Nordic defence industries could get an encouraging leg-up after the ratification this month of an addendum, on joint procurement of military materiel, to the Nordic Defence Materiel Agreement (NDMA) signed on 10 March 2015 by Finland, Norway, Sweden and Denmark. Headed by NORDEFCO, the inter-state organisation which manages defence collaboration, this new addendum should facilitate joint procurement by the four nations.
“Changes during recent years have created an entirely new environment for the defence industries of our countries. National defence budgets have tended to decrease and competition has become more intense and international. Very few companies, if any, will be able to rely only on their domestic markets in the coming years,” Jussi Niinistö, Finland’s defence minister said in his opening speech at the Nordic Defence Industry Seminar on 10 May.
“The Nordic defense industry can be an important resource for cooperation. There is a range of expertise across different product sectors. Many Finnish and Nordic companies are global players in their niche areas,” said Niinistö. Which is why this new addendum to the NDMA will create a solid framework for joint procurement projects between the Nordic countries, starting by promoting legislative changes to offer better profitability, ensure on-time deliveries and raise the implementation levels of common projects.
Concretely, the procurement model suggested would involve three primary templates; an Actual Joint Tender, a Coordinated Tender and a Government-to-Government Joint Procurement Procedure. The result would lead to important economies of scale, simplified bureaucratic procedures and better business opportunities for Nordic industries.
Eventually, this new addendum would enable practical advice to be given to partner nations who want to jointly procure some equipment and would harmonise the laws of each state “taking into account their respective norms, regulations and national policies,” NORDEFCO said.
Far from being limited to joint procurement, the NDMA aims to cover a wider range of issues, such as R&D, developing new capacities, securing supplies and getting rid of obsolete equipment. NORDEFCO is already working on a broad portfolio of joint industrial projects that range from the protection of the individual soldier to the management of operational bases, via munitions and tactical data networks.