Introduction

i

DEFENSE SYSTEMS MANAGEMENT COLLEGE

A COMPARISON

OF

THE DEFENSE

ACQUISITION SYSTEMS

OF

FRANCE, UNITED KINGDOM,

GERMANY AND

THE UNITED STATES

Tony Kausal, Editor

Gertrud Humily

Trevor Taylor

Peter Roller

September 1999

PUBLISHED BY THE

DEFENSE SYSTEMS MANAGEMENT COLLEGE PRESS

FORT BELVOIR, VIRGINIA 22060-5565
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

ii

For additional information contact:

Defense Systems Management College Press

(Tel) 703.805.2248

(Fax) 703.805.2917

DSN 655-2248

ISBN 1-893833-01-1
President

Bundesakadamie für

 Wehrverwaltung und Wehrtechnik

ENDORSEMENT

Every year thousands of military and civilian members of our four International Defense

Educational Arrangement (IDEA) acquisition organizations attend courses and read articles and

books about acquisition techniques and issues. As part of our continuing education efforts, the

four IDEA schools commissioned the writing and publishing of this book to provide acquisition

students with an introduction to the acquisition systems of the IDEA nations.

As we enter the next millennium, our defense forces continue to need reliable and

effective weapon systems that are affordable in an environment of increasing operations and level

or declining defense budgets. Our coalition forces will often be called upon to respond to

incidents that threaten world peace and international security as part of the North Atlantic Treaty

Organization or the United Nations. One approach to solving defense affordability problems and

serving the need for interoperability of our forces in coalition warfare is the cooperative

development and production of weapon systems.

People working on international cooperative programs quickly discover that different

budget cycles, political issues, and cultural perspectives can exacerbate small problems and, in

some cases, create larger ones. This book provides insights that should help those working on

international armament issues and provide, in particular, a source of reference for those working

with their colleagues from France, Germany, the United Kingdom, and the United States. The

history and culture of each nation is reflected in its approach to armaments development. The

reader will find the overall background and the introduction to the acquisition organizations,

programs. The reader needs to keep in mind that this introduction to acquisition captures a point

in time in these four countries, where organizations, processes and personnel are always

changing.

An educated workforce will continue to be a critical factor in our successful cooperation.

The IDEA Board of Directors is pleased to provide another tool to contribute to the education of

the workforce.

Deputy Commandant

Centre des Hautes Etudes

 de l’ Armement

Commandant

Defense Systems

 Management College

Deputy Commandant

Royal Military College

 Of Science
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

iv

TABLE OF CONTENTS

ACKNOWLEDGMENTS ......................................................................................................... vii

INTRODUCTION ..................................................................................................................... ix

PART 1 – FRANCE

Chapter 1 History and Traditions ............................................................................... 1-3

Chapter 2 The Government of France ...................................................................... 1-11

Chapter 3 Defense .................................................................................................... 1-17

Chapter 4 DGA: Role and Organization .................................................................. 1-23

Chapter 5 Defense Acquisition ................................................................................. 1-29

Chapter 6 The Procurement System ......................................................................... 1-39

Chapter 7 Defense Acquisition Programs – Structure and Organization ................. 1-41

Chapter 8 Acquisition Program Management .......................................................... 1-43

Chapter 9 Tests Processing, Assessment and Experiments ...................................... 1-52

Chapter 10 Acquisition Education ............................................................................. 1-56

Chapter 11 French Legislation, Practice and Control Mechanisms

 Governing the Transfer of Conventional Armaments......................... 1-60

Chapter 12 Intellectual Property Rights ..................................................................... 1-63

Chapter 13 The Industrial Base .................................................................................. 1-68

Chapter 14 Future Trends ........................................................................................... 1-73

Chapter 15 Principles for a Renewed Transatlantic Cooperation .............................. 1-76

Further Readings .......................................................................................................... 1-78

Endnotes ....................................................................................................................... 1-79

Glossary ........................................................................................................................ 1-81

PART 2 – GERMANY

Chapter 1 The German Acquisition System ............................................................... 2-3

Chapter 2 The Government of Germany .................................................................... 2-5

Chapter 3 The Federal Ministry of Defense ............................................................. 2-10

Chapter 4 The Defense Acquisition System ............................................................. 2-15

Chapter 5 The Planning, Programing, Budgeting Systems ...................................... 2-19

Chapter 6 The Acquisition Management Process..................................................... 2-21
Introduction

v

Chapter 7 Defense Armaments Workforce ............................................................... 2-25

Chapter 8 The Procurement Process ........................................................................ 2-26

Chapter 9 Trials and Operational Suitability............................................................ 2-28

Chapter 10 Multinational Armaments and Armament Sales ...................................... 2-29

Chapter 11 The Defense Industrial Base .................................................................... 2-31

Chapter 12 Future of Defense Armaments ................................................................. 2-33

Further Readings .......................................................................................................... 2-34

Endnotes ....................................................................................................................... 2-35

Glossary ........................................................................................................................ 2-36

PART 3 – UNITED KINGDOM

Chapter 1 History and Traditions ............................................................................... 3-3

Chapter 2 The Military of The UK – Organisation .................................................... 3-7

Chapter 3 The Staffs ................................................................................................. 3-12

Chapter 4 Acquisition – Introduction ....................................................................... 3-22

Chapter 5 The New Acquisition Cycle – Key Features ............................................ 3-24

Chapter 6 The Approvals Process............................................................................. 3-29

Chapter 7 Smart Requirements................................................................................. 3-30

Chapter 8 The Integrated Project Team (IPT) .......................................................... 3-35

Chapter 9 The Role of Industry ................................................................................ 3-38

Chapter 10 Customer Supplier Relationship Between

 the Capability Manager and the IPT................................................... 3-40

Chapter 11 Incremental Acquisition ........................................................................... 3-42

Chapter 12 Support Management ............................................................................... 3-44

Chapter 13 Personnel.................................................................................................. 3-46

Chapter 14 British Defense Industry .......................................................................... 3-47

Chapter 15 Future Trends ........................................................................................... 3-50

Further Readings .......................................................................................................... 3-51

Endnotes ....................................................................................................................... 3-52

