One of the objectives of EDA’s pooling and sharing initiative is to promote the adoption of effective procurement methods, through the development of practical and innovative ways of ensuring greater collaborative activity.
Member States could potentially make savings of between 20 to 50 per cent in military equipment and services by adopting shared procurement practices. A number of Member States have asked the agency to suggest a series of best practices in equipment procurement which could deliver substantial savings and, according to EDA’s Senior Officer for Defence Market Reinhard Marak, these are realistic savings.
In implementing a ‘user club’ for Leopard main battle tanks which includes common purchasing of spares, Germany – as the lead nation – demonstrated for 21 predefined items where full competition could be applied very rapid savings of €9 million, or 25 per cent. When Estonia wished to buy new radar systems, by collaborating with Finland it achieved a 50 per cent saving over the price originally quoted for solo procurement.
The biggest burden on equipment procurement rests with the development phase, so any capacity to short-cut the path to collaborative acquisition using off-the-shelf methods has to be worthy of serious consideration.
The agency has no plans to become a procurement agency but rather focuses on its capability to facilitate joint or harmonised acquisition of a wide range of products and services. It has a unique capability in that it can provide a full spectrum of commonality from concept development through to implementation. Furthermore EDA has a good understanding of market issues and has established a number of tools, such as the Collaborative Database (CODABA), the Third Party Logistic Support (TPLS) Platform and the Procurement Experts Network (PEN) that can be used to identify matches of demand.
EDA is the only body specifically mentioned within the EU Defence Procurement Directive as having a potential central purchasing role. With an estimated 20 to 30 per cent of European defence procurement cases potentially standing to benefit from harmonisation of requirements and collaborative procurement, this is an initiative whose time has most definitely come. “And the really good thing about this is that this is what industry wants too. As a contribution to both consolidation of demand and standardisation, this is an initiative that serves the Member States’ requirements for cost-effective procurement as well as the requirements of industry for greater efficiency,” said Marak.
Feedback from the Member States on early implementation of the initiative has been very encouraging. In a data collection exercise on pooling and sharing conducted by the EU Military Committee in late 2011, Member States identified procurement as their preferred option for pooling and sharing in a number of domains, including transport and logistic support – medical support and evacuation, helicopter availability, camp construction and supply, education and training – ranging from flight and pilot training through to chemical warfare and logistics support training, vehicles, ammunition, weapons and individual equipment – from light weapons, mines and explosives to rocket launchers and auxiliary field artillery equipment – and communications.
While not, perhaps, completely exhaustive, such a list is at least comprehensive and gives EDA wide scope to implement further measures to promote effective procurement methods. The challenge now is to translate common demand into common action and, in Marak’s words, “to use existing tools in a better way.” Experience as a former international legal officer for the Austrian Ministry of Defence, prior to coming to EDA in September 2008, provides him with a thorough background against which to measure the viability and effectiveness of such measures in the complex arena of multilateral procurement.
This article was first published in issue 1 of EDA’s magazine “European Defence Matters”.
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