Britain’s “Anti-US” Procurement Policies – and the Future Dynamics of Global Procurement
Political efforts are underway to integrate the European defense industry. As one might expect, these efforts are most politically controversial in Britain, which has substantial defense industry ties to the USA as well.
A recent article in The Sunday Telegraph illustrates some of the political tensions and procurement issues that must inevitably accompany these efforts. It highlights broader trends that will accompany these integration efforts throughout Europe.
In an article entitled “You can’t spin away the wasted billions, Mr Ingram,” Christopher Booker accuses Adam Ingram, the British Minister for Armed Forces, of wasting billions of pounds in a surreptitious efforts to integrate Britain’s armed forces with those of the European Union via acquisition policies that discriminate against British and American alternatives:
“Mr Ingram claimed that any company, US, British or European, is free to bid for the Ministry of Defence’s equipment contracts, and that “ultimately, contractors are chosen on the basis of value for money for the UK taxpayer”. This is blatantly contradicted by several of the contracts I have reported, where superior US or British equipment has been rejected in favour of contractors from other EU countries.
Even Mr Ingram’s claim that MoD contracts are “open” is highly disingenuous, as in the case of the MoD’s award of a [GBP] 166 million contract to buy 401 obsolescent Panther reconnaissance vehicles made by the Italian firm Iveco. After several bids had been offered for cheaper and better vehicles, the MoD itself insisted that an additional bid should be made on behalf of the Italian vehicles, which it then accepted, even though their cost, at [GBP] 413,000 each, was four times that of the equivalent US Humvees.
Mr Ingram might also consider the remarkable story of the French-made Storm Shadow cruise missile, designed for use in the Eurofighter. Nine hundred of these have been bought at a cost which, the MoD admited (but only after persistent questioning) was [GBP] 981 million, making it the “million pound bomb”. Had the MoD wished to get value for money, it could have waited to buy the much lighter and longer-range US JASSM missile, on sale at only [GBP] 167,000 each. This alone would have saved UK taxpayers [GBP] 830 million – a further sum to be added to the [GBP] 5 billion identified by Dr Richard North as having been wasted by the MoD’s preference, wherever possible, for equipment supplied by our EU partners.
Mr Ingram was equally disingenuous in his effort to downplay the unpublicised treaty signed in 2000 by Geoff Hoon, committing Britain to a common defence procurement policy with five other EU countries as part of establishing a fully-integrated “European Defence Identity”. It is this policy which is now being co-ordinated (as the treaty proposed) by the new European Defence Agency, set up last January in Brussels under Nick Witney, a former MoD senior civil servant.
What makes all this so scandalous is not just that it is wasting billions of pounds, but that it commits our Armed Forces to a highly uncertain future, progressively ruling out the “special relationship” and any future military collaboration with the US. Even worse is that ministers have sought to sneak through this radical realignment in Britain’s defence policy without ever honestly explaining it to Parliament or to the British people – as the weasel wording of Mr. Ingram’s letter sadly bore out.”
A few notes of analysis from DID.
DID has covered Nick Witney’s efforts toward European defense integration in some detail, and explained how the EDA’s agenda dovetails (or doesn’t) with other European procurement and industry integration efforts currently underway. Interested readers are invited to check it out.
Mr. Booker’s points re: the MBDA Storm Shadow vs. Lockheed JASSM missile debate largely speak for themselves. One consideration absent from this analysis, however, is the decision role played by related defense projects – in this case, the Eurofighter Typhoon and its export prospects. As potential enemy air defenses have become more sophisticated, a short-medium range, precision-strike cruise missile becomes an important platform component for a multi-role aircraft. Relying on Lockheed for timely integration may have been considered a risk – especially if the platform one is investing in is likely to compete with Lockheed’s own F-35 Joint Strike Fighter and F-16 for export orders.
The Eurofighter’s mediocre export performance has rendered this issue somewhat moot, and other methods for addressing this risk did and do exist. As such, the decision may remain a poor decision and a negative case study example; nevertheless, good analysis should at least acknowledge this dimension to military procurement decisions.
Mr. Booker has less of a point re: the Panther contract. While we cannot comment on all the alternatives presented during the UK contract deliberations, the flat-bottomed HMMWV‘s lack of protection against roadside bombs and mines is a major weakness that the Panther vehicle addresses much more successfully. Even the USA is increasingly fielding vehicles like Buffalo and Cougar trucks and M117 Guardian ASVs, all of which are several times more expensive than up-armored HMMWVs; and it is doing so for similar reasons. The USA has also accelerated the timetable for a HMMWV replacement vehicle that will be more survivable against such threats.
Finally, Mr. Booker mentions Dr. Richard North. The GBP 5 billion figure comes from a paper entitled “The Wrong Side of the Hill – The ‘Secret’ Realignment of UK Defence Policy” [PDF format]. it is the best single source for those interested in his arguments, covering a wide range of programs and containing numerous details and caveats not found in his other articles. Other recent defense-related articles by Dr. North have included Integration by Stealth? and also The end of independence: The implications of the “Future Rapid Effects System” for an independent UK defence policy. His articles are worth a read as examples and input, though DID does not thereby endorse all of their assertions or conclusions.
While one may agree or disagree with his theses, Dr. North does touch on a very fundamental point embedded in these procurement politics – which is integration with command and control systems. Note how Britain’s new truck supplier MAN Nutzfahrzeuge AG also produces a sophisticated electronic fleet management system called Telematics, which has been incorporated into Britain’s “Network Centric Logistics”.
Meanwhile, there’s little question that weapons procurement and platform decisions have again become political alliance decisions. Greece’s recent cancellation of its $6 billion Eurofighter deal and purchase of more F-16s once its Socialist government was thrown out is an illustrative example.
What has changed are the key long-term levers, which are no longer tied to the same superpower-driven survival issues and foreign aid blandishments that existed until the 1990s. The concept of software locking in hardware choices over the long term has been present for a while in the corporate I.T. world. The very concept of “Network-Centric Warfare” ensures that similar dynamics will be playing a growing role in procurement decisions for digitized militaries as well.
In Britain, and beyond.
While one may agree or disagree with the specific examples presented, therefore, defense firms and policy makers would be well advised to assign an appropriate priority to network-centric “platform decisions” made around the world – and adapt both their strategies and their development plans accordingly.
- Thanks to Dr. Richard North for emailing DID a copy of his detailed paper: “The Wrong Side of the Hill – The ‘Secret’ Realignment of UK Defence Policy” [PDF format]. DID agrees that it is the best single source for those interested in his arguments, and contains numerous details and caveats not found in his other articles.
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