When Richard's up and about no doubt he'll be blogging over at Defence of the Realm on the FOI revelation in the Times today that feasibility work on the new FRES vehicle for the army has cost over £200m. Whilst not able to offer an expert opinion on this, I can share what we'd expect in the construction industry.
A design consortium in this day and age may get a fee of 9% of construction cost for an innovative and complex building. On top of this may have been feasibility work - Stage A & B in RIBA terms - which is usually time charged, but will be unlikely to exceed 2% of construction cost unless poorly managed.
The MOD's budget for buying the new set of vehicles is £2bn. Feasibility costs are therefore already at 10% even before detailed production design has begun. If this were a construction job, it would be time to change the team. The actual vehicle is not expected to enter service until 2013 / 2014, and a MOD spokesman said 'Considering the overall size of the programme and its importance in equipping our Armed Forces this is not an excessive assessment-phase spend.'
Perhaps the MOD needs some experienced construction managers to run its procurement programme.