Glossary ........................................................................................................................ 3-53

PART 4 – THE UNITED STATES

Chapter 1 History and Traditions ............................................................................... 4-3

Chapter 2 Congressional Involvement in Acquisition ................................................ 4-9

Chapter 3 The Cabinet .............................................................................................. 4-13

Chapter 4 Department of Defense ............................................................................ 4-15
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

vi

Chapter 5 Defense Acquisition Structure ................................................................. 4-22

Chapter 6 Service Acquisition Organizaitons........................................................... 4-26

Chapter 7 The Defense Acquisition System ............................................................. 4-35

Chapter 8 Defense Acquisition and Technology Workforce .................................... 4-46

Chapter 9 Test and Evaluation of Weapon Systems ................................................. 4-49

Chapter 10 Cooperative Acquisition and Foreign Military Sales (FMS) ................... 4-54

Chapter 11 The Industrial Base .................................................................................. 4-59

Chapter 12 My Crystal Ball........................................................................................ 4-63

Further Readings .......................................................................................................... 4-66

Endnotes ....................................................................................................................... 4-67

Glossary ........................................................................................................................ 4-70

PART 5 – A COMPARISON OF THE ACQUISITION SYSTEMS

Chapter 1 A Comparison of the Acquisition Systems of France,

 Germany, the United Kingdom, and the United States ........................ 5-3

Chapter 2 The Impact of National Political Systems ............................................... 5-13

Chapter 3 Conclusion ............................................................................................... 5-15

Endnotes ....................................................................................................................... 5-18

APPENDIX

Appendix A Armed Forces of the Four Idea Nations ................................................ A-3

Appendix B List of Acquisition and Related Organizations ...................................... A-4

Appendix C DoD Depots/Government Owned, Government Operated (GOGOS)/

 Government Owned, Contractor Operated (GOCOS) ................... A-12

Bibliography ................................................................................................................ A-15
Introduction

vii

ACKNOWLEDGMENTS

to have a better understanding of our armament

culture.

Germany: I greatly appreciate all Federal Ministry of Defence and BWB members who contributed their advice and knowledge to the effort.

Again, many people contributed both thoughts

and provided reviews of each draft. Finally, a

special thanks to Hermann O. Pfrengle for his

time and efforts and overall contribution to the

book.

United Kingdom: Our contribution to the book

is a team effort and I want thank both Wg. Cdr.

Chris Hockley and Lt. Col. Chris Bristow for

the long hours and effort they put into preparing their chapter. This was all accomplished

while performing their normal duties.

United States: I am indebted to many people

who contributed their ideas and time to this

effort. A special thanks to Faye Dufer for her

tireless efforts correcting my grammar and computer errors, and providing the final editing of

my chapters. All the members of the DSMC

Executive Institute—Ed Hirsch, Tom Dolan,

Ron Register, Joann Langston, Frank Swofford

— who for over a year responded to my requests

for information and reviewed my drafts, I owe

a debt of gratitude. I also owe a debt of thanks

to Lt. Col. Bob Faulk, Chuck Cochrane, Major

Chuck Frizzelle, DPA, Lt. Col. Roberta

Tomisine and many other DSMC faculty who

helped provide insight into areas where they are

the real experts. Mr. Chuck Houston is also owed

special thanks for his efforts in structuring and

developing the Comparative Acquisition efforts

that have been an integral part of the IDEA

annual conference. His pioneering efforts are the

Out of the need to educate program managers

working in an international environment grew

the International Defense Education Arrangement (IDEA). In 1988, the Centre des Hautes

Etudes de l’Arement (CHEAR), the Federal

Academy of Defence Administration and Technology (BAKWVT), the Royal Military College

of Science (RMCS) and the Defense Systems

Management College formed IDEA to provide

a forum for international cooperative education.

The annual IDEA conference was born to provide a better understanding of other nations’

acquisition environment, structure and processes

and to share lessons learned from those involved

with international defense cooperation programs. This book is an outgrowth of the annual

IDEA conference. At the 10th annual conference

in Paris France the IDEA Board of Director’s

approved development of a book to compare the

Defense Acquisition Systems of the four nations.

The final product was delivered to the Board at

the 11th annual conference at the Defense System Management College, Fort Belvoir, 30 July

1999, and was given final approval by the Board

of Directors for publication.

This book is the work of several people from

four countries. Each of the authors received

extraordinary help from colleagues and friends

in developing the individual country chapters.

France: I would like to thank all my colleagues

at DGA and its environment who gracefully

helped me to put together the French chapter. I

really can’t name them all personally, as there

are many people who contributed their ideas and

time to this effort. We are hoping that this book

will make it easier to understand the French way

to organize our defense system and perhaps also,
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

viii

genesis of this book. On a personal note, my

wife Mellie spent hours at home reading my

esoteric material and providing me a civilian’s

perspective on our complicated acquisition

system. And finally, to an old friend, whose

editorial efforts are always a help in providing

insight into my writings — Bruce Robinson —

a special thanks.

Many of our colleagues have contributed their

insight into our approach to this book to make it

a useful document to the readers. The views

expressed in this book are those of the authors,

and do not necessarily reflect the opinions of all

those who supported this project.

June 1999

– PROJECT MANAGERS/AUTHORS –

Professor Tony Kausal

Air Force Chair, DSMC

Dr. Gertrud Humily

Executive Director International Education

DGA/DCI

Professor Trevor Taylor

Head of Department

Cranfield University, RMCS

Mr. Peter Roller

Ltd. Wiss Director

The Federal Academy of Defence

 Administration and Technology
Introduction

ix

INTRODUCTION

“It is clear to me that we will have to leverage the technology and

industrial base of all our nations to modernize the equipment of our

defense forces at an affordable cost and in the end obtain “best value

for the money.” — Dr. Paul Kaminsky,

Former Under Secretary of Defense

For Acquisition and Technology.

Armaments cooperation happens for a range of

reasons. Nations anticipate cost saving or desire

access to better technology and agree to the

development of a new weapon system. However,

having the will to cooperate does not mean managing an international armament cooperative

program is an easy task. National culture and

traditions complicate the job. Different time

zones, different currencies, and different fiscal

years add to the difficulty. Communicating

complex issues through the fog of language,

either verbally or in writing, offers a challenging problem for both the program manager and

the multinational team members.

