Industry could benefit from cross-border defense programs.

AuthorJovovic, Aleksandar D.
PositionViewpoint

A prescient Rand Corp. study some years ago warned of obstacles to joint cross-border procurement as numerous and complex, the product of parochial industry interests, domestic legacy systems and national doctrines.

Collaborative programs required agreement on requirements, costs and schedule, leaving little control to individual countries facing projects often fraught with risk and uncertainty. No wonder collaborative defense acquisition had remained fairly meager.

The year was 1978.

The historic parallels between 1978 and today should not be overlooked. The global economy was recovering from an energy price shock and economic problems, the legacy of Vietnam and defense-spending fatigue were settling in worldwide, just as the geopolitical certainties of the early Cold War were crumbling and Iran was on the verge of imploding. Recent years have witnessed joint defense procurement initiatives, extending beyond NATO to include countries such as India. However, growth in collaborative defense projects has remained modest, hampered by the same decades-old challenges.

Where cross-border collaboration exists, it tends to be exceptional rather than typical of a general trend, largely relegated to bilateral or consortia-based efforts rather than broad alliance or regional programs. The primary motivation for such agreements has almost always been cost efficiency, with an important nod to interoperability in the NATO context. And while their legacy has been mixed, the current defense spending contraction will likely breathe new life into this model ensuring it remains a niche opportunity for U.S. and European defense firms.

Nordic countries have pioneered some of these approaches, despite overlapping memberships in the EU and NATO. For some 15 years before it was subsumed into a broader regional defense program, their joint procurement arm NORDAC conceptualized and managed a host of development and procurement programs on a country a-la-carte approach. Such collaborative acquisition efforts can be a lifesaver for imperiled programs. Two members of NORDAC, Norway and Sweden, recently inked a $200 million deal to procure the BAE-supplied 155/52 light mobile artillery system, a program that had been conceptualized by Sweden's FMV defense procurement agency, but then languished because of budget constraints until Norway joined the fray.

Alarmed by the simultaneous downturn in U.S. and European defense budgets, NATO has recently announced a number of...

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