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Study: Pooling and Sharing - Costs of Non-Cooperation


Belgium, 14 April 2016

 

In early 2011, as Pooling and Sharing (P&S) was gaining high visibility as a means to mitigate the negative impact of the financial crisis. Some academics and pundits were pointing out the limited evidence as to the level of savings that can be achieved. In fact, the general perception was that multinational armament cooperation entailed additional costs and delays whilst there was still no existing business case to demonstrate the financial benefits of P&S. A study was then launched by EDA (11.CAP.OP.165) to reverse the demonstration by assessing the cost of non-cooperation, with the following tasks:

  • Extracting from the existing academic/government literature the elements supporting the case of a “cost of non-cooperation” and the most efficient cooperative models;

  • Developing comprehensive cost benefit analyses in five specific areas highlighting the cost pMS currently bear by not cooperating: Future Satellite Communications; Infantry Fighting Vehicles (IFV); Basic logistic support to CSDP operations (provision of food/water/fuel); Frigates; Air to air refuelling.

  • Developing a generic mathematical assessment model to assess/predict the benefits and the probability of success of future P&S projects. 

In 2014, the Collaborative Database (CODABA) was revitalised. The CODABA is a tool to facilitate cooperation by increased transparency and information sharing in defence planning. Participating Member States of the EDA, Switzerland, Norway and Serbia contribute to the CODABA by sharing their defence plans and programmes. The CODABA is expected to contribute to the harmonisation in capability planning of pMS and through identification of collaborative opportunities: CODABA records are used for outlining when what capabilities are planned by what pMS to be developed in Europe in the future. This is an integral part of the Capability Development Plan (CDP), the main reference in providing an overview of capability development in the EU context. The CODABA currently contains about 6000 records on pMS (and Third States) plans, programmes and in-service capabilities. An analysis of its content revealed 162 areas of collaborative opportunities out of which in 120 cases two or more pMS or Third States indicated interest in cooperation. Several clusters were selected to develop argumentation in favour of cooperation to support pMS decision-making.

DESCRIPTION OF THE SUBJECT AND SCOPE OF THE CONTRACT

The 2 tasks to be executed in the frame of the present contract are the following:

Task 1: A follow-on study (to the one mentioned under 1.2.1) in shall update and expand the comparative analysis of the aggregated European defence model against a selection of other ones (US, China, Russia, Middle East), starting from the initial findings of the above mentioned study. The analysis shall both go deeper into the detailed comparison of outputs (inventories, operational capability) against inputs (budgets, structure, governance) and indicate trends by developing the comparison (at least for the macroscopic elements) over a period of time (5 to 10 years).

Task 2: The work shall focus on surveying the existing academic/government literature, analysing the costs and benefits of European collaboration highlighting the most effective models and most convincing case studies as well as identifying the lessons learnt. The study shall further support EDA proposals for collaborative options by providing empirical data and a methodology to support European collaboration. A financial (cost benefit) analysis shall be developed in support of a new series of potential business cases, corresponding to collaborative opportunities derived from the CODABA in which the economic element plays a predominant role:

  • Main Battle Tanks (MBT): both for short-term optimization and for a common European solution in the 2030 horizon;

  • Lightweight multirole helicopters;

  • Air Surveillance – MALE (Medium Altitude Long Endurance) and tactical/maritime Remotely Piloted Aerial Systems (RPAS) as well as manned surveillance aircraft);

  • Auxiliary/Logistic ships;

  • Jet Pilot Advanced Training.

While conducting the study the contractor will be granted access to related unclassified information in the CODABA as well as additional information on on-going EDA activities in the respective areas. This task includes gathering and exploiting additional information on pMS plans and programmes derived from open sources. Such open source information will have to be delivered in CODABA format to complement the information already recorded in the database.

The findings of the study shall inform pMS on where the greatest benefits/savings can be achieved. It shall also feed into the Pooling and Sharing endeavour through providing the case for economic (and operational) viability of Pooling and Sharing options, currently difficult to substantiate.

The conducted analysis shall contain operational conclusions and potential recommendations (for European action), focusing on possible cooperation effects (benefits and risks), e. g. industry approach to pooling demand, common procurement and the Pooling and Sharing concept, identification of cooperation risks (national technical specifications, life-cycle, procurement timelines, etc.) also considering pMS national (e.g. industrial) interest and provide information on solutions going beyond procurement of equipment. In this sense, the study shall also contribute to the development of further EDA proposals to pMS regarding the replication of the EATC (European Air Transport Command) model in other areas and the extension of barter mechanisms (such as ATARES).

 

Submission Deadline: 17 May 2016

Also view the ECN Procurement Notice (accessible by ECN Executive Members - Login to View)

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