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The British Antarctic Survey: Management of Ma,Or Capital Projects and Scientific Programmes

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The British Antarctic Survey: Management of Ma,Or Capital Projects and Scientific Programmes NATIONAL AUDIT OFFICE REPORTBY THE COMPTROLLERAND AUDITOR GENERAL The British AntarcticSurvey: Managementof Major Capital Projectsand Scientific Programmes ORDEREDBY THE HOUSEOF COMMONS TO BE PRINTED 23 MARCH 1993 LONDON:HMSO 572 f7.40 NET THE BRITISH ANTARCTIC SURVEY: MANAGEMENT OF MA,OR CAPITAL PROJECTS AND SCIENTIFIC PROGRAMMES This report has been prepared under Section 6 of the National Audit Act, 1983 for presentation to the House of Commons in accordance with Section 9 of the Act. John Bourn National Audit Office Comptroller and Auditor General 8 March 1993 The Comptroller and Auditor General is the head of the National Audit Office employing some 800 staff. He, and the NAO, are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have use their resources. THE BRITISH ANTARCTIC SURVEY: MANAGEMENT OF MAIOR CAPITAL PROJECTS AND SCIENTIFIC PROGRAMMES Contents Page Summary and conclusions 1 Part 1: Introduction 6 Part 2: The management and control of major capital projects 10 Part 3: The management control and evaluation of science research 21 Appendices 1. Case histories of the major capital projects 29 2. The science divisions of the British Antarctic Survey 33 THE BRITISH ANTARCTIC SURVEY: MANAGEMENT OF MAJOR CAPlTAL PRO,ECTS AND SCIENTIFIC PROGRAMMES Summary and conclusions 1 The British Antarctic Survey (the Survey) are an institute of the Natural Environment Research Council [the Council). The Council are funded by a grant-in-aid from the Science Budget, administered until recently by the Department of Education and Science (the Department) but, since 1992, by the Cabinet Office’s Office of Science and Technology. Gross expenditure on the Survey in 1991-92 was some E26.5 million (or f27.7 million at 1992-93 prices) of which El7.5 million (f18.3 million) were running costs. 2 The Survey’s primary aim is to execute a balanced programme of high quality science in the Antarctic. Their research also acts as a vehicle for the United Kingdom to pursue its objectives under the Antarctic Treaty of 1961. In recent years the Survey have made major scientific advances including the discovery of the “ozone hole” and research into global warming. 3 In 1983, Sir Hermann Bondi, then the Chairman of the Council, submitted proposals to the Secretary of State for Education and Science containing a detailed programme for the extension of the Survey’s research activities in the Antarctic. The proposals, commonly known as the “Bondi Programme”, were subsequently approved by the Secretary of State. As a consequence, the Survey’s annual funding was increased so that by 1984 it was f 5 million more than in 1982-83. However, these funds proved insufficient to carry out either the Bondi Programme or new funding demands with which the Survey found themselves faced. Since 1986, therefore, the Survey’s funding has increased substantially. 4 A large part of the increased funding undertaken since 1983 has been devoted to the following four large-scale capital projects: . a hard air strip and associated facilities, including a berthing jetty for ships, at Rothera Station in the Antarctic; . a new supply/science ship, the RRS James Clark Ross; l a replacement research station at Halley in the Antarctic; . the purchase of a De Havilland Dash 7 aircraft for conversion to Antarctic operation, in particular to the use of wheels and skis for take- off and landing. 5 In addition, funds have also been used greatly to increase the amount of the Survey’s scientific work. In response to this situation, the Council have formulated a new strategy for Antarctic research, which they set out in “Antarctica 2000”, published in June 1989. The strategy in part looks to a greater involvement in the Survey’s activities of groups such as higher education institutes and other Council institutes, seeing in this a means of broadening the intellectual base of Antarctic research. 1 THE BRITISH ANTARCTIC SURVEY: MANAGEMENT OF MA,OR CAPITAL PROIECTS AND SCIENTIFIC PROGRAMMES 6 Against this background the National Audit Office examined: (a) how the Survey planned and managed the four capital projects listed above: and (b) the approach of the Survey and the Council to the management, control and evaluation of the Survey’s scientific programme. The National Audit Office’s main findings and conclusion are set out below. The Survey’s 7 The management of the four projects represented a formidable challenge, management of their particularly to a small organisation like the Survey. The Antarctic four major capital environment presents difficulties of an unusual nature, as do the limited projects access to Antarctica and the fact that construction work is entirely restricted to the short Austral Summer. The Survey rose well to this challenge in that, from the three projects so far completed, they have succeeded in obtaining virtually all the facilities that they had set out to obtain. This outcome owes much to the drive, determination, effort and enthusiasm of those concerned. However, all four projects have exceeded, or are projected to exceed, their planned cost budgets. And two of the projects-Halley and the Dash 7 -have exceeded their timetables (paragraph 2.1 and Table 1). 