Sector News
A Single European Defence Force – Likely Procurement Issues (if it ever happens!)

The current military challenges faced in Europe are the most serious for twenty years or more, with Russia flexing its muscles in Ukraine and the huge migrant crisis stretching military and civil resources alike in many countries. Asia is a more distant concern, but tensions in that region whether driven by North Korea or arguments between Japan and China over territory need watching too.

So in recent weeks, some observers have called for more military co-operation across Europe, and there has even been some renewed talk of an EU Defence Force. National budgets are under pressure with “austerity” in most countries, so the idea of sharing resources and looking for some economies of scale is very attractive at a superficial level anyway. This article in the Daily Telegraph suggested that there could also be some political trade-offs here.

” Angela Merkel will expect David Cameron to drop his opposition to an EU army in exchange for supporting Britain’s renegotiation, the Telegraph has been told. The German chancellor will ask Britain to stand aside as she promotes an ambitious blueprint to integrate continental Europe’s armed forces“.

There are many major issues around this topic generally, but we are most interested as you might expect in the questions that could arise around the procurement aspects of this idea. If we moved towards a pan-European / EU military force, that would presumably mean moving towards a co-ordinated approach to procurement too. But how might a EU wide or even just continental EU military procurement operation work? Is it feasible at all? Let’s consider the points, and look at the issues and barriers that would have to be overcome.

The first set of issues really are common to any attempt to achieve successful collaborative buying when there are different organisations with a strong interest in what is being bought. In some ways, even private sector organisations see these barriers when a large corporation tries to centralise buying, perhaps across different business units or countries.

There are many questions here: can you get enough alignment of specifications to make some sort of aggregation worthwhile? How do you get stakeholder buy-in if key people feel they are losing control of key resources? Can you make sure you capture the right data from around the collaborative network in order to approach the market properly?

Already, individual governments have struggled with public sector collaboration even on a much more restricted level; is it really feasible to think this could be done across so many countries? And would the UK for instance insist that the Ministry of Defence collaborated with other UK contracting authorities, at least for non-military categories, rather than working with other military organisations?

On the other hand, if there truly was a single defence force, then we might argue the procurement organisation would only be serving that one master. But if there were some shared operations and some capability that was still at national level, then there would also have to be smart decisions about exactly what procurement was done “centrally” and what might be left at national level.

But where the defence force might act on a European basis, how would the appropriate specifications be arrived at? Some countries currently favour the most advanced technology, seeing that as the way to gain military benefits. But others buy much more basic equipment. If all the participants are funding the new central force, would the countries who don’t buy leading edge equipment be happy to pay their share for the latest kit, which would be a lot more expensive than that they currently buy? There are real trade-offs between cost and military superiority. The specification issue would of course also flow through to the troops. Different countries have different equipment, so there would be issues of capability, competence and the training needed to establish a skilled workforce able to use the chosen equipment.

Another issue is the sheer likely size of the Procurement function. How would we stop it becoming a huge, over-blown bureaucracy? How would jobs be “shared” between countries, and what processes would be adopted; every country has slightly different procurement regulations, although the core EU directives are common. But work to develop common standards, processes and systems would be essential, followed by extensive training and re-training programmes.

This all sounds challenging already; tomorrow we will look at some of the issues that are more specific to the defence industry, including national capability and the “International Trade in Arms” regulations.