Working effectively in the international environment requires knowledge of the people, organizations and cultures of each country. As its

primary purpose, this book looks at the major

political and military acquisition characteristics

of the four countries, and provides an overview

of their organizations and processes. A useful

starting point for understanding an organization

is to look at its organizational structure. An

organizational structure indicates where activities take place, how the management system

operates, and indicates where authority and

responsibility rest. The managerial system,

which includes the formalized policies and

Since the 1970s, cooperative armament projects

have offered the hope of leveraging national

resources. Atlantic Alliance members have

sought cooperation with their friends and allies.

“These (cooperative) programs help strengthen

the connective tissue, the military and industrial

relationships that bind our nations in a strong

security relationship. The political dimension of

armaments cooperation is becoming increasingly important in an uncertain international

security environment.1

”

This book is about the national armament systems of four nations. It provides an introduction to the political environment, the acquisition organizations, systems and processes of

France, Germany, the United Kingdom and the

United States. All four nations are NATO members. These countries for more than a quarter

century have been partners in cooperative

programs. Their concerted efforts have fielded

such systems as the North Atlantic Treaty

Organization (NATO) Airborne Warning and

Control Aircraft (AWACs), the Navy’s RIM-7M,

Sea Sparrow, and the AV8B Harrier GR7. Their

cooperation in armaments activities has enhanced the mutual security of the alliance and

become even more important with the increased

emphasis on coalition warfare.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

x

procedures, guides the activities of the

acquisition organizations and provides an

understanding of how the system operates.

This book was written for several audiences. For

the acquisition practitioners, this introduction

should provide a basic understanding of the other

countries’ system and their approach to armaments development. This basic understanding

will help him or her to more effectively and

efficiently perform their assignment in the

international environment.

There are several secondary purposes. Every

year the United States assigns large numbers of

military personnel overseas to Security Assistance Organizations (SAO). These “SAOs” perform a key role in the interface between the

military of our government and the host country. One of their many tasks is to work with the

other country’s acquisition system. This book

will be a “good read” for them as they attempt

to understand and work with these organizations.

It will also provide them an introduction to the

United States acquisition system.

For students of comparative politics, governments,

and public administration, this book provides a

structured approach to understanding organizations and finding approaches to manage the

acquisition and development of weapons systems.

“Change has few friends” goes the old saying.

While change has few friends, the political,

bureaucratic system seems to find change

irresistible. Change is a constant feature of the

acquisition systems of these countries. New

initiatives, new organizations, old and new

approaches will solve the complex problems of

weapons development and compliment the

changing political philosophies of administrations. This book offers another perspective, i.e.,

a “snapshot in time,” which will provide future

readers a historical perspective on the acquisition systems of these countries.

“Looking at another system helps illuminate our

own.”2

 Understanding other countries helps us

to better understand ourselves. Ideally, by comparing countries to one another, we can get a

“feel” for the diversity of approaches to acquisition, understand in part how these systems have

evolved, and draw our own conclusions as to

the relative merits and weaknesses of different

forms of political, military and bureaucratic

organizations. As we look at the different ways

other countries organize, manage, and develop

weapon systems, we are offered a unique understanding of our own system. Readers should

look beyond similarities and differences to discern underlying principles and their political

consequences in the different countries.

While reading this book and evaluating the systems in these countries, the reader should

understand each country’s historical political

environment, the organizations responsible for

acquisition, and the processes used to develop a

system. Their political systems, defense and

security needs, economic resources, and cultures

have all evolved over time. To provide a comparative basis, the structures, the functions and

the processes are presented in each section of

the chapters. Also, where appropriate, each

section is introduced with a short historical

background to provide a setting for the current

organization and its processes.

Montesquieu said “that at the birth of political

societies, it is the leaders of the republic who

shape the institutions but that afterward it is the

institutions which shape the leaders of the

republic.”3

 Organizations mold behavior, but the

organizations were created for a variety of

reasons to include ideology, cultural constraints

and history. What is the effect of political and

bureaucratic institutions on the acquisition system? What special problems arise from public

accountability and political control? The view

of the acquisition environment shown in this

book will provide insight for those interested in
Introduction

xi

understanding how the systems in each of these

countries operate.

The first four parts are organized around a specific country and cover four general topics—

the political environment, the military and the

requirements process, the acquisition system,

and the defense industrial base. The political environment is described to include the legislatures, the elected politicians and the roles they

play in acquisition. This provides the backdrop

for how the system operates.

The second section looks at the overall military

organization as it relates to acquisition and

modernization of the military forces. What is

the role of the military in the development of

requirements?

The third section looks at the acquisition organization and its structure. It tries to answer these

questions: What are the military and civilian

roles? What type of education and training do

they provide their acquisition personnel? How

does each country manage a major program?

What are their approaches? What are the different budgeting and planning systems? How is the

procurement process structured? What is the role

of competition? How do they approach source

selection? What types of contracts do they use?

What type of oversight do they perform on their

contractors? How do they test new equipment?

The fourth section looks at the defense industrial base. The fall of the Berlin Wall symbolizes the changes brought about by a changing

world. The worldwide sale of defense equipment

has dropped and national defense budgets have

eroded, yet threats still exist and the need for a

strong defense capability still exists. The four

nations have seen changes in their defense

industrial base as a result of the changing world.

Consolidation and the creation of large defense

contractors, such as Lockheed-Martin, and discussions of the creation of equally competitive

firms in Europe are just some of the initiatives

undertaken to respond to the changed environment. How have each of these nations responded

in the past to the need to build defense equipment? What is the role of private enterprise?

What is the public armory role? How has the

relationship between industry and government

been maintained? What type of industrial base

does each country have?

Part 5 provides a comparison of the four systems.

This book can be read several different ways.

For those with an interest in a specific country,

the individual country part will provide insight

into how they do business. For those interested

in a comparative analysis, Part 5 takes a look at

all four countries and compares and contrasts

the approaches to delivery of weapons system

and how the system operates.

Recognizing the limitations of this work, the

authors have added a recommended reading list

to each country’s part to provide further insight

into the culture, the political system and the

military acquisition system.