8 The National Audit Office concluded that, overall, the Survey had achieved reasonably good value for money on each of the projects. However, they also considered that, in managing the projects, the Survey had taken some courses of procurement action which did not fully comply with best practice and which, although they had turned out largely successful, involved a degree of risk which might, if the Survey had been less fortunate, have proved more costly and problem-ridden. 9 Project management of the RRS James Clark Ross project was exercised jointly by the Council and the Survey, under formally documented agreements, with the Council taking a leading role. In the case of the other three projects, however, the Council delegated full responsibility for project management to the Survey under arrangements which were not formally documented: instead, they were put in place by means of unwritten understandings. The National Audit Office concluded that letters of delegation should have been drawn up, clearly setting out the relationship between the parties. The Council intend that financial and management delegationsshould be clearly specifiedin writing for future projects (paragraphs 2.8-2.9). 10 Best practice had been followed in appointing project officers to manage and control the projects. But the Council and the Survey now recognise that the resources devoted to project management were insufficient. As a result, project officers-this is noted without prejudice to their efforts, abilities or achievements-had neither enough time nor supporting staff. Consequently, some aspects of project management were performed less than adequately. For future projects the Council plan to satisfy themselves as to the capacity of the organisation concerned to discharge the necessary functions (paragraph 2.12). II While three out of the four project officers possessed technical expertise and had substantial experience of managing smaller value projects, the project officer for the RRS James Clark Ross lacked knowledge of ship construction 2 THE BRITISH ANTARCTIC SURVEY: MANAGEMENT OF MAJOR CAPITAL PROJECTS AND SCIENTIFIC PROGRAMMES technologies and experience of larger-scale projects. His chief assistant was, however, a qualified naval architect and he himself had extensive administrative and contractual experience which was highly valued by the Council. The National Audit Office concluded that the Survey should have provided project managers with project training and support. It would, in the National Audit Office’s view, have been preferable to have appointed a Project Officer for the RRS James Clark Ross with specific knowledge and experience of ship construction and larger-scale projects (paragraph 2.13). 12 The Statements of Requirements for the four projects were generally satisfactory except that they did not contain criteria for “availability, reliability and maintainability”. In addition, the Statement of Requirement for the RRS James Clark Ross was still being prepared when the design contract for the project was let. The National Audit Office acknowledge that the Survey had given consideration to the general questions of risk and cost throughout the life of the projects, but concluded that not to specify clear “availability, reliability and maintainability” criteria and to place a design contract before requirements were specified increased the risk involved (paragraphs 2.15 and 2.18). 13 The projects were particularly risky because of the hostile Antarctic environment, the short Antarctic working season and problems of access. Environmental risks such as weather and sea-ice were severe and largely unpredictable. They could be assessed but not controlled. The Survey were well aware of these risks and took a range of important steps to avoid them. For example, they arranged for potential contractors to visit Rothera to gain an appreciation of the risks involved in such a remote location. They also carried out some pre-contract feasibility work but the amount of this was restricted by the funds that the Council were able to allocate. In addition, the Council did not undertake formal risk analyses for these projects, relying on other measures to guard against the uncertainties well known to them from their experience of Antarctic conditions. Had a formal risk analysis been undertaken, a decision to undertake a separate hydrographic survey for the Rothera jetty might have resulted. Without this, the jetty had to be redesigned and repositioned leading to unexpected costs of some f2 million-although these costs were contained within the contingency set before construction work commenced. The National Audit Office concluded that the Council and the Survey could have taken more action to control risk.
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