HC Deb 10 July 2003 vol 408 c933W
Mr. Hancock

To ask the Secretary of State for Defence pursuant to his answer of 20 June 2003,Official Report, column 510W, on defence procurement, what assessment he has made of the ability of his Department to forecast the in service dates (ISD) and costs of major procurement projects; what plans he has for ensuring that projects are delivered (a) on their forecast ISD and (b) on their original budget; and if he will make a statement. [122315]

Mr. Ingram

An important element of the defence "Smart Acquisition" process is the reduction of risk during the early phases of a programme so that at the main approval point ("Main Gate") there is a high level of confidence that project targets, including ISD and budgets, will be achieved. In support of this risk reduction process the use of a Three Point Estimating methodology for both time and cost has been approved.

To ensure the quality of our estimating the Department provides guidance, training and computer tools to support the process. In addition specialist support for both the production of estimates and the risk management process is available.

The Defence Procurement Agency this year created two teams to support project offices across the Defence Acquisition community in using a systematic methodology for risk management and estimating. A key element of this initiative is the use of a Risk Maturity Model to assess major projects against a number of perspectives, including whether risks have been fully identified and analysed, whether risk mitigation controls are being managed as planned, and whether the projects are positioned to provide robust and reliable estimates of both time and cost to completion.

The Model assessment gives an indication of how well risk and estimating are being managed within a project through the provision of a Level score from 1, naive through to 4, natural. From March 2004, all of our high value projects seeking Main Gate approval will be expected to have achieved a score of Level 3 or better, which will mean that projects have built the management of risk into their routine business processes and are implementing risk management throughout the project.

The Department continues to monitor closely its performance in forecasting and continually seeks examples of good practice which may be adopted to enhance and improve our existing processes and performance.