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International Collaboration

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The aim of international collaboration in equipment procurement is to share risks and costs. In the longer term, it is also advantageous to have common systems during exercises and operations. These are the driving forces when FMV seeks partner nations for the development and procurement of materiel.

The Excalibur artillery shell and the IRIS-T air-to-air missile are examples of collaboration with other nations where this aim has been achieved. However, anyone who has been involved in projects that cross national and cultural boundaries will know that things are more difficult when there are more parties involved. Nevertheless, the advantages outweigh the disadvantages, says Anders Carell, Head of FMV’s Land Equipment Department.

 - International collaboration certainly means that there is a risk of friction and delays, but ultimately there is more to gain from cooperation than there is to lose.

In 2013 two of FMV’s international projects ran into problems. One was the Archer artillery system, the other involved the procurement of heavy trucks – both are joint projects with Norway.

The Archer development project, like many complex projects at the leading edge of technology, has suffered delays. However, FMV was still able to handover the first systems to the Swedish Armed Forces in the autumn of 2013. Shortly afterwards the Norwegian Ministry of Defence announced that they wished to withdraw from the project.

With the disappearance of the 24 Norwegian systems from the order, there is a risk that the long-term costs will increase for the Swedish Armed Forces. At present, during the spring of 2014, FMV is negotiating with representatives from Norway with the aim of finding a solution that is acceptable to all parties involved.

Best capability for the best price

The procurement of heavy trucks will give the Norwegian and Swedish Armed Forces trucks with the best capability for the best price. When both countries buy the same vehicle, there are economies of scale effects on the price, and it allows for cost-effective operation because many of the maintenance functions are shared.

The tender process was almost complete when one of the potential suppliers, who was not awarded the contract, appealed; shortly afterwards the appeal was withdrawn. However, the outcome was that the Swedish Competition Authority is now investigating whether or not it was correct to allow the tender process to be conducted in accordance with Norwegian regulations.

Anders Carell- In this case it was our judgement that there were strong defence and security policy grounds, within the framework of our cooperation with Norway, to conduct the tender process jointly with Norway. We believe that this gives us exemption from the Public Procurement Act and allows us to apply Norwegian regulations, says Anders Carell, but we will see what the Competition Authority says. In the worst case we will have to repeat the tender process.

In joint procurement projects with other nations, it has long been international practice that one country takes the role of lead-nation. The tender process is then conducted in accordance with the rules and regulations of the country that has commercial responsibility for the process. It is assumed that this country will conduct the tender process in the best possible manner, in accordance with its own rules and regulations.

The rules are not crystal clear. Anders Carell is calling for clearer rules about what applies when two or more nations collaborate on joint procurement projects.

- We would welcome increased clarity, because joint development and procurement projects are essential at a time of shrinking defence budgets and increasingly costly new systems.

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Published: 2014-06-03 09:06. Changed: 2014-06-03 14:03. Responsible: Show e-mail address.