Finally, a caveat in reading this book. Our intent

is not to provide an analysis of which system is

best, but rather insight into the national practices and approaches to facilitate successful

collaboration among our nations.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

xii

ENDNOTES

1. Address of Under Secretary of Defense for

Acquisition and Technology, Honorable Paul

G. Kaminski to ComDef ’96 Conference

Omni Shoreham Hotel, Washington, D.C.,

April 1, 1996.

2. Richard Neustadt, 1980.

3. Jean-Jacques Rousseau, The Social Contract,

translated by Maurice Cranstron (Harmondsworth: Penguin Books, 1968), page

87.
Part 1 France

1-1

PART 1

FRANCE
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-2
Part 1 France

1-3

The Legacy of the Revolution

Once freedom was won, it had to be codified.

Jurists, inspired both by the philosophy of the

Enlightenment and by a

long-standing

French legalist

tradition, gave

France its first

constitution in

1791. Fifteen other

constitutions followed, leading to the

1958 Constitution

which is in effect today. Beneath this apparent constitutional instability lies a genuine concern for the state and for the idea of public service, defended by an administration recruited

on the egalitarian basis of merit. From the start

the French constitutions were founded on a new

principle, the principle of national sovereignty,

as opposed to royal pleasure.

The King’s vacillation, his flight to Varennes,

and the appeal to foreign forces to intervene

against the nation led to the downfall of the constitutional monarchy. After the attack on the

Tuileries Palace, on 10 August 1792, the First

Republic was proclaimed on 22 September 1792

and lasted seven years. After this period of

Chapter 1

HISTORY AND TRADITIONS

“Old France, weighed down by history, bruised by wars and revolutions, going back and forth without respite from greatness to decline,

but recovering, from century to century, through the genius of

renewal.” — Charles de Gaulle

FROM THE FRENCH REVOLUTION

TO 1945 (1789-1945)

Founding Ideas and

Values of the Revolution

France asserted its identity as a nation with the

Revolution of 1789. On 14 July 1790, a year

after the fall of the Bastille, delegates from all

parts of the country flocked to Paris to celebrate

the Fête de la Fédération and proclaim their

allegiance to one national community. This was

the first example of a people expressing their

right to self-determination, a right the French

claimed for themselves and then offered as a

model to all the other nations of Europe and the

world. This display of national unity was deliberately organized on the first anniversary of the

fall of the Bastille, the first revolutionary act by

the people against the arbitrary power of the

royalty, an act that stamps France as one of the

cradles of liberty.

Another outgrowth of this concept of a “nation

open to all” who define themselves as “free men”

was the Declaration of the Rights of Man and

the Citizen (26 August 1789), which claimed to

be universal in application.

FRANCE
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-4

instability, Bonaparte, one of the Republic’s

most brilliant generals, became First Consul,

then Consul for Life before finally, in 1804,

being crowned Napoleon I, “Emperor of the

French.” The Consulate retained a Republican

model of government, but the First Empire

restored such monarchical forms as authority

vested in the person of the ruler, and it set up a

new nobility. Still, the most important part of

Napoleon’s legacy was inspired by the heritage

of the Revolution, which Napoleon consolidated

in many areas; for example he promulgated the

Civil Code in 1804, and set up the prefectural

system, the Council of State, the Bank of France,

the Ecole Polytechnique and the Ecole Normale

Supérieure—all institutions which survive to our

day.

After Napoleon’s defeat at Waterloo in 1815,

France once again became a monarchy when

Louis XVIII was called to the throne; he was

succeeded by Charles X and then, after the Revolution of July 1830, Louis-Philippe. The Restoration was followed by the Second Republic

(1848-1851) and the Second Empire (1852-

1870). In 1875 a republic was proclaimed for

the third time; France has been a republic ever

since. The Third Republic enshrined in French

political tradition the seven-year presidential

term, still the rule today.

The powerful aspiration to equality, inherited

from the Enlightenment philosophy of

Rousseau, stands out as the most resonant principle of the revolutionary movement. This is the

most original characteristic of the French Revolution within the great sweep toward freedom

that radiated from the shores of the United States.

The aspiration to equality has been decisive in

determining French behavior and attitudes since

1789. The concern for civic and social justice

inspired the radical movement, a typically

French political current, and has long been

expressed in the egalitarian, individualist and

liberal aspirations of the middle classes, equally

hostile to the privileges of the favoured few and

the collectivism of the masses.

The Dreyfus Affair and the Army

At the turn of the 20th century the Dreyfus Affair

made a profound impact on French society.

Alfred Dreyfus, an Alsacian officer of Jewish

origin, was stripped of his rank and sentenced

to penal servitude for treason; his conviction by

a military court, inspired by the prevailing antiSemitism, was upheld for reasons of state. The

fight for truth and for the release of Capitain

Dreyfus spread, thanks to the commitment of

the intellectuals and of the novelist Emile Zola,

whose article “J’accuse” was published in the

newspaper L’Aurore. Dreyfusards and AntiDreyfusards clashed. Finally Dreyfus was

rehabilitated. Supporters of the republic had

triumphed over their monarchist and clerical

adversaries; the key republican principle of

supremacy of civilian authorities over the

military had been recognized.

At the same time, the government committed

the army to the conquest of a vast colonial

empire, an undertaking designed to demonstrate

that despite the defeat in 1870, France still had

a role to play in the world. Military service

became compulsory, and French patriotism

yearning for a return to the nation of the lost

provinces (Alsace and a part of Lorraine) was

nurtured starting in the school years.

From World War I to World War II

The defeat of 1870 prompted France to break

out of the diplomatic isolation that had left it

facing Prussia alone. France moved closer to the

United Kingdom (the Entente Cordiale, signed

in 1904), to Russia (alliance signed in 1893),

and to the Balkan states hostile to Austria-Hungary (Serbia, Montenegro). These efforts led to

the formation of a diplomatic and military bloc
Part 1 France

1-5

(the Triple Entente) in opposition to the Triple

Alliance (Triplice) made up of the German and

Austro-Hungarian Empires and the Kingdom of

Italy, later joined by the Ottoman Empire. When

the heir to the Austro-Hungarian throne died on

28 June 1914 in a hail of bullets from a Bosnian

Serb in Sarajevo—then under Austrian domination—the system of alliances went into action

and set off World War I.

