EDF: opening new ‘windows’ for defence support

The EDF will not be a stand-alone instrument, however. Although it is chiefly bound to improve the competitiveness of the European defence industry, it will need to resonate closely with all the other European defence related prioritisation tools and initiatives set up in the aftermath of the Union’s 2016 Global Strategy, especially the EU’s revised Capability Development Plan (CDP) which delivered the 11 EU Capability Development Priorities, the Overarching Strategic Research Agenda (OSRA), the Coordinated Annual Review of Defence (CARD) which is tracking the Member States’ defence plans, research goals, budgets and other aspects related to defence capability development, as well as PESCO, the Permanent Structured Cooperation in defence. The EDF will complement all these tools insofar it is meant to (co-)finance collaborative defence capability development and research projects.

Yet some question marks remain. Whereas the CDP, OSRA, CARD and PESCO are up and running, the EDF still awaits final approval of its implementing regulation (proposed by the Commission in June 2018) by the EU’s two legislative branches, the Council and the European Parliament. Directly linked to this is also the crucial question whether its proposed budget of EUR 13 billion will emerge intact, as the European Parliament, Commission and Council are entering difficult budgetary talks over the Union’s next 2021-2027 multiannual financial framework. Finally, it is not clear yet how the Commission exactly plans to administer the EDF, including how it will delegate functions to other stakeholders. Meanwhile, preparations for the fully-fledged EDF are well on track on both dimensions: defence research and capability development.
 

Testing EU-financed defence research

The EU’s first real excursion into self-funded defence R&T began with a Pilot Project (2015-2018) followed by the Preparatory Action for Defence Research (PADR) in 2017 which was granted a budget of EUR 90 million over three years to test the political and technical feasibility of using – for the first time – EU money to support defence research.

As this was uncharted territory for the Commission, it turned to the European Defence Agency to run and manage PADR’s annual calls for proposals and proposal evaluations and to oversee the granted projects up to their conclusions. This was arranged by having the Commission delegate these responsibilities to the Agency through a delegation agreement signed in March 2017 which required some new management and budgetary techniques within the European Defence Agency (EDA) to fit with the Commission’s rules and procedures, according to Jean-François Ripoche, EDA’s Director for Research, Technology and Innovation.

“We extracted some lessons learnt. The grant-agreement process for the 2017 and 2018 calls took more time than expected, for example, while it was needed to adapt to the way the Commission deals with classified information and security-cleared facilities. We tried to provide input to avoid the risk of over-classification yet we are all getting there in the end,” said Mr Ripoche.

Currently the Agency is evaluating PADR’s third and final annual calls whose projects will have an average lifespan of two-to-three years, meaning until 2023. One of the topics – disruptive technologies – has attracted a lot of interest. “Whereas we had a maximum of around 10 proposals for the previous two calls, this one saw around 30 coming from industry and other players,” said Mr Ripoche. “It’s a hot topic.”

In the meantime, PADR’s other projects are starting to deliver results. For example, in March 2018 the first major PADR research project known as OCEAN2020 was launched. With a EUR 35.5 million budget and a consortium of 42 partners from industry, academia and the military (with the support and assets coming from the navies of 10 EU nations) the project is testing the integration of above-water, surface and underwater unmanned vehicles with manned platforms to boost maritime situational awareness. OCEAN2020 gave its first live demonstration in the Mediterranean Sea on 20/21 November 2019, and another demonstration will follow in the Baltic Sea in summer 2020.

Joint capability development

EDA is also involved in the EDF’s other preliminary programme known as the European Defence Industrial Development Programme (EDIDP), designed to support competitiveness and innovation across Europe’s defence sector. A two-year initiative (2019-2020) with a EUR 500 million budget, EDIDP supports joint development of defence equipment and technology in a wide range of cutting-edge defence technology domains including drone technology, satellite communication, early warning systems, artificial intelligence, cyber-defence or maritime surveillance.

In March 2019, the Commission published nine calls for proposals for 2019, with 12 further calls expected to follow in 2020. These calls cover priority areas in all domains – air, land, sea, cyber and space.

