Bulk purchasing is cheaper

“Bulk purchasing is cheaper” is a well known adage in the consumer world and it’s something that the Atlantic Alliance is going to have to get accustomed to. The NATO Support and Procurement Agency (NSPA) has now made this type of purchasing a speciality, registering almost 50 major acquisitions in this manner in May and June 2016. The last to date: guided munitions worth €205M, thanks to a new procedure in which the NSPA acted as principal buyer on behalf of Belgium, the Czech Republic, Greece, the Netherlands, Norway, Portugal and Spain.

 

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The NSPA was born on 1 April 2015 when the North Atlantic Council chose to extend NATO’s capacities by giving it an “acquisition” role for multinational weapons systems and services. For the time being it is a pilot programme to test the efficiency of this new structure designed to enable Allied armies to pool their resources and save money by increasing the volume of their procurements.

 

Just like a government agency, such as France’s official bulletin of public markets (BOAMP, of which we write regularly), the NSPA mostly issues Requests for Proposal. Today, Wednesday 17 August 2016, there are no fewer than 62 Requests on offer, mostly concerning spare parts, electronic systems and logistical and telecommunication systems.

 

Au 17 août 2016, 62 appels d'offres étaient publiés sur le site de NSPA

On 17 August 2016 there were 62 Requests for Proposal on the NSPA website

 

But the NSPA goes beyond “traditional” Requests for Proposal by providing potential suppliers with advance information about business opportunities for which Requests for Proposal may be issued in the near future.

This allows interested parties plenty of time to work on their proposals. Thus, for example, Supply Opportunity n°15LMS022 announcing the possible procurement of some 200 4×4 light armoured vehicles (tactical), could evolve into a traditional Request.

 

The NSPA is thus an important actor for any defence industrialist but it should be noted that the former only supports procurement of materiel or services from a precise list. The munitions sector, for example, is one of the sectors in which countries can make substantial economies. The NSPA not only negotiates their procurement but also their end of life recycling.  Pooling stocks of outdated and excess munitions follows the same cost reduction logic. The NSPA, which follows these contracts to their conclusion, can in certain cases offer to compensate the cost of the operation by selling the recyclable materials.