On 3 August 1914 France went to war against

Germany and Austria-Hungary, joining forces

with England and Russia; these allies were later

reinforced by Italy and the United States. In

every town and village of France, monuments

dedicated to those who died during the “Great

War” stand as a reminder of the bloodiest episode

in the history of France. The massive decimation of young men dealt a lasting blow to the

demographic growth of France. The economic

effects were no less serious, for material losses

were heavy; they have been estimated at a

quarter of the national wealth.

Yet the Third Republic emerged strengthened

by the victory of the union sacrée of a wide range

of political parties united in the sacred cause of

defending the nation. Raymond Poincaré’s

National Union dominated political life in the

1920s. Only the Socialist left was excluded; this

force had been split in two since the founding

of the Communist Party in December 1920.

After the victory of the Socialists in 1936, the

new Premier, Edouard Daladier, initially

believed concessions to Hitler at Munich in 1938

would make it possible to avoid hostilities; but

on 3 September 1939 he committed France to

World War II alongside the British.

Dark Years for the French State

With the invasion of France, the Third Republic

collapsed. On 10 July 1940 Parliament gave full

powers to Pétain, who set up a new regime at

Vichy, the provisional capital. The new French

State (État français) was personal, authoritarian, corporatist, and discriminated against Jews,

who were subject to a special statute.

The Resistance and the Honor of France

As early as 1940 a small number of resistance

movements began to spring up. General Charles

de Gaulle, speaking from London on 18 June

1940, issued a call to the French to continue the

fight on the Allied side. He became the focus of

a resistance movement outside France, comprising the Free French Forces (FFL) and a French

National Committee, to which some colonial

territories rallied. In France itself, isolated individuals sabotaged Nazi installations and fought

against the occupant and the Vichy regime. This

internal resistance grew and developed into

movements and networks winning the support

of an ever-larger part of the population. With

the final crushing of the Third Reich in 1945

the war ended.

POST 1945

Reconstruction

Twice France had to rebuild, but in conditions

and a world situation which differed greatly

following victory in 1918 and liberation in 1944.

The lessons the country drew from the two wars

and the intervening depression that had weighed

on it after 1929 led to radical changes in its

political, economic and social structures. The

economic results began to show in the 1950s,

the period which has since become known as

“the thirty glorious years” (1945-1975). The role

of the state, traditionally important in France,

emerged stronger than ever. Significant evidence

of the nation’s new buoyancy can be seen in the

demographic renewal of the postwar period, with

a birth rate which started to rise sharply after 1943.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-6

(EOEC), set up in April 1948 to distribute the

American funds. In April 1949 the nation

became a member of the Atlantic Alliance. It

also dropped its policy of demanding reparations from Germany and its goal of seeking to

keep that country economically weak. Instead

it opted for a policy of entente with a West

Germany integrated into a united and democratic

Europe. Jean Monnet and Robert Schuman, in

agreement with Chancellor Konrad Adenauer,

were instrumental in launching the construction

of Europe, laying the foundations for it with the

European Coal and Steel Treaty (ECSC) in 1951.

However, France rejected the treaty to establish

a European defense community (EDC); both the

Communists and the Gaullists opposed the proposal. On the other hand, the treaties setting up

the European Economic Community (Common

Market) and Euratom (European Atomic Energy

Community) were signed in Rome on 25 March

1957.

General de Gaulle Returns

“Difficulty attracts the man of character, because

it is by embracing it that he realizes himself.”

— Charles de Gaulle

By this time decolonization led to a serious crisis

that brought the Fourth Republic close to collapse. Decolonization had started in Indochina,

from which France retreated after eight years

of a difficult war. Pierre Mendès France, president of the council, ended the conflict within an

international framework with adoption of the

Geneva Accords of 20 July 1954. Mendès

France, followed by Edgar Faure and Guy

Mollet, recognized the independence of

Morocco and Tunisia (1956), while in subSaharan Africa a peaceful process of decolonization had gotten underway. But the French

army, using young conscripts, became involved

in Algeria in a conflict that broke out in 1954

and lasted until 1962.

France Since the Fourth Republic (1945)

After the Liberation the political forces that had

emerged from the Resistance (Communists,

Socialists and Christian-Democrats) and had

supported General de Gaulle’s provisional government quickly diverged, disagreeing especially

on constitutional issues.

The former leader of Free

France left the government in January 1946. It

took two constituent assemblies elected by universal suffrage—women

having been given the

vote in 1944—and three

referendums before the

constitution of the Fourth

Republic was finally

adopted on 13 October

1946 and then promulgated on 27 October of

the same year. The first

president, Vincent Auriol, was elected in January 1947 by Parliament, and he had only limited powers. Nevertheless, important measures

were taken during this period: reconstruction,

generalized health insurance, labour-management committees, nationalization of key sectors

of the economy, economic planning (Monnet

Plan), establishment of the Atomic Energy

Commissariat (CEA).

The New Republic and the Atlantic Bloc

Divisions resulting from the Cold War and

decolonization were soon grafted onto the

internal divisions. France accepted the financial

aid offer of the Marshall Plan, introduced by

United States Secretary of State George Marshall

on 5 June 1947 to support the reconstruction

effort in Europe, aid that was refused by the

Soviet Union and in its wake the countries of

Eastern Europe. France joined the European

Organization for Economic Cooperation

The Eiffel Tower
Part 1 France

1-7

In 13 May 1958 Algiers was the scene of riots

by the French of Algeria that brought down the

last government of the Fourth Republic. General

de Gaulle was called out of retirement at

Colombey-les-Deux-Eglises by President René

Coty, and on 1 June 1958 he was invested by

the deputies to take over the reins of government. He began to implement the political

concepts for which he had not been able to win

acceptance in the past. On 28 September 1958

the Constitution of the Fifth Republic was

adopted by referendum. It applied not only to

metropolitan France but also to the overseas

possessions, which were invited to join with

France in the “Community.” All the countries

of French Africa (except Guinea) voted in favour

of the new constitution, but they gained complete independence after 1960, although they

continued to retain special ties with France. The

Constitution of 4 October 1958 gives the foremost role to the President of the Republic. On

21 December 1958 de Gaulle was invested with

the highest office by a college of deputies,

senators and local elected officials.

