A Lack of Skills

Returning to a common theme, a recent story from ADS described how Frazer Nash had won an MoD contract;

Engineering consultancy Frazer-Nash has won two competitively tendered bids to provide comprehensive safety & environmental and information security technical support for DE&S TSSP (Training and Simulation Systems Programmes) – the MoD team who provide training and simulation systems for the army including virtual reality targetry training and low level urban skills training.

Safety, environmental and information security is now being outsourced.

Instead of civil service rates the MoD is paying consultant rates, not for highly specialised areas or those that only have a short shelf life, basic internal project governance and support activity.

The MoD makes bold claims about reducing its reliance on consultants, in fact, it is rather monotonous to see the claim repeated on a regular basis. What they don’t discuss though, is how consultants and contractors are insulated from the MoD by use of an intermediary company.

Same old reliance on external skills but with an additional profit margin to pay for.

Great result that one.

With the politically driven need to reduce civil service headcount and reliance on consultants the MoD is divesting itself of institutional skills and experience

Whether this increases or decreases actual costs is unknown but one thing is certain, the MoD is losing skills and experience by outsourcing, or forming strategic partnerships in the parlance of the day, at a time when most of the commercial world is realising that too much outsourcing is a bad idea and bringing activities back in house makes a lot of sense.

DE&S

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From Luddite Lodge
From Luddite Lodge
July 27, 2015 8:57 am

remember an ex is a has been and a spurt is a drip under pressure.
On a more serious note, one issue that is perhaps wider is how much expertise now is there in Parliament ? What experience does a twenty year old MP have or what expertise does an MP who is a product of their party’s fast track system have?
The civil service can only deal as they are instructed, at least I hope that’s the theory.

CG1
CG1
July 27, 2015 9:06 am

I’d like to see a figure showing how many people work more than 50% of their time on government contracts (either directly or indirectly) so we can find out how many people are really in the de facto civil service. I’m sure when we add in NHS, Local Government, Museums, government contractors etc it will be illuminating as to how many are ‘public’ and how many are ‘hidden’.

The Other Chris
July 27, 2015 9:07 am

Dipping into TD’s archives:

“DE&S is planning to spend £250 million over the next three and a half years on contractors to advise on how it can reduce its over reliance on contractors.”

Source: https://www.thinkdefence.co.uk/2015/03/selling-off-the-family-aluminium/

stephen duckworth
July 27, 2015 9:33 am

I wonder if they paid the RN engineers the same rates as consultants we wouldn’t have a recruitment and retention problem (or any of the many discipline’s we have shortages in)

Not a Boffin
Not a Boffin
July 27, 2015 10:04 am

An alternative way of looking at it might be that MoD is paying for a package of work in support of a particular procurement, or procurements for the IPT. Much of the safety and environmental element of these things tends to be a process-driven exercise, where the real “technical” expertise remains within the MoD, but the execution of the process requires several disparate areas that appear under “safety & environment” to be wound together. It may also be that FN are executing the ISA role (they’ve done this before for a number of projects) which requires independence from the project team.

Just a thought.

Engineer Tom
July 27, 2015 10:47 am

In terms of Safety and Environmental within a procurement context surely the vast majority of it will sit within the suppliers organisation with the MOD (and other outside bodies) auditing them periodically to make sure they adhere to international standards.

I have sat through at least 3 seminars over the last year on it, but as non of it actually applies to me (we still have to be aware of the process) I can’t remember how exactly the process is audited by our customers, but I do know that we bring in monitors and assessors to independently check on our progress as an organisation, and that we audit our suppliers to make sure they are up to standard. It is probably one of the fastest growing areas within engineering.

In terms of the TSSP example DE&S is acting as the supplier and so they would need to have a Product & Environmental Safety team. This could be an issue if they haven’t had to do this previously or not at the same scale, there may also be a conflict of interest if DE&S is also acting as the customer for the contract and so the safety team would be required to audit itself, they also as an organisation may not meet the required standard or have calculated it as being to expensive to achieve the said level and so decided it is cheaper to outsource. More likely they looked at it and realised that they didn’t understand it and decided to hire someone who did.

