Will Europe ever get its defense procurement and research act together? The European Defence Agency (EDA), formed in Brussels last year to help create an open, competitive and transparent market, is a top-level initiative of the European Union, with a steering board comprised of 24 EU defense ministers. But, acknowledged EDA chief executive Nick Whitney: “There’s too much duplication.”
The agency is formally monitoring a new code of conduct agreed to by 22 of the 25 EU member states to open up their defense procurement to cross-border competition. The code took effect this month. Requirements worth more than ?1 million must now be posted on an online portal, and the states must use “objective selection criteria” to award their contracts.
Nonetheless, the code is voluntary, and skeptics doubt whether it will overcome decades of national protection of defense industries in Europe. Indeed, the EU’s Internal Market Commissioner is pressing for specific legislation to create a level playing field.
The UK has one of the most open and competitive regimes for defense procurement in Europe, and around 25 percent of its defense industrial base is foreign-owned. But still it spends only 5 percent of its defense budget on direct imports, and another 13 percent on cooperative programs such as Eurofighter.
Last December, the British government unveiled a new Defence Industrial Strategy (DIS) that explicitly defined what capabilities should be retained onshore in the national interest versus what could be sourced from abroad. This plan was welcomed by the industry, but the DIS was criticized by the Society of British Aerospace Companies and others for not paying enough attention to the European dimension.
The EDA has identified three priorities for procurement collaboration:
• Strategic airlift, including a new heavylift helicopter;
• Air-to-air refueling, where it might manage an ad-hoc initiative; and
• C3I, including satellite communications, and network-enabled capability.
Better Collaboration Needed
In addition to procurement, the EDA is also supposed to promote joint research and technology (R&T) in Europe. At present, only 10 percent of the ?2.5 billion that Europe spends each year on defense R&T is collaborative. The EDA has taken over the management of 40 collaborative R&T projects that were previously funded by other agencies, such as the Western European Union. In the aerospace field, those projects include work on dual-mode seekers and on space-based synthetic aperture radar.
After creating and consulting with a network of experts on European technology, the EDA has defined areas as ripe for more joint R&T, (see box below).
To date, though, the EDA has been given only ?5 million to spend on new R&T. Its budget for operating costs is more than three times that amount. It has recruited a staff of 90. The agency has issued only two small contracts, to date, both relating to unmanned air vehicles: a Finnish consortium is researching digital datalinks, and a consortium led by France’s Sagem is studying the sense-and-avoid techniques that UAVs will require to operate in civilian airspace.
Despite their expressions of earnest intent, the EU member states seem reluctant to give the EDA full control of a substantial new R&T fund. At the last meeting of the steering board, the defense ministers agreed to a new funding mechanism, whereby states can opt in or out of joint programs. The first of these will be force protection. Participating states must set aside money from their 2007 budgets to fund it, but nothing more was said about the EDA’s other priorities listed above.
This funding program may not satisfy Europe’s defense industrialists. At an R&T conference organized by the EDA last February, EADS co-chief executive Thomas Enders spoke as head of the Aerospace and Defence Industries Association of Europe saying that previous European initiatives in civil aerospace and space research have produced results, and he called for the EDA to be allocated an initial ?50 million. “Europe has to eventually rationalize its technological capabilities, avoid duplication and concentrate its resources,” he said.
“Let us not forget that the [U.S.] Defense Advanced Research Projects Agency [DARPA] has a $2 billion budget for upstream research. We need an EU-level defense science and technology board,” Enders added.