De Gaulle later called a referendum that

approved election of the head of state by direct

universal suffrage (28 October 1962). He was

himself elected president by this system in the

second round of voting on 19 December 1965,

running against François Mitterrand, the

candidate of the left.

Asserting France’s World Role

The “balance of terror” and the relative détente

between the two blocs favoured the development

of a special role for France. De Gaulle organized a meeting in Paris between Khrushchev

and the Western allies in May 1960 (it failed in

the wake of the U2 affair). He undertook many

overseas visits and delivered many speeches,

some of which had wide impact, for example in

Cambodia in August 1966 and Quebec in July

1967. In 1964 France became the first Western

state to establish diplomatic relations with the

People’s Republic of China. The new institutions and a lasting and disciplined majority of

Gaullist members of parliament ensured a long

period of stability for the government. Economic

prosperity and a newly stabilized monetary

situation, symbolized by the introduction of the

“new franc” in 1960, allowed de Gaulle to pursue

a very active foreign policy. His goal was to

assert France’s independence and its role on the

world stage. In support of this policy he set about

building the country’s nuclear capacity. On 13

February 1960 France exploded its first atomic

bomb at the Reggane base in the Sahara. France

went on to acquire thermonuclear arms (first test

in 1968), and nuclear-armed aircraft, missiles

and submarines. Like its British and American

allies and like the Soviet Union, France became

a nuclear power. Because of the U.S. refusal to

let France take part in the collective decision on

use of nuclear weapons in NATO, de Gaulle

decided on 1 April 1967 to withdraw the French

army from NATO’s integrated military command, but France remained a member of the

Atlantic Alliance.

Towards European Unity

“Europe would have the best possible organization if all the nations contained in it...would

recognize the supremacy of a general parliament

placed above all the national governments and

invested with the power to decide their disputes.”

— Saint-Simon, ‘Reorganization of Society’

France pursued a two-pronged European policy.

On one prong, it in worked toward what de

Gaulle called “détente, entente and cooperation”

with the Soviet bloc in an effort to end the Cold

War, and lay the foundations for a Europe

stretching “from the Atlantic to the Urals;” on

the other prong, it sought to implement the

Rome Treaty while firmly defending the sovereignty and basic interests of the states. For this

reason, for six months in 1965 France refused
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to participate in the European Community institutions because it judged that the European

Commission had exceeded its powers (the socalled “empty chair” policy). This crisis led to

the Luxembourg compromise providing that

when a member state believes its fundamental

interests are threatened, a decision in the matter

must be reached by unanimous agreement. In

other areas, France’s proposals for political

union failed (Fouchet Plan), and de Gaulle twice

opposed Britain’s entry in the EEC, which he

considered entry premature.

However, the most important legacy of these

years remains the establishment of close cooperation between France and Germany, a development due to the personal relations between

Chancellor Adenauer and General de Gaulle.

The Chancellor’s official visit to France and the

General’s to Germany, the founding of the

Franco-German youth office and finally the

signature of the Elysée Treaty in 1963 set the

seal on this rapprochement. The Franco-German

tandem became the engine for European

construction.

The Watershed Year of 1968

and the Succession to de Gaulle

“Tomorrow will not be like yesterday. It will be

new and it will depend on us. It is less to be

discovered than to be invented.”

— Gaston Berger

During the 1960s, profound changes in the

French economy aroused concern and led to new

social aspirations which the proliferation of new

media (transistors, television) helped air

throughout the nation. The events of May-June

1968 became their catalyst.

The student uprisings occurring in many industrialized countries reached France, where the

universities were ill-prepared to handle the growing numbers of young people seeking higher

education. Clashes with the police took place,

especially in Paris in May 1968, and the government was jeopardized by a wave of strikes

on a scale not seen since 1936. After a firm

speech by de Gaulle, his supporters rallied; following dissolution of the National Assembly and

new elections the situation was restored in June

1968. Less than a year later, however, on 28 April

1969, de Gaulle left office permanently when

the nation rejected a referendum on regional

autonomy and reform of the Senate. One of his

former prime ministers, Georges Pompidou,

succeeded him in the elections of 15 June 1969;

after Pompidou’s premature death Valéry

Giscard d’Estaing, his finance minister, was

elected president on 19 May 1974.

At home two political proposals were opened

to debate: the plan for a “new society” put forth

by Prime Minister Jacques Chaban-Delmas

(1969-1972) and President Valéry Giscard

d’Estaing’s “advanced liberal society”(1974 –

1981), an attempt to reconcile market-economy

and social-democratic principles and build a

broad social consensus.

The Left Comes to Power

The Socialist Party, which under the impetus of

François Mitterrand had emerged reorganized

from its congress at Epinay in June 1971,

along with the Communist Party and the

Radicaux de gauche (Radicals of the Left)

formed the Union de la Gauche ( Union of

the Left) before the 1973 legislative elections

and adopted a common program for government. Despite muted tensions, momentary

ruptures and then abandonment of the common program in 1978, the union was resuscitated for the presidential election of April-May

1981 and François Mitterrand was elected

against incumbent President Valéry Giscard

d’Estaing.
Part 1 France

1-9

1981–1995: Changes in Government

For the first time in the history of the Fifth

Republic, the left had come to power—an alternation in the governing parties that demonstrated

the stability of the institutions. This stability was

further confirmed between 1986 and 1988, a

period of “cohabitation” of a conservative prime

minister, Jacques Chirac, and a Socialist president; and again when François Mitterrand, reelected in 1988, appointed the Liberal Edouard

Balladur as his prime minister after the March

1993 legislative elections were won by the

conservatives.

Between 1986 and 1988 the government of

Jacques Chirac, in keeping with its policies of

economic liberalism, privatized a part of the

public sector (the television channel TF1, for

example) and deregulated some areas of the

economy. After François Mitterrand was reelected, the National Assembly was dissolved

and new legislative elections held which gave

the Socialist party only a relative majority. The

succeeding Socialist government of Michel

Rocard did not go back on the privatizations.