Deja Vu
Deja Vu
July 27, 2015 11:02 am

“You hire a consultant to tell you the time, he asks to borrow your watch, tells you the time and keeps your watch.”

Engineer Tom
July 27, 2015 11:14 am

@ TD

Exactly, but as a customer we still send someone to our suppliers to sit down and check they have all the certificates up to date etc, I didn’t mean that we in depth audited our suppliers but we still have to check they comply. Then we have to provide proof that we have checked our suppliers to our customers so that they have confidence in the parts we have used in the product.

Observer
Observer
July 27, 2015 1:04 pm

Can’t laugh at you guys. I just came back from a refamiliarisation/training stint where I was taught for a week by civilian instructors. From what I heard from the consultants, the army has a fixed manpower structure where they have to move out after hitting retirement age (that guy I spoke to had 40 years in the army). If they did not push out the “old guys”, the lower ranks will have no chance of promotion, which often means that they bail out looking for a better future, so to balance the scales, they toss out the old guys into “civilian consultant” positions to make room for new blood, yet hire them as civilians so they don’t lose the expertise.

Engineer Tom
July 27, 2015 1:16 pm

I had an uncle in the Army, working out of Abbey Wood, who came up for retirement, his job was transferred to the MOD, he kept the same office, responsibilities and everything they just gave him a massive pay rise to get him to the right level on the MOD pay scale.

A Caribbean Perspective
A Caribbean Perspective
July 27, 2015 2:00 pm

If an organisation is doing things correctly, it keeps a small core of permanent experts, paid at the appropriate level to retain them and adequate for handling the “normal” workload. “Consultants” (i.e. fixed-term contract workers) should only be hired when a project comes along, that a) is too large to be handled by the permanent staff, and b) requires that larger number of people either for a specific period or in order to reach a specific target. At the end of the project, the consultants can then be dumped without having to pay redundancy money and the regular staff return to normal activities.

In reality, too many companies retain a large group of “managers” and very few (usually underpaid) SME’s. Consultants are then used to a) provide a team for the managers to manage, b) do the boring stuff that the few remaining technical permies don’t want to do and c) be first out the door when senior management demands economies, thus protecting the permanent staff from redundancy.

Been there, done that – 20 years as an IT Consultant for large banks.

Chris
Editor
Chris
July 27, 2015 2:42 pm

ACP – ref retention of management – for reasons never entirely clear, the highest status positions in most companies are those of Managers and Directors. You can sort of understand the Director status, particularly if their position also requires them to hold a substantial stake in the business, but Managers? One of my friends a long time back was a department manager in a Building Society HQ; in her 20s she had an office of 40 admin staff to look after. Her skill was in task allocation such that all staff were busy and none were overloaded and floundering. That skill would be entirely commutable to other businesses; the content of the tasks was not important, the even distribution and efficient throughput was.

I have seen very clever engineers promoted to management (the only way to progress in many companies) which had the dual effect of preventing them from doing the job they were really good at, and giving them a job for which they were at best adequately skilled. Most of those questioned over a pint muttered they had really wanted to keep doing engineering but there was no engineering promotion path available; for the sakes of a better pension they had to move into management.

It must be so much easier to find skilled managers than skilled technical staff, and yet due to the ‘really important’ nature of the manager in UK companies they still get greater prestige, authority and remuneration. There is a constant bleat from industry that there is a shortage of skilled technical staff, and yet the wages/salaries offered are among the lowest. Maybe there’s a connection?

The Ginge
The Ginge
July 27, 2015 3:16 pm

1) There is a reason the word “Con” is at the start of the word Consultant.
2) Never let anybody tell you that “I am a manager, its the skill of managing thats important not the technical ability to understand the processes” beleif me having cleaned up the mess of periods within my organisation when this became the fad all Managers must fundamentally be able to talk shop with the person doing the work, otherwise they just get fed Bull Shit.
3) There is no such thing as a “Technical Pathway for Prmotion” I work for a company where they set up a specific Technical Team, to promote all of us who know what we are doing, leaving the minions supervised by “manages” who don’t have a clue what their littel minions are doing, we ten in the Technical Group have adopted the flag of the Mushroom, kept in the Dark and Fed on Bullshit. We get told nothing, never get invoted to any strategy meeting, decisions are made and then we are seen as negative when we point out legally, morally and ethically the great idea of the minion won’t work.
The only time you are asked in is when a minion has blown something up, we are being sued and it looks like costing a few tens of millions, at which point the “Boss” goes its your’re problem shovel that Shit, and it better not hit the fan, instead of asking our opinion before he let the minion out with the proverbial hand granade, we could have pointed out pulling the pin and holding it wasn’t a good idea.
Consultants are only beaten to being the most useless type of employee by accountants. Less you have of both, then less of the 3rd type of useless employee the Lawyer you will need !!

