People & Skills
German arms procurement – better project management skills needed

German military arms procurement is in need of a serious overhaul, according to a recent review carried out by a consortium which included experts from management consultancy KPMG, engineering firm P3 and law firm TaylorWessing. According to the Financial Times, they identified “140 problems and risks” across nine major arms projects, including overworked officials, imprecise contracts and confused responsibilities.

The consortium said that large recent defence projects have experienced long delays and overrun costs, and that the government has been unable to enforce deadlines, cost and capability goals. The review recommended defence ministry procurement officers make changes to policy and procedure, but that similar changes must also be made within defence companies.

Defense News quotes from a summary of the review: “An optimisation of the arms management in national and international major projects is necessary urgently and without delay.” Defence Minister Ursula von der Leyen, who commissioned the analysis in June, says that making such changes could take years.

In addition to general recommendations to improve defence procurement, the review also made specific recommendations for nine major arms projects. They advised that the defence ministry claim compensation for an Airbus A400M transport aircraft because it was not delivered in the originally agreed model. The A400M deal has also drawn public attention because of a five-year delivery delay. An in-depth examination of the contractual position and scope of services was also recommended for a Puma future infantry fighting vehicle.

The review only adds to pressure on Germany’s defence ministry, which has drawn criticism after a number of recent embarrassing technical problems with military equipment. Defects have grounded several military transport planes in the past few weeks. Meanwhile a report commissioned by German MPs released last month showed that a lack of spare parts means that only 24 of 43 Transall C-160 transport planes are operational. Only 41 of 190 helicopters, 42 of 109 Eurofighter fighters and 280 of 406 Marder fighting vehicles are fit for service as well. Because of the shortages, Germany cannot currently carry out all of its NATO commitments. It was due to take aid to African states hit by Ebola, when the plane broke down.

In response to the October 6 review, the defence ministry has published six points that will outline an agenda to improve project management and transparency. A strategic goal of the agenda is to ‘establish a clear armaments policy. Defense projects must be based on high-level political priorities such as transparency, preserving key technologies and strengthening multinational cooperation.’ Defense News also states that greater parliamentary involvement will apply to contract and supplier management. This will involve several procurement projects being highlighted in parliament for consultation.

The report findings will need swift action if the Minister for Defence is to stand by the commitment to encourage more German involvement in international crises. Recommendations that defence buying needs better leadership and responsibility, tighter cooperation with industry alongside precise contracts with clear incentives and penalties, are the mainstay of solid procurement processes. And identifying possible risks earlier in the procurement process will call for better programme management and the skills to wield that weapon of choice!