Most equipment programmes aimed at modernising the German military (Bundeswehr) are affected by severe delays and cost overruns, a recent German MoD report shows. Published on 19 March, the report covers the so-called Top 15 of major procurement programmes that includes the new PUMA AIFV, TIGER and NH90 helicopters, and the A400M transport aircraft. Other topics include Eurofighter TYPHOON, its new AESA radar and IRIS-T and METEOR air-to-air missiles, with PAC-3 CRI missile enhancements to PATRIOT and a possible follow on ground based air defence (GBAD) system also being reviewed. In the naval domain, the new F125 frigate and the K130 corvette are scrutinised. The BOXER multi role armoured vehicle, new interservice secure networked software defined radios, and the EUROHAWK programme including possible alternatives are also covered. Altogether, the costs of these 15 programmes including cost overruns now amount to slightly over €58 billion, which is 70% of the financial volume needed to fund all ongoing procurement efforts by the Bundeswehr.
Building on an elaborate 1,500 page October 2014 report put together by independent accountants from KPMG, P3 Group and Taylor Wessing, the latest document is part of a comprehensive equipment roadmap that is aimed at enhancing the efficiency and transparency of the Bundeswehr’s procurement process. Coincidentally, the German MoD wants to increase the level of international cooperation, negate some of the military’s current capability gaps while also improving materiel readiness. A direct result of the latter has been the establishment of two task forces for aerial weapon systems, one for rotary wing assets and one for fixed wing aircraft. Another part of the roadmap has been the introduction by the previous defence minister de Maizière in late 2013 of a so-called equipment board that convenes on a regular basis and reports to secretary Suder, the deputy of current defence minister Ursula von der Leyen.
The March report appears to vindicate a number of experts who have long questioned the Bundeswehr’s lack of progress when it comes to procurement including its painstakingly slow process of establishing requirements. While the Bundeswehr envisaged it would cost 13 years on average to deal with the above mentioned 15 programmes, the report shows that development snags and certification issues have led to delays that saw these programmes on average being extended by more than four years. In general, costs were 29% higher than anticipated, this equating to an increase of €12.9 billion, 72% of which as a result of annual price hikes contractually agreed upon by the military and the defence industry.
The German NH90 programme has shown a massive 158 month delay with full operational capability (FOC) now expected to be reached in late 2016 instead of in 2003. The EUROFIGHTER and A400M programmes have respectively been hit by 136 month and 107 month delays. To some extent politically motivated, final deliveries of EUROFIGHTER are now planned for early 2018. Meanwhile, delays with regard to the TIGER attack helicopter programme are now described as being 110 months. However, due to the new framework agreement with Airbus Helicopters which will see production being reduced from 80 to 68 aircraft, this will eventually be reduced to 81 months. While progress with the BOXER programme has been above expectations, with final deliveries of the initial batch now planned for March 2016, the PUMA programme has been delayed by 53 months. Even worse, cost overruns are cited as being 103% , much more than with the EUROHAWK full scale demonstrator and its Airbus DS ISIS SIGINT suite (62% ) or EUROFIGHTER (39% ). To a large extent this is due to a reduction in the number of new AIFVs that are on order with 350 now being planned instead of the initial figure of 1,152 vehicles. In addition, concurrent development and production, and incremental changes to the vehicle’s set of requirements, for instance by adding the MELLS guided missile system, have led to an increase of €2.32 billion. Despite this, in absolute terms, EUROFIGHTER’s price hike is bigger than the cost overruns of all other 14 programmes together, this involving an increase of €6.77 billion.
Part of the equipment roadmap aimed at solving the materiel challenges the German MoD is confronted with, are a number of short term goals. These include an analysis of future key technologies that are deemed essential to maintain a technological edge, especially with regard to air power, and the implementation of an improved risk management scheme to better deal with complex, large scale equipment programmes. In 2015, the MoD will also have to decide on how to continue with the MKS 180 multirole combat ship. A decision on whether the Bundeswehr will continue with MEADS or with an Evolved PATRIOT system to fullfil its future tactical GBAD requirements is also expected soon.
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| The PUMA programme has been delayed by 53 months. (Photo: Bundeswehr) |
Building on an elaborate 1,500 page October 2014 report put together by independent accountants from KPMG, P3 Group and Taylor Wessing, the latest document is part of a comprehensive equipment roadmap that is aimed at enhancing the efficiency and transparency of the Bundeswehr’s procurement process. Coincidentally, the German MoD wants to increase the level of international cooperation, negate some of the military’s current capability gaps while also improving materiel readiness. A direct result of the latter has been the establishment of two task forces for aerial weapon systems, one for rotary wing assets and one for fixed wing aircraft. Another part of the roadmap has been the introduction by the previous defence minister de Maizière in late 2013 of a so-called equipment board that convenes on a regular basis and reports to secretary Suder, the deputy of current defence minister Ursula von der Leyen.
The March report appears to vindicate a number of experts who have long questioned the Bundeswehr’s lack of progress when it comes to procurement including its painstakingly slow process of establishing requirements. While the Bundeswehr envisaged it would cost 13 years on average to deal with the above mentioned 15 programmes, the report shows that development snags and certification issues have led to delays that saw these programmes on average being extended by more than four years. In general, costs were 29% higher than anticipated, this equating to an increase of €12.9 billion, 72% of which as a result of annual price hikes contractually agreed upon by the military and the defence industry.
The German NH90 programme has shown a massive 158 month delay with full operational capability (FOC) now expected to be reached in late 2016 instead of in 2003. The EUROFIGHTER and A400M programmes have respectively been hit by 136 month and 107 month delays. To some extent politically motivated, final deliveries of EUROFIGHTER are now planned for early 2018. Meanwhile, delays with regard to the TIGER attack helicopter programme are now described as being 110 months. However, due to the new framework agreement with Airbus Helicopters which will see production being reduced from 80 to 68 aircraft, this will eventually be reduced to 81 months. While progress with the BOXER programme has been above expectations, with final deliveries of the initial batch now planned for March 2016, the PUMA programme has been delayed by 53 months. Even worse, cost overruns are cited as being 103% , much more than with the EUROHAWK full scale demonstrator and its Airbus DS ISIS SIGINT suite (62% ) or EUROFIGHTER (39% ). To a large extent this is due to a reduction in the number of new AIFVs that are on order with 350 now being planned instead of the initial figure of 1,152 vehicles. In addition, concurrent development and production, and incremental changes to the vehicle’s set of requirements, for instance by adding the MELLS guided missile system, have led to an increase of €2.32 billion. Despite this, in absolute terms, EUROFIGHTER’s price hike is bigger than the cost overruns of all other 14 programmes together, this involving an increase of €6.77 billion.
Part of the equipment roadmap aimed at solving the materiel challenges the German MoD is confronted with, are a number of short term goals. These include an analysis of future key technologies that are deemed essential to maintain a technological edge, especially with regard to air power, and the implementation of an improved risk management scheme to better deal with complex, large scale equipment programmes. In 2015, the MoD will also have to decide on how to continue with the MKS 180 multirole combat ship. A decision on whether the Bundeswehr will continue with MEADS or with an Evolved PATRIOT system to fullfil its future tactical GBAD requirements is also expected soon.
Pieter Bastiaans