MAKING IT HAPPEN: HOW EDA HAS STEPPED UP IN SUPPORT OF UKRAINE

Breathless insiders said it was ‘make-or-break’ for EDA, an exaggeration for the EU’s well-established hub for defence collaboration. But as Ukrainian forces use up to 7,000 shells a day on the battlefield, the message was clear.

The Agency has already laid the basis for possible ammunition Framework Contracts orders in record time by launching and running a common call for tenders. Twenty-six countries signed EDA’s ‘Collaborative Procurement of Ammunition’ project arrangement from March onwards, with some Member States expected to move to sign contracts for ammunition orders as soon as the Framework Contracts will be in place.

Diplomat, banker, executive

The responsibility has fallen to a small team inside EDA who, unlike the EU vaccine procurement process of the COVID-19 pandemic, do not have hundreds of people to turn to. What’s more, defence is a sensitive issue and discretion is the norm. Ammunition stocks, supply chains, company production and strategic plans are well-kept secrets.

But arguably the hardest task, says EDA’s Corporate Services Deputy Director Gianluca Serra, has been the need for EDA staff members involved in the project to play the multiple roles of policy maker, negotiator, ammunition expert, lawyer, financial and business executive on an almost daily basis (see EDM page 38).

That is because the Agency’s team continues to move between discussions with different constituencies of stakeholders within the constellation of EU institutions and Member States involved. When drawing up a fast-track procedure, which under the existing rules allows for the ordinary tendering process to be simplified and contracts to be put into place at relatively short notice, multi-dimensional issues (involving policy, governance, market, law, fiscality, finance) are of consideration.

EDA is putting in place two filters to ensure that ammunition can actually be produced once orders are made, and then used in battle.

“In the procurement process, we require suppliers to provide certification of compatibility with the firing system and this, albeit indirectly, will contribute to making the EU artillery technological landscape more interoperable,” Serra says. “This is the added value brought by EDA.”

Johann Fischer, Head of EDA’s Land and Logistics Unit within the Capability, Armament and Planning (CAP) Directorate, explains that the ammunition must be at least compatible across four chosen platforms . These are self-propelled howitzers that European Member States have sent to Ukraine: France’s Caesar; Poland’s Krab; Germany’s Panzerhaubitze 2000; and Slovakia’s Zuzana.

“Once we collected the basic information, it was agreed to focus our procurement on these four artillery platforms,” Fischer says. “We also decided on the two different types of ammunition: the high explosive and the high-explosive extended range.”

“You might ask why we focus only on 155mm, or why only on certain platforms,” Fischer adds. “The answer is both what Ukraine needs and the sheer urgency, given that it will still take time for the ammunition to be manufactured and delivered after contracts are signed. In procurement terms, everything we are doing is running along very short timelines,” Fischer says.

Another step of the process is conformity. “The original equipment maker must give the wider industry the ability to produce its ammunition if it is to be considered in our market survey of available suppliers,” Fischer says.

Cultural leap

EDA had already been working since November 2022 on three areas for joint procurement: ammunition, soldier systems and chemical, biological, radiological and nuclear (CBRN) equipment, based on the work of the Joint Defence Task Force with Member States to identify their most critical shortfalls.

The focus for now, however, is on Ukraine’s most pressing needs.

In a way, says Serra, that is the strength of EDA’s procurement model, technically known as a Category B (Cat. B) programme arrangement. It is the à la carte character, its ability to react and be flexible within the existing legal framework and operational constraints. Compared to a fully-fledged international procurement agreement outside EDA’s umbrella, it is lighter and legally less onerous to construct. Member States can also opt in to EDA’s procurement at a later stage.

“And let’s not forget the incentive of VAT exemption, which the EU allows for when countries come together to do business and EDA’s added value is recognised by the Member States,” he says.

Both Serra and Fischer hope the collaborative procurement can prove its worth also by helping to create a competitive European marketplace.

“Joint procurement of off-the-shelf military equipment at EU level is way more complex than national procurement carried out by individual Ministries of Defence,” Serra explains. “It is more demanding both in terms of definition of technical specifications (demand side) and market constraints (supply side). Differently from national procurement, joint procurement can, in the long run, become a vector of harmonisation of technical requirements as well as EU market integration. Add to this the economies of scale and security of supply that no nation can achieve alone,” he adds.

Might that mean EDA emerges as a central purchasing body for military equipment for the EU? It is an open question. “We are certainly colonising a new territory and the lessons that will be learnt from this experience will provide valuable inputs to EU policy makers, primarily Member States, on whether and how to shape up an EU procurement agency for military equipment,” Serra says. “One thing is certain: joint procurement at pan-European level through an EU central purchasing body will require a huge cultural leap in all EU capitals.”