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Shortcomings in the implementation of defence equipment procurement projects in the Norwegian Armed Forces - Document No. 3:16 (2004-2005)

The Office of the Auditor General has examined 19 defence equipment procurement projects in the Norwegian Armed Forces.  Seven of these projects are four years behind schedule. Eight of the projects have incurred costs which are significantly higher than the originally approved budget. Four projects have delivered equipment showing substantial shortcomings. These findings emerge from Document no. 3:16 (2004–2005) The Office of the Auditor General’s investigation of defence equipment procurement projects in the Norwegian Armed Forces, which was submitted to the Storting on 29 June 2005.
Published 6/29/2005 1:00 PM

The ability of the Armed Forces to fulfil their stated obligations is dependent on timely deliveries of planned equipment, and that the equipment complies with stated operative and technical requirements. These demands are also important in order to achieve satisfactory training levels. The Armed Forces’ equipment procurements amount to between NOK 6 billion and NOK 8 billion annually.

The purpose of the Office of the Auditor General’s investigation was to assess the achievement of goals in the Armed Forces’ equipment procurement projects with regard to the management factors time, cost and quality. The investigation comprises an assessment of 19 procurement projects of varying sizes, distributed among the service branches Army, Air Force and Navy.

Goal achievement for time, cost and quality

The investigation undertaken by the Office of the Auditor General shows that key defence equipment procurement projects for the Armed Forces have been significantly delayed and have incurred substantially higher costs than originally planned. The investigation also raises the issue of whether the shortcomings pertaining to goal achievement related to key equipment procurement projects and deficiencies in the management of individual projects have affected the operative capabilities of the Armed Forces. As an example, the Coast Guard has been negatively affected because the air surveillance radar system procured for the ocean-going Coast Guard vessels has not functioned as expected. Deficiencies in the radar system have resulted in reduced deployment of helicopters in adverse weather conditions and during darkness.

Response from the Ministry of Defence

The Ministry of Defence is of the opinion that the achievement of goals in defence equipment procurement projects should be assessed against the most recent set of accepted goals, and that changes occurring underway may also reflect appropriate management and control provided that requirements for improved quality are defined in approved documentation of decisions.

The Ministry of Defence agrees that development of competence is important in equipment procurement, and that frequent changes of key personnel should be avoided. The Ministry points out that an assessment of the ability to deliver is one of the criteria currently included in the external quality assurance of category 1 projects. The Ministry emphasises the importance of being able to change the scope of projects as the need arises, and is of the opinion that current routines for undertaking changes of scope function in a satisfactory manner. The Ministry claims that the Armed Forces’ current system for managing equipment procurement activities is fully adequate.


Delayed public announcement of documents compiled by or for the Office of the Auditor General pursuant to Document 3:16 (2004-2005) has been lifted, cf. the Governmental Audit Act, section 18, subsection 2.

 

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