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14.1  |  Military equipment (post-conflict)
870.  The DEC’s proposal would “relieve some of the pressure” on the Phoenix Out of
Service Date (OSD) but there was a risk of a capability gap between the Phoenix OSD
and the Watchkeeper ISD:
“An analysis of the availability of Phoenix for future operations (whatever they may
be) when considered in light of the introduction of Watchkeeper, has indicated that
there is a risk of a capability gap developing. We will not be able to quantify this
fully until the repair situation on Phoenix is better understood. However, work is
in hand to look at options for mitigating this risk, including re‑opening the Phoenix
production line …”
871.  AM Stirrup warned Lord Bach that the DEC’s update must be “put in context”,
noting the “considerable success” of UAVs during combat operations and indicating
that the capability gap had arisen because UK forces had entered a new phase in
operations.
872.  On 25 June, the House of Commons Defence Committee took evidence from Lord
Bach, Sir Peter Spencer and Lt Gen Fulton on the progress of the MOD’s Equipment
Programme.462
873.  Asked why the Watchkeeper programme could not be accelerated, Lord Bach said
that “some elements” would be in service by “late 2005”. Concern was expressed by the
Committee that the MOD should not put its “head in the sand”, delaying the introduction
of Watchkeeper to the extent that “by the time it comes out, the concept has already
moved on”.
874.  The Chairman finished the line of questioning by saying that the project should
be watched closely “because the military requires it and requires it to be done pretty
damned quickly”.
875.  In its subsequent report, the Committee stated that the Watchkeeper and FRES
programmes both exemplified the MOD’s efforts to “bring important new capabilities into
service more quickly”. They also highlighted that, in conflict with the desire to speed up
progress, the MOD had maintained a cautious approach in both with a view to reducing
project risks. That demonstrated that the MOD was still finding it difficult to balance
“increased agility against decreased risk”.
876.  On 26 June, the DMB endorsed a paper from Mr Colin Balmer, MOD Finance
Director, on investment priorities for 2004’s Equipment Programme (STP/EP04).463
Network‑enabled capability and deployable ISTAR were two areas of “vital ground”
that Mr Balmer suggested that the DMB should protect.
462  Eighth Report from the House of Commons Defence Committee, Session 2002‑03, Defence
Procurement, HC 694, para 18 and evidence session from 25 June 2003.
463  Paper Finance Director [MOD], 20 June 2003, ‘Defence Strategic Audit and Guidance for STP/EP04’;
Minutes, 26 June 2003, Chiefs of Staff meeting.
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