“EDA has an observer position vis-à-vis the EDIDP where our role is to provide views and expertise based on the agreed EU capability development priorities and the implementing Strategic Context Cases to ensure that the EDIDP’s funding goes towards filling the identified capability gaps and the provision of more coherence of the European capability landscape. In addition, upon request by Member States, EDA can provide support in its upstream role and conduct an assessment of the expected impact of specific projects,” said Franck Desit, the Deputy Director of EDA’s Capability, Armament and Planning Department. “The CDP and the EU Capability Priorities, after all, are the compass for EU-level defence initiatives.”

The bigger picture 

As previously mentioned, PADR and the EDIDP are two sides of the same coin in that, together, they represent the test-bed for the future European Defence Fund. What exact role the Agency will have vis-à-vis the EDF remains to be determined. 

On the research side of the equation, Mr Ripoche reckons there will not be a global delegation agreement similar to the PADR arrangement EDA signed with the Commission in 2017. “While we are ready and willing to provide support and avoid structure duplication, taking on responsibility for EUR 500 million worth just for the research dimension each year would probably be a huge scaleup for the Agency. But, clearly, there could be a project manager role for us, and that on various EDF research themes,” he said.

More important will be the Agency’s potential advisory role, both related to defence research and capability development. “Hopefully, we will capitalise on one of EDA’s traditional strengths: providing expert-driven upstream advice to Member States and making sure the funding goes to projects which are in line with the agreed European capability development priorities and thus really contribute to significantly impacting the coherence of the European capability landscape,” observed Mr Desit. EDA’s expertise will therefore be a key asset. “One lesson we’ve learnt from the Preparatory Action is that the better-structured projects are those where the requirements are tailored to Members States’ needs and benefits and the selection of proposals is based on the quality and expertise while looking for cross-border cooperation. Given its scale, that will be a challenge for the EDF,” added Mr Ripoche.

Another challenge will be to bring in a sufficient number of smaller companies and also to get the expected outcome from the projects. “We think the EDF’s rules of participation – and the money that will be available for them – will compel project leaders to reach across borders and find small and unconventional players. We’ve helped them to do that with the PADR projects, and this kind of things will grow in importance as the EDF gets underway,” said Mr Ripoche. “Above all, for successful implementation in defence you have to follow very closely the work of a given consortium, which is where EDA has long experience. You can’t just ‘fire-and-forget’ the project once a contract is signed”.

Bringing it all together

Whether it’s for research or capability development, however, a successful EU-funded defence project ultimately depends on the quality of its proposal and, just as important, the quality of its consortium – and there EDA has a couple of aces up its sleeve.

One is the Agency’s nascent tool, the so-called collaborative ‘marketplace’ whose aim is to provide Member States with a flexible, structured and transparent framework for sharing, on a voluntary basis, their ideas about potential projects in the context of EDIDP and the future EDF, and to look for mutual interests. Concretely, the marketplace intents to stimulate cooperative projects to meet Member States’ needs addressing the 2018 EU Capability Development Priorities, through clarification of projects’ content and building common understanding of Member States’ interest in the different proposals. It also aims at further developing the complementarity and synergies between CARD, PESCO and the EDF, based on the EU Capability Development Priorities and OSRA. Launched in 2019, the marketplace is implemented through a test phase approach focused on the second year of EDIDP and the first year of EDF. It will remain informal in nature with an objective to ensure transparency and sharing of information, not causing any distortion of competition.

“Basically, with the marketplace, Member States have the possibility to freely and informally exchange views on their projects and look for feedback from other Member States as well as EDA’s view on the project against the background of the European capability landscape.” explained Mr Desit.

EDA’s other ace is its long-standing “CapTech” community, a network of some 2500 technical experts linked to the EDA’s constituent ministries of defence. Currently divided into 12 different CapTech groups, each brings together Ministry officials and representatives from industry and academia to define the best kind of projects worth pursuing. Meeting three or four times a year, the groups rely on some 140 technology building blocks to guide their work, all of which links technological domains to the priorities of the Capability Development Plan.

Noting that the CapTechs teams have been around for years, Mr Ripoche said “this sort of thing is not built up quickly, but it is crucial because you ensure that way coherence between national and EU level. And when a Member State wants to involve its industry or academia in defence R&T to a larger scale, we always tell them: join the CapTechs! They are the first upstream point of contact.”