However, as unemployment persisted the governments of both left and right tried to address

the problems through “social policies” by setting up on-the-job training programmes, public

works projects partially financed by the state

and, after 1988, a “minimum insertion revenue”

(RMI) paid by the state to persons over the age

of 25 who were not otherwise provided with a

minimum level of resources. This situation

resulted in certain disenchantment on the part

of voters.

The Socialists suffered a crushing defeat in the

March 1993 legislative elections. Conservative

groups dominated in the National Assembly;

Philippe Séguin (RPR) became president of this

body while Edouard Balladur was appointed

prime minister. His government met with some

success in economic areas but was soon put to

the test by political and financial scandals,

student unrest and the government’s inability to

make any real inroads on unemployment. Dominated by the confrontation between Jacques

Chirac and Edouard Balladur, two candidates

from the same political group (RPR), the climate

of the campaign for the presidential elections of

April-May 1995 was oppressive. Finally the second-round run-off election pitted Mr Chirac

against the candidate of the left, the Socialist

Lionel Jospin. Despite his unexpectedly strong

showing in the first round, Mr Jospin was

defeated and Jacques Chirac became the fifth

president of the Fifth Republic. Alain Juppé was

appointed to the post of prime minister.

Foreign Policy and the European Anchor

When he stood before the Bundestag in January

1983, President Mitterrand spoke out in support

of the presence of American Pershing II missiles in Europe, a deployment which was then

opposed by a powerful pacifist movement in

Germany. At other times, however, the French

President did not hesitate to distance himself

from his American ally in domains such as aid

to development, which Mitterrand defended in

his speech in Cancun, Mexico, in 1981, debt

cancellation for the least-developed countries (a

position France favoured), policy in the Mideast (France upheld the right of the Palestinians

to a state of their own) and in the international

trade negotiations (Uruguay Round of GATT

talks). France remained true to its own path but

at the same time joined in “United Nationsauthorized” military operations after Iraq

invaded Kuwait (1990) and the primarily

humanitarian interventions in Somalia and the

former Yugoslavia.

France’s commitment to European union has

been unwavering. France has consistently

supported the European Monetary System, the

single market which went into effect on 1 January

1993, political and diplomatic cooperation, and
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the decision to elect the European Parliament

by universal suffrage. These efforts culminated

in the signing of the Treaty on European Union

at Maastricht (Netherlands) on 7 February 1992.

Among other things, this treaty provides for

introducing a common currency and for

increased cooperation in the social, cultural,

foreign policy and security areas.

The vigorous debate in France over this treaty

and the close results in the referendum on 20

September 1992 which authorized ratification

by a margin of 51.04 percent to 48.95 percent

revealed doubts among the public about the

means chosen to pursue European policy, often

perceived as technocratic and remote.

Despite these internal debates—proof that

France’s tradition of a lively political scene

continues to thrive—the French remain by and

large strongly attached to the special role their

country plays in the harmonious unification of

the European continent. They believe it is

important for their nation to contribute to the

search for peaceful solutions to the troubles

arising in the world.
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Chapter 2

THE GOVERNMENT OF FRANCE

than a century old, which in order to ensure that

Parliament would be the supreme organ of

government, provided that the head of state

should not be elected directly by the people. The

1962 amendment helped strengthen the power

of the executive, conceived from the outset in

1958, as the cornerstone of the new institutions.

And constitutional practice, reinforced by

General de Gaulle’s personality, strengthened the

dominant role of the executive.

The Constitution defines the powers of the President as follows: The President is elected for

seven years—the longest term in any parliamentary system—and may be re-elected an indefinite number of times. The President is commander-in-chief of the armed forces and presides

over the Higher National Defense councils and

committees (article 15). He also plays a key role

in foreign policy, although he shares responsibility with the government in this area. The

President “shall see that the Constitution is

respected. He shall ensure, by his arbitration,

the proper functioning of the public authorities

and the continuity of the state” (article 5). He

appoints the prime minister and chairs cabinet

meetings. The President promulgates laws

(article 10) and signs the ordinances and decrees

decided upon by the Council of Ministers (article

13). The President is the guarantor of the

independence of the judicial branch (article 64);

he presides over the High Council of the

Judiciary that makes proposals or advises on the

appointment of judges.

The President makes appointments to the highest

civilian and military posts (article 13). He has

the right to grant pardons (article 17) and may

THE EXECUTIVE BRANCH

A Strong Power, Shared Responsibilities

The Fifth Republic, established by the Constitution of 1958, has provided France with institutional stability unequalled in the two preceding centuries, although it has not yet lasted as

long as the Third Republic. Its chief merit has

been to overcome the inefficiency of earlier

institutions while at the same time developing a

consensus of acceptance for them within the

nation. It is important to emphasize that

Gaullism, whose principles inspired the Constitution, is not an ideology but rather a means to

work toward clearly defined objectives: the

greatness of the nation, the predominance of the

nation’s interest over ideologies, a strong role

for the state, sovereignty of the people and the

identification of a leader. This last point led

General de Gaulle to propose a key institutional

reform, the election of the President of the

Republic by direct universal suffrage, which was

introduced by constitutional amendment in

1962.

The President of the Republic—

Predominant Power

The Constitution of 4 October 1958 provided

for the election of the President of the Republic

by indirect universal suffrage by an electoral

college comprised of members of Parliament and

various representatives of local elected officials.

General de Gaulle was chosen president under

this system in 1958 before being re-elected by

direct universal suffrage in 1965. The new

electoral procedure broke with a tradition more
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be invested with special emergency powers

(article 16). On the proposal of the government

or the assemblies he may call a referendum on

certain bills. After consulting with the government and the presidents of the assemblies he may

dissolve the National Assembly. Like the Prime

Minister, the presidents of the assemblies or sixty

deputies or senators, he may refer legislation to

the Constitutional Council, (the highest legal

authority in France, composed by high level civil

servants appointed by the President of the

Republic, the President of the Senate and the

President of the National Assembly), for review

of its constitutionality before it is promulgated

(see below).