Engineer Tom
July 27, 2015 3:17 pm

I always think the German system whereby Engineers are given a status similar to Doctors could be useful, purely to differentiate the Virgin Media repairman from someone who has put 10 years into getting Chartered Engineer status, it would also see more people looking at becoming chartered.

The Ginge
The Ginge
July 27, 2015 3:18 pm

PS Sorry about the spelling seem to have a dodgy keyboard.

A Caribbean Perspective
A Caribbean Perspective
July 27, 2015 3:58 pm

Ginge, thanks for the gratuitous insult. There is actually a far more useless type of employee (consultants are not employees, by the way ). It’s the type that sits in the same company for 20 years and thinks that what they learnt at college is still relevant. When it all gets too much for them they recruit a consultant with recent experience of exactly the problem that they are facing. They then spend the next six months ignoring the one person on their team who knows exactly what to do, while they try to re-invent the wheel, meanwhile the expensive consultant sits there doing the boring day to day stuff that the permie doesn’t want to do (so there is always a massive backlog, because they have been ignoring it for the last two years ). Then, when the consultant leaves, because he wants to keep his skills current, he fulfills his true role as scapegoat for the fact that the project has made no progress.

dgos
dgos
July 27, 2015 4:05 pm

I was once asked was I an Engineer or a Manager – I answered that to ‘engineeer’ was by definition to manage – unless I misunderstood my english!

Did’nt get the job.

Screwed some smart Alec IT contractor for £50 K liquidated damages – I was upset when they implied I could not understand technical spec. so I showed them I could – spent hours going through it til I found weakness!

Engineer Tom
July 27, 2015 4:22 pm

What would an Engineering Manager be counted as?

A Caribbean Perspective
A Caribbean Perspective
July 27, 2015 4:27 pm
Reply to  dgos

@dgos – good for you – I’m sure his insurance company loved you (you realise he had Professional Indemnity insurance, don’t you – for independent contractors it’s usually a condition of the contract). I have plenty of war stories myself of (customer-written) specs that were gibberish and companies that didn’t write code to match their specs. One of my last contracts in the UK was damage assessment and rectification for a personal investment company that had written code that didn’t implement what it put in it’s policy prospectus. The damage to it’s standing with the regulators was so great that It no longer exists as an independent company. The many millions it cost to compensate it’s customers probably didn’t help either.

In my experience management is definitely a different skill from engineering. It’s just a shame that in too many companies it’s the bad engineers who end up in management, rather than the good managers.

paul gayler
July 27, 2015 9:34 pm

“purely to differentiate the Virgin Media repairman from someone who has put 10 years into getting Chartered Engineer status” Funny ol’ thing when I was working for virgin media there 3 guys with engineering degrees working as repairmen. and 2 others who had about 35 years between them, the 2 guys had been on a 2 year £54k pa contract and on renewal were offered the job at £24K, why? because the had two east European guys who would do it for £20K. These guys needed work ASAP to pay the bills

A Caribbean Perspective
A Caribbean Perspective
July 28, 2015 3:02 am
Reply to  Chris

– its basic management structure – the Directors are the owner’s (i.e. the shareholders) representatives. The shareholders put up the money, so they, via the Board of Directors, decide what the company does. The objective of any company and the legal duty of the Board of Directors is to maximise the return for the shareholders.

The executive (i.e. the CEO and subordinate management are there to implement the strategy determined by the board. Everyone (and everything) else is simply an asset to be exploited to achieve the objectives laid out by the Board.

