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National Audit Office Press Notice

Driving the Successful Delivery of Major Defence Projects: Effective Project Control is a Key Factor in Successful Projects

THIS STATEMENT IS NOT FOR PUBLICATION OR BROADCAST BEFORE 00.01 HOURS ON FRIDAY 20 MAY 2005

Report by the Comptroller and Auditor General
HC 30 2005-2006
19 May 2005
ISBN: 0102932611
Price: £11.25

Overview

The National Audit Office published today its "gold standard" for project control of major defence projects. This aims to help the MoD improve its performance in delivering projects on time and to budget. It forms part of a second in a suite of studies exploring key project success factors and how the MoD and its industry partners can better deliver success. Project control means having the right processes in place to track progress and keep projects on course.Some defence projects compare favourably with the "gold standard" and a number are at the very forefront of good project control. Trojan and Titan armoured engineer vehicles and the HMS ILLUSTRIOUS aircraft carrier refit are two projects which performed particularly well against the "gold standard". However, there is a wide variety of performance and the MoD and its industry partners need to improve the consistency of application of the "gold standard" principles to stand a greater chance of meeting their time and cost targets on projects.

Report Highlights

Success depends on building and sustaining the right relationships between all parties to a project. There are strong examples where the MoD is building open relationships with its contractors. However, yet more needs to be done to develop a supportive and open environment where staff can routinely report bad news as soon as it happens to provide early warning of problems.
Private sector organisations that face similar challenges such as BP, Ericsson and Eli Lilly show that the MoD tends towards optimism in setting performance, time and cost targets. The MoD recognises this is a problem and is taking steps to remedy it.

The MoD uses the same set of tools and techniques for monitoring projects as similar commercial organisations but the balance between their use varies. For example only 44 per cent of project teams used external cost or money spent as an explicit measure of progress achieved compared to 78 per cent of commercial project managers surveyed. On the other hand, compared to the commercial survey, more MoD teams are using a joint risk register with their suppliers which is a good way of ensuring that both parties have a common understanding of the challenges of a particular project.

The NAO also found that the MOD’s newly implemented system for reporting system status is moving in the right direction and is likely to provide better, more timely and accurate management information. However, the MoD does not have a single, consolidated reporting system such as that recently introduced by the United States Department of Defence for reporting project status across all parts of its acquisition organisation.

In addition to the report the NAO is publishing a wide variety of supporting material on its website. The challenge for the MoD and its industry partners will be to learn from their good experiences and those of other organisations to help deliver more successful projects.

Sir John Bourn said:

"Comparisons with the private sector and other defence departments show that at their best, UK defence programmes compare well with good practice in project control. However, the good practices are not being consistently applied in all cases. Project control is vital to successful delivery of projects and our gold standards and recommendations set out in this report mean the MoD and its industry partners should have a clear idea of what they are striving for to consistently deliver successful defence projects."

Notes for Editors:

  1. Press notices and reports are available from the date of publication on the NAO website, which is now at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  2. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 800 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

Press Notice 34/05
All enquiries to Mark Strathdene, NAO Press Office:
Tel: 020 7798 7183
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