Effektive materiellanskaffelser i Forsvaret - økonomiske gevinster ved økte hyllevareanskaffelser

The Norwegian Armed Forces spend 8–9 billion NOK, about 22 per cent of their annual budget, on procurements. An effective procurement process is key for increased efficiency as well as achieving combat capability. This report aims at improving the decisions made in the procurement process in the Armed Forces when faced with the choice of procuring off the self-products, modified off the shelf-products or development products. Off the shelf-procurements are assumed to have lower production costs through economies of scale, as well as lower technological risk. This comes at the cost of not being able to require other specifications than the ones already met by existing products. We have developed a set of definitions that allows us to classify projects in the three categories, and calculate each category’s share of the Armed Forces’ acquisition portfolio. Using this categorisation we estimate the amount that could be shifted towards more off the shelfproducts, and the economic gain associated with such a change. We don’t have sufficient data to analyse the effect such a change might have on operations and maintenance. Our analysis is based on a number of different data sources: economic theory, a classification of the investment portfolio, project characteristics, a reference group, in-depth interviews, an analysis of decision documents and co-operation with the Swedish Defence Research Agency (FOI). Our main findings are based on a combination of these methods: 1. Off the shelf-projects are most common measured in the number of projects; development projects are most common measured in expected payments. 2. The Armed Forces procure more off the shelf-projects than the Swedish Armed Forces. 3. We find no support for the claim that off the shelf-products are low-cost with a short life span. 4. Special requirements and compatibility with existing material (heritage) are the most common reasons for procuring modified off the shelf or development products. 5. There’s room for procuring more off the shelf-products. An increase equal to the goal set by the Norwegian Ministry of Defence (MoD) will yield a gain of at least 150 million NOK a year. We have identified several recommendations towards our aim of improving the decisions in the procurement process. They take into account the Armed Forces’ demanding economic situation. Most importantly, the ambition of increasing the amount of off the self-procurements must be followed by concrete goals. This might affect other policy choices (defence industry and international co-operation in development projects). The long term planning process must be the starting point for all priorities, and the MoD must issue clear guidelines to the Armed Forces and Norwegian Defence Materiel Agency (NDMA). Increasing the share of off the shelfprocurements will have an adverse effect the Armed Forces freedom in making the requirement specifications, highlighting the trade-off between economic gains and requirement specifications. An iterative specification process is therefore a necessity. Lastly, NDMA must be given the necessary authority to ensure that the requirements are in line with MoDs priorities. This means that NDMA must have sufficient military and civilian competence.