Unfortunately, in recent years, the focus of the Senior Executive in many companies seems to have shifted to maximising the short-term return for the Executive. Whereas in the past, investment in staff training and retention of skilled staff was seen as one of the keys to long-term growth and prosperity for a company, the current thinking seems to be that this quarters bottom-line is all that matters, so that they get their massive bonus’s for a few years and then move on to the next job, trumpeting their success at keeping costs down and maximising profit (just ahead of the massive crash that comes from years of under-investment in training and skill retention).

I’m not sure that it is actually easier to find skilled managers than skilled technical staff – I have met very few of the former and a lot of the latter, but it is, indeed, a fact that while management is perceived of as “higher status” and is better rewarded than being a techie, there will continue to be a shortage of good technicians.

Chris
Editor
Chris
July 28, 2015 8:09 am

ACP – there has been a significant rise in prevalence of both short-termism and a focus on selfish benefit over the past 30 years. Not in any particular section of society but across the whole. In business this shows as the dash for cash – any action is supported if it creates the maximum instantaneous profit, whether that’s workforce reduction, change in employment conditions, shady use of funds, selling out to an asset stripper or any one of a hundred different get rich quick schemes. Doing right by the workforce or local community, preserving the business for future generations, embarking upon philanthropic programmes and so on are now considered signs of weakness in a company where once they were exemplars of strength and steadfastness. For the individual the shift in mentality shows as a perpetual hunger for faster easier 24hr access to everything; the belief that “I want! get’s” (the phrase I was taught was “I want! doesn’t get”), a much sharper focus on me me me serviced by a pocket brain that brings a thousand uncaring Fbook friends to watch and gush congratulations upon every bland aspect of the individual’s unexceptional life, and an incredible compulsion to invent a glam ‘lifestyle’ better than everyone else’s even though its all bought from the same catalogues. In both business and private life, the modern mantra is “I want it all, and I want it NOW!”

I was fortunate enough to work for a company that had remained true to its original 1920s principles – the workforce was astonishingly loyal, many were third generations having been apprenticed into the business, the company was very socially minded, it was rooted in its location and was a part of both civic and community fabric. It was an absolute joy to see how well an ‘old fashioned’ company worked; the company looked after its staff and the staff would do anything for the company. Needless to say, modern financial pressures eventually took over (with a change of MD) and the town lost the company as it engaged in takeovers and mergers and moved away. All the corporate buzzwords were evident – exciting development, new challenges, business growth, world class. Its meteoric grab for greatness at the expense of all of its founding principles resulted in a grab for cash by its new-found shareholders; the company fizzled out of existence when the board sold the business to a huge corporation. Hey ho.

So I am in full agreement – there is no appetite for long-term strategy, for apprenticeships, for training and nurturing staff within the modern environment. Shareholders are no longer the pillars of the local community concerned as much with the company’s effect upon their town as with the dividends. What does a shareholding (for example) Qatari equity fund care about (for further example) Gloomyville, or a shareholding Russian oligarch care for the social wellbeing of your part of the Caribbean? Localism was once a power of good for communities, globalisation is a power of good for return on investment. The modern world has decided the latter is more important than the former.

Chris
Editor
Chris
July 29, 2015 7:14 am

Not really related directly to defence, but I was just searching the web for high quality low impedance electrolytic capacitors. The search brought up a company called BHC, sited in Weymouth. Or at least it was until 2012; it had been bought by Kemet, an American corporation, presumably because it designed and made very high quality product, but then the US accountants stepped in, decided another of their acquisitions in Portugal had lower costs, so told the Weymouth site it would be closed with the product line going to the Portuguese producer. In one fell swoop the design team and the apparently loyal skilled workforce (some had been employed there 30 years) were dumped; the US corporation sent Portuguese workers to the Weymouth site for a couple of weeks to learn how to operate the custom-designed manufacturing machinery. I have no idea what reputation the company in Portugal has, but its clear in the search for a few cents more profit the corporation wiped out the quality British concern, a company for which they paid presumably because it had skills they wanted.

There is a phrase: Knowing the price of everything and the value of nothing.

