§ Lord Burnham asked Her Majesty's Government:
§ Whether, now that the Bowman radio is operational with a full in-service date of 31 March, they intend to write off the costs incurred during the period of the abortive Archer bid from 1988 to 2000.
§ The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)
My Lords, when we removed preferred supplier status from Archer Communications Systems Limited in 2000, we recognised that not all of our expenditure with the consortium would subsequently be of direct benefit to delivering the Bowman tactical communications system. We have concluded that £51 million, or about one-eighth of the total spend prior to the main investment decision in 2001, falls into this category.
My Lords, that is a slightly better Answer than I was expecting. What is the total overspend on Bowman since the project started at the beginning of the 1990s? What is the total expenditure, say in the past five years, on all aborted projects in the Ministry of Defence?
§ Lord Bach
My Lords, I would very much like to be able to answer the noble Lord with an accurate figure. With great respect to the noble Lord, I am afraid that without notice I cannot give him a proper answer. Since my noble friend Lady Symons of Vernham Dean, who held this position before me, decided to remove the preferred supplier basis consortium and a competition was relaunched, the procurement record has been excellent. That is why we are still aiming for an in-service date at the end of March 2004.
§ Lord Bach
My Lords, our planning assumption was for Bowman to be delivered into service no later than December 2004. We deliberately, perhaps not surprisingly given the history of this equipment, set ourselves a challenging task for an in-service date of March 2004. Excellent progress has been made in the 30 months since contract let. We and our suppliers continue to work hard together across all the elements of military capability, and we are currently on track to achieve the target. Progress over the coming weeks will inform our judgment about the readiness of all the 1202 elements of military capability, including equipment, training and logistics, for in-service date to be declared.
§ Lord Taylor of Blackburn
My Lords, is the Minister satisfied that there are sufficient safeguards through the various auditing commissions to watch every penny that is spent?
§ Lord Redesdale
My Lords, can the Minister say when it was originally envisaged that Bowman would have entered operational service? Does he agree that although the overspend—which seems massive from these Benches—is one aspect, the other aspect, which for the Army is of far more concern to those looking at procurement investment, is the delay that it has taken for the Army to receive this system in-service?
§ Lord Bach
My Lords, I have already conceded that it is not a happy story. It goes back to 1988. Noble Lords will know that I am not making a political point about this, because that is not appropriate for defence procurement issues. Right through the 1990s, including when we were in government, the project moved forward at not a very rapid pace. When the Archer Communications Systems Limited consortium was set up in 1997, there were high hopes of it. As I have already told the House, by 2000 it was clear that that consortium was not going to deliver as appropriate. That is why we have since then—I hope that the House and the noble Lord will agree—taken action to ensure that this vital communications system comes into operation as soon as possible.
§ Lord Tebbit
My Lords, is the Minister aware that he omitted to answer my noble friend's question concerning the total overspend on this project? Perhaps he could deal with that now.
§ Lord Bach
My Lords, it is not a total overspend. The amount of money spent on this project was £397 million, of which £202 million was spent during the time of the Archer consortium. Our calculations are that a great amount of that money has proved extremely valuable in risk reduction, which as the noble Lord will know, is absolutely crucial to getting a piece of equipment into operation. The figure that has not played a part in risk reduction is the figure of £51 million that I gave in my Answer.
§ Lord Astor of Hever
My Lords, in the light of the Minister's earlier response about the trial of the new system, when is it hoped that the new system might be made available to units serving in Iraq?
§ Lord Bach
My Lords, we always recognised that full operational capability would be achieved incrementally. That is one of the reasons that we have done so well with this project. In line with normal practice, the first brigade converted to Bowman will 1203 undertake a further 15 months of unit and collective performance training. It is all part of the force programme to achieve war-fighting operational readiness in 2005. As regards peacekeeping, the system will be operational from, we hope, March 2004.