter developments are playing a role here too on decision making but who knows and could we afford it anyway… Read more »
Hi Spy, 25-35 seems a tad low to me, although I imagine the RAF would bite your hand off for 40 cabs! It is my understanding that the initial OSD for the Pumas was 2025, which has been extended to 2027ish!! Not sure where the 2030 figure is coming from, although entirely possible I suspect, if we throw lots of money at them. Some people have been advocating keeping them until the early 2030’s so that we can align ourselves with the US Valour programme. Not sure if that’s possible, or indeed that we would want to, given that we… Read more »
Both potential suppliers have said that production would be heavily reliant on exports to sustain it, think Airbus mentioned they were talking of 40 for us as the base order.
To me the export part makes no sense as all the options are already available from other factories, why would a country buy from the UK instead of another European one. Thanks to Brexit the supply chain will be more expensive (import duty on parts built in Europe) and so unless we build enough for ourselves to bring economy of scale (25 does not) then we won’t be competitive
It’s seemed to me for a long time that HMG runs defence procurement to maximise the profits for defence firms, mining the public purse. HMG certainly isn’t in it for the benefit of the country or the people, just their own class of investors. Wolves in sheeps clothing comes to mind.
Blame goes to the top Sunak and Hunt. We get much noise about increases in defence spending, next week we hear this is cut and that procurement is slowed to save cost. Whilst our arm forces are not like for like with Israel. Their MOD does the same thing as ours with 300 staff ours 11000 ! It’s the MOD that needs streamling not our forces. At the most 1000. The saving will purchase two extra wedgetails and convert 50 more Challengers to 3s.Plus replace those canalbised parts I have little doubt.
You want to reduce the 11,000 plus DES to 1000? 😀
DES does more than procure, but that little detail seems lost in the wind here…
I have to say that I’m struggling here, really struggling to ‘compute’ the figures involved in the purchase of an AEW&C. The Boing 737-8 which I believe is the most up to date model, retails at $130 million. So to my simplistic mind, 3 Boing 737-8’s works out to say $400 million. Work with me here, but I do not see where the billion comes into the calculation. Oh I understand that a ‘standard’ 737-8 has to ‘chopped about’, welded here and there, have extra metalwork chucked in to reinforce the bloody things, and then provide space for radar and… Read more »
I thought the 737’s we are converting were pre owned….not brand new from Boeing….I seem to remember a discussion on here about the previous owners
That’s not a problem of procurement…the procurement team ordered and got 5 for a good price…every knows that if you then go back and cut the order you will get screwed….the fact a politician ( and this would have been a political decision and senior leader decision Above all else) decided to save some cash in the short term has cost the county in the long term..that’s not a procurement problem.
The order was cut because Boeing put up the price, trying to milk their defence work to offset the B737 max issue and the Covid collapse of civil aviation at the time.
Haven’t they also got 5 radars and only 3 planes? Why not fix it now and order the remaining two?
Just seen that PaulT has made the same comment.
I think there might be a reason for this. I do wonder whether the MOD will look to acquire some former civil 737-700 airframes second hand and send them to Boeing to convert into Wedgetails to try to add more later on at a cheaper price. There aren’t many left now though. Off the top of my head, you’re only looking at Southwest, United and Delta really. The former have an incredible 230+ of the 7Max on order which are supposed to be arriving by the end of this year. Boeing are still inching through the certification process with them.… Read more »
Another idea I had was that the three Wedgetails are perhaps just a placeholder just to retain the capability at bare minimum cost, basis the RAF going in big on the next gen new concept AWACS platform that Airbus are studying. You’d think it would be a modular solution with an A320NEO/220 as a base. Underpinning this is the desire for the NATO allies in Europe to replace the old E3s at Geilenkirchen with something much more modern and capable and that for this solution ideally to be of European origin. Airbus are bound to come up with something –… Read more »
Surely the new agreement to share, cooperate upon basing and improve the Wedgetail platform over time being signed between UK, US and Australia rather suggests we are committed to it. Whether it means eventual supplementing the numbers eventually, well who knows but certainly not short term one presumes.
The US is the biggest single contributor to the NATO AEW Budget – I doubt they would support an Airbus purchase.
I don’t disagree with you John. I think one of the things underpinning the current dire situation is a curious effect of social politics in the UK. What we have witnessed in the last 6-8 years is a rise and pivot of the militant hard left. They have always been there but have mostly in the past been underground. The rise of social media and the “leftification” of the political middle has seen the hard left move from an underground political movement with very definite policies and manifestos to something different. Now they are a ideal-led political class who have… Read more »
Conservatives that conserve nothing !
And that use of seesaw totally sums up the real problem. When you know that eventually you will return to power when the electorate inevitably tires of the incumbent Govt there is no real impetus for change and new ideas, indeed there is even temptation to stick up the next Govt to get you back in power quicker and can start from a lower base from which to offer ‘new hope’ and offer up statistical success thereafter.
So now with the report out, will the UK buy 2 more aircraft?
It is almost like todays politicians actually want Britain to fail in being able to defend its sovereignty. Whilst the E-7 Wedgtail AWACS capability is probably one of, if not the most critical enablers in 21st century Airborne warfare, In my mind, working on the rule of three basis, the RAF would ideally have a requirement for circa 12+ airframes to maintain a continuous operational tempo in full scale combat engagement. Here superior situational awareness and Command and control become invaluable.
Just 3 airframes, so perhaps might expect 1 or 2 to be available for tasking. This is not good enough.
America are about to order the wedgetail in a large amounts, which should bring the cost down astronomically, (https://www.australiandefence.com.au/defence/air/us-buys-26-e-7a-wedgetails) so a good time to order a few more?
As Stalin said “quantity has a quality all of its own”. The UK should accept that we cannot afford to gold-plate everything in Defence or we end up buying about 6 of everything. Should we have tanks at all if we can only have 150 up to date ones? And unless you assign them to home defence how do you move them? Our heaviest air transport can move only 1 at a time. Would it be better (ironically) to learn from ISIS and have a large number of modern but simple “Technicals” with (demountable) HMGs/GMGs and an AT missile launcher… Read more »