Darned Consultant
Darned Consultant
July 30, 2015 11:46 pm

Sadly it is a self evident truth that the MoD and succesive governments have, in general been deskilling in terms of Safety Engineering, Environmental Assessment and to an extent information security.
It started with the just about wholesale privitation if independent test and evaluation and research when places like A&AEE and DRA were moved further and further into industry, ending with QinetiQ.
Personel were progressively asked to do more with less, seeing their industrial compatriats with better pay and conditions (I should know, I was one of those who looked at the colour of the grass in industry and thought “I’ll have some of that”).
The MoD also has a prepensity to reinvent the wheel whenever possible, for example rewritting guidelines for things like ISO14001 type activities into POEMS, it wasn’t as if in real terms this was needed. It also somehow decided that “getting industry to prove the safety/environmental/security was good enough seemed to allow them to forget that they needed the skills to intelligently question and challenge industry. Hence we now have industry doing the work, with another industrial body telling the MoD what to think and maybe another one doing some independent checking.
I’m a little surprised that FN have managed to corner the market, for many years there was a swathe of industrial consulting firms able to be called in for this type of work. (to be honest tho, this quite often led to jobs for the boys, the MoD always liked to give work to its friends, or people it knew, so new contractors had a job getting a look in).
Some time ago a friend of mine said in the US, defence contractors aspired to be perminant staff, whilst in the UK, it worked the other way round. Until the MoD pays and rewards internal staff to a level where consultants want to work there, nothing will really change.

Mr Taxpayer
Mr Taxpayer
August 19, 2015 9:20 am

I work in a company supplying the MOD. It seems from my perspective that the consultant’s role is cause as much delay and obfuscation as possible, thereby justifying their hiring. It’s like if they said “Yep, that’s fine” about the product, that the MOD would cancel their contract and not hire them again. The whole mess with the MOD is the fact that the buyer is rarely the end-user.

Chris
Editor
Chris
August 19, 2015 10:17 am

Mr T – when the NAO looked into major MOD contracts and reported them by value, the biggest single outlay beyond the likes of Astute, carriers, FRES/Scout, Typhoon and F-35 were consultancy contracts to the likes of KPMG, PwC, Deloitte and Ernst & Young. These extraordinarily expensive consultants were employed with the task of making the likes of DE&S more efficient; their recommendations I understand were that the DE&S should contract out much of their work to – well, guess who?

MOD reported “CH2M Hill has been offered the contract for project delivery in the Land and Joint Enabler areas, with Bechtel offered the contract for the Air and Fleet areas. The human resources contract has been offered to PwC.” yes that’s the same PwC that advised MOD on their strategy. Sadly for the big consultancies, President Obama prevented them picking up the main procurement management contracts when he threatened UK Gov’t that the US would consider refusing military contracts with the UK unless the management companies were American. Hence the US giants Bechtel and CH2M Hill doing those bits.

The Times in October 2013 reported “Three former Ministry of Defence civil servants and one of David Cameron’s close advisers recently joined Bechtel, the American engineering business that is bidding for two huge military outsourcing deals. The exodus of talent from Whitehall to the engineer has raised questions over potential conflicts of interest. Bechtel is chasing a contract to manage and maintain the ministry’s estate of land and buildings, known as the Defence Infrastructure Organisation (DIO), which costs £2.9bn a year to run. It is also leading a consortium to bid for control of the agency that buys fighter jets, submarines and tanks. The part-privatisation of Defence Equipment and Support (DE&S) is down to just two contenders. Bechtel is up against CH2M Hill, a rival American engineer.”

One of the civil servants that jumped to Bechtel was Anthea Dolman-Gair; prior to the jump she was high in the DE&S organisation specifically working on the procurement restructuring programme. In an ‘independent’ report by Bernard Gray called “Review of Acquisition” in 2009, he wrote this acknowledgement: “Anthea Dolman-Gair from the Ministry of Defence has shone as a star throughout this process, and her dedication and commitment are in the best traditions of the Civil Service. We are indeed fortunate as a nation that people of Anthea’s talent are prepared to devote themselves to public service.”

So I suggest the whole mess has less to do with the Buyer not being the User, and much more to do with vested interests both corporate and personal which are allowed to pervert the decision making process. Its become an industry in itself, with colossal processes and a vast hunger for backside-covering data – the supply of materiel of adequate and affordable quality in the shortest timeframe does not seem to be a priority. And with a vast and convoluted process the opportunities to inject bias are manifold and essentially invisible.