2015 Report details for project: Logistics Commodities Services Transformation

Project name: Logistics Commodities Services Transformation - there are 6 reports for this project: 2013, 2014, 2015, 2016, 2017, 2018
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Organisation: MOD (D17) - see all reports for this organisation
Report year: 2015 (data is from Sept 2014)
Category: Military - see all reports for this category
Description: The rationale for LCS(T) is built around the need for a future operating structure that adopts the core fundamentals; - A first principle of certainty of Military supply and; - A secondary principle of cost minimisation The scope includes all activity that the LCS Operating Centre is currently responsible for with the exception of British Forces Post Office, Disposal Services Agency, Bulk Fuels, Blood Products and Medical Counter Measures. The activity within scope falls into four broad areas - 1. supply chain integration, 2. commodity procurement and inventory management, 3. storage of 'non-explosive' stock items and 4. distribution of non-explosives and munitions.
DCA (RAG): Amber
DCA text: The programme reached another significant milestone in August with the receipt, on time, of the three bids (the two commercial bids and the In House Proposal). There were clearly still challenges ahead with the evaluation of the bids to be undertaken and the formal approvals process to complete, hence the Q2 delivery confidence rating. Since the period of this return a robust and thorough evaluation process has been undertaken which included bidders submitting a Best And Final Offer (BAFO). To provide added rigour to the process an external independent observer was appointed. Alongside the evaluation the regular engagement with the approvals community (including HMT and CO) was stepped up to ensure that the resulting Main Gate Business Case met the needs of all parties. The Business Case was approved by the MOD's Investment Appraisal Committee and the Defence Board in January 2015.
Start date: 2011-08-01
End date: 2018-02-01
Schedule text: No change. The Business Case was approved by the MOD's Investment Appraisal Committee and the Defence Board in January 2015.
Baseline: £12.17m
Forecast: £11.85m
Variance: -2.60%
Variance text: Budget variance less than 5%
Whole Life Cost: £803.73m
WLCost text: At the time of the submission the total budgeted whole life cost did not meet the forecasted requirement to deliver the transformation (£897m). The variance is mainly in 2015/16 and 2016/17 and relates to additional implementation costs such as rebrigrading incurred during transition. As part of the Main Gate Business Case approval process the MOD Defence Board approved the additional expenditure required. The case estimated total savings of £0.5bn over the 13 year life of the contract.
Sourcefile: IPA_2015.csv

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