Finland Receives Suila’s NH90 Program Lessons Report
It has been a long road for Finland’s NH90-TTH battlefield transport helicopter program. The 2001 Nordic Group contract was intended to replace Finland’s 4 Russian Mi-8 medium helicopters and 8 MD500 light utility helicopters with 20 NH90s that would begin delivery in 2004 and enter service from April 2005 – October 2008, allowing a reorganized helicopter battalion to stand up in 2010. The common procurement action was directly linked to the establishment of the European Union’s Nordic Battle Group (NBG), which also driving other defense buys in the region.
A EUR 343 million deal for 20 helicopters was signed on Oct 19/01. First flight did not take place until Sept 15/04, however, and assembly has been years behind schedule. By October 2007, only 3 helicopters had been assembled, and Finland’s Military Aviation Authority was still asking NH Industries for supplementary technical data before it could issue a type certification that would allow them to enter service. The whole issue came to a head on Oct 19/07, when Finnish Defense Minister Jyri Hakamies appointed former Finnair CEO Keijo Suila to lead a working group and assess the program, determine what went wrong, and recommend changes to future procurement processes. A settlement with NH Industries was reached on Dec 12/07, and now Suila has delivered his report…
Under the settlement, Finland will receive just under EUR 20 million in late penalties. Deliveries will take place on a revised schedule: 5 NH90-TTH helicopters in 2008, 4 in 2009, and the remaining 11 in 2010-2011. The 9 helicopters delivered in 2008-2009 will not be fully operational, however, and will be used for training and development of concepts of operations. They will be upgraded to full capability by Patria in Finland during 2010-2011.
Suila’s report was released to the Finnish public on March 4/08, and a summary was posted as part of a Ministry of Defence release. Key takeaways include a finding that both parties to the contract have been acting in good faith, that Finland received acceptable compensation of the delay in delivery, and that the choice of helicopter suits both Finalnd’s needs and interoperability requirements for deployments abroad.
With respect to areas for improvement, the Finnish Ministry of Defence release had an appropriate quote from the report: “The haste of the initial phase is usually a setback.” Risk assessment needs to be more fully developed, rules for communication need to be improved since this became a bottleneck at times, other areas of procurement policy also need to be streamlined, and more commonality in national aircraft certification processes needs to be developed in Europe.
The full Suila report will be available in English on March 18/08.