£270m in procurement blunders threaten defence agency's future

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The Independent Online

Ministers face fresh embarrassment over the Government's poor record of buying military equipment, with the disclosure of six new projects that have run aground costing the taxpayer well over £270m.

Ministers face fresh embarrassment over the Government's poor record of buying military equipment, with the disclosure of six new projects that have run aground costing the taxpayer well over £270m.

Top of the list of project failures is a plan to buy eight Chinook Mk3 helicopters from Boeing. The helicopters were supposed to be used in the Iraq and Afghanistan wars, but they failed to meet British safety standards and have remained grounded.

According to the latest accounts of the Government's Defence Procurement Agency (DPA), £205m has been written off on the £259m project.

The revelation comes just under three weeks after the National Audit Office revealed that cost overruns on the 20 largest defence projects had soared by £1.7bn pounds. And on Friday the spending watchdog again attacked the Ministry of Defence for ordering the equipment it needed to invade Iraq at the last minute.

The DPA accounts also show that the Government has written off the entire £65m value of a project to build an effluent treatment facility at Britain's nuclear weapons centre in Aldermaston, Berkshire.

New waste regulations and a long row with the building contractors meant that when the facility was completed it did not meet current standards. "We decided that there was no future for the facility," said a DPA spokesman. The report reveals four more project blunders, although the DPA has yet to calculate the exact losses.

Peter Spencer, DPA chief executive, admitted that the organisation had failed to meet its targets on customer satisfaction, cost growth and programme slippage. He also said that a new system by which the Government buys military equipment, called Smart Acquisition, had yet to fully deliver.

The report comes at a bad time for the DPA. Whitehall sources said that the Treasury was becoming more frustrated by the DPA's failure to meet its targets. "There are no concrete plans yet, but after the general election something draconian will happen to the DPA," said a well-placed source.

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