§ Mr. Frank Allaunasked the Minister of Aviation how many accountants are employed in his Department in checking the estimates of firms making guided missiles; and how many were so employed five years ago.
§ Mr. SandysThis task is carried out mostly by the technical staff, but the Department's accountants, of whom there are eighty-eight, give such assistance as may be required.
§ Mr. Frank Allaunasked the Minister of Aviation how many skilled planning engineers are employed in his Department in checking the proposals of companies making guided missiles and how many were so employed five years ago.
§ Mr. SandysOver 500 skilled professional and technical staff are currently employed in my Department on guided missile work, an important part of which is checking proposals for development and monitoring the subsequent work. No comparable figure is immediately available for five years ago, but the numbers were much smaller.
§ Mr. Frank Allaunasked the Minister of Aviation what share of the additional expenditure involved in making guided missiles has been borne by the contractors.
§ Mr. SandysFor the reasons I have already explained to the House, the course suggested by the hon. Member would not have been appropriate.
§ Mr. Frank Allaunasked the Minister of Aviation (1) whether there was a break clause in contracts for the three guided missiles estimated to cost £8 million and eventually estimated to cost £110 million;
(2) how many of the contracts for guided missiles were on a cost-plus basis.
§ Mr. SandysA break clause was included in the contracts for these three missiles and the work is being paid for on the basis of reasonable costs plus profit. In view of the many novel technical problems and other unknown factors involved the cost of development could not be estimated accurately. It was therefore impracticable to place the contracts on any other basis.
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§ Mr. Frank Allaunasked the Minister of Aviation (1) what checks have been introduced on current contracts for the development of guided missiles to prevent a recurrence of gross underestimating on defence contracts;
(2) what steps have been taken within his Department to tighten up the check on estimating, since earlier revelations of mistakes connected with the Swift, the Vickers V 1000, the Sperrin and the Sturgeon.
§ Mr. SandysThe improvement of financial control including that of estimating the cost of projects is a continuous process to which my Department has devoted considerable attention over the last few years. As part of the process, studies have recently been made of methods of improving the procedures and techniques for preparing estimates of the cost of development projects. As a result, some changes have been made. However, it must be recognised that in the case of the development of an equipment of an entirely new or greatly improved type and involving the use of new techniques and skills, it is usually quite impossible to predict accurately at the outset either the course of the development, or the amount of effort that will be involved. Sometimes it is not even possible to be sure in advance that the technical problems involved are capable of satisfactory solution.