The Constitution specifies the powers that are

exercised personally by the President and those

he shares with the Prime Minister. Thanks to

this balance, the Constitution has enabled

France’s institutions to work during periods of

“cohabitation” when the President and the Prime

Minister represent different political tendencies.

The Prime Minister and the Government

The government constists of the Prime Minister

and the ministers of the departments. It determines and directs the policy of the nation and

oversees the civil service and the armed force.

It is answerable to Parliament (article 20). The

Prime Minister, who is appointed by the President of the Republic, is the “Head of the

Governement” and is responsible for national

defence. He ensures implementation of the law

(article 21). Within the limits imposed by the

Constitution, he has regulatory powers (article

21). This is a fundamental point; while laws are

passed by Parliament, regulations (decrees and

ministerial orders) emanate from the government, that is, the Prime Minister and the other

ministers. The 1958 Constitution introduces an

important innovation in this respect by making

a clear distinction between the domain of the

law, defined within strict limits in article 34, and

the domain of government regulations which

includes all matters other than those that fall

within the legislative sphere (article 37). In

exceptional circumstances regulatory power may

be expanded if Parliament authorizes the

government to take through ordinances, for a

limited period of time, decisions that are normally within the legislative sphere (article 38).

This procedure has been used to modify the law

regarding labor regulations.

Apart from its regulatory power, and in common with other parliamentary systems, the government shares with members of Parliament the

power to introduce legislation. But the government enjoys an unquestionable advantage over

Parliament because it can set the agenda in the

assemblies (article 48) and may call for a vote

bloqué, a procedure which allows the government to pledge its responsibility on the vote of a

bill. Last but not least, the Prime Minister can

decide to pledge the government’s responsibility before the assembly either on its programme,

on a statement of general policy, or on the vote

of a bill (article 49, paragraph 3). The text is

deemed to be adopted unless a motion of censure

is filed in the National Assembly and wins a

majority of the deputies’ votes. If this happens,

the Prime Minister must tender the resignation

of the government to the President. This procedure, unique in Western Europe, reflects the

determination of the framers of the 1958 Constitution to give the government stability and

enable it to govern without obstruction from

Parliament.

Thus in France the Prime Minister is answerable to Parliament, as is the rule in all parliamentary democracies, but in practice he also has

to have the confidence of the President of the

Republic. So the French system combines elements of both parliamentary and presidential

systems and cannot be categorized as belonging

fully to either one. As the head of government,

the Prime Minister has greater authority than
Part 1 France

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the other members of government, who are

appointed by the President upon the Prime

Minister’s proposal. This role, together with the

powers conferred on him in article 21 (see

above), gives him considerable latitude for

action. He also has access to special administrative facilities such as the Secrétariat général

du government, the permanent staff of his office.

The Cabinet

The number of cabinet members varies according to political priorities and balances of each

governement. Cabinet ministers take part in

setting the governement’s policies in cabinet

meetings. They must countersign government

acts in their areas of competence. They are also

required to defend the policies of their ministries before Parliament. Finally, they are responsible for seeing that the administrative services

under their direction carry out governmental

decisions effectively.

Cabinet ministers may not sit in Parliament and

are also forbidden from holding civil service

employment or a job in the private sector. However, they may occupy elected positions at the

local level up to a maximum of two, such as

regional councilor or Paris municipal councilor.

Cabinet ministers are individually answerable

to the Prime Minister and the President. Resignation may be spontaneous (for personal

reasons), automatic (collective resignation of the

cabinet) or provoked (disagreement with the

Prime Minister or the President).

The makeup of the staff that assists every minister—the “cabinet ministériel”—is specific to

France. Staff members are chosen by the minister and are usually drawn from the ranks of

senior civil servants. In carrying out their duties,

they rely heavily on the central administration

and on the decentralized services of the state in

the departments, regions and sometimes in

foreign countries.

THE LEGISLATIVE BRANCH

Parliamentary Powers

It might seem that Parliament lacks powers in

the face of such a strong executive, but this is

not the case—although it is not as influential as

the British House of Commons, the German

Bundestag or the United States Congress. The

National Assembly, formally known as the

Chamber of Deputies (which meets in the Palais

Bourbon) and the Senate (sitting in the Palais

du Luxembourg) share the traditional role of

parliaments in all countries.

The 1958 Constitution assigns an important role

to Parliament in its dual capacity as a check on

government and as a legislative body. In its

legislative role, article 34 of the Constitution

defines its area of action, which includes finance

laws (the budget) and the so-called “program

laws” setting goals for the state’s economic and

social action. Before program laws are brought

up for debate, the government consults the

Economic and Social Council, a body composed

of men and women representing a broad range

of social and professional categories. In addition the government often turns to the Economic

and Social Council for studies of a particular

issue in order to have the views of a wide

spectrum of the citizenry.

When laws are drawn up, bills introduced by

the government (called projets de loi) are first

submitted to the Council of State (see below)

for consultation and then are discussed by the

cabinet before going to one of the two houses

for debate. In order to be adopted, both government-sponsored bills and those introduced by

Parliament (propositions de loi) shuttle back and

forth between the two assemblies until they are

passed in identical terms by both. If the two houses

cannot agree on a text, there are procedures to work

out the differences. If these fail, the National

Assembly has the last word (article 45).
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provided for two ordinary sessions each year:

the fall session, opening on 2 October and lasting for 80 days, devoted mainly to the discussion of the finance bill, and the spring session,

opening on 2 April and lasting for a maximum

of 90 days.

However, the Constitution was amended in the

summer of 1995 and mandates a single ninemonth session each year. In addition, the president may call special sessions he opens and

closes by decree. National Assembly sessions

are generally open to the public and are reported

in the press; debates are published in full in the

Journal officiel.

Once a week, on Wednesdays, a question period

is held when deputies may put questions to

members of the Cabinet. These sessions are

broadcast on television.

Deputies usually belong to one of the Assembly’s

political groups, within which they take part in

the proceedings of the specialized committees.

Each deputy also belongs to one of the National

Assembly’s six standing committees: cultural,

social and family affairs; foreign affairs; national

defense and the armed forces; finance, general

economy and planning; legal matters; production

and trade.

Unlike the Senate, the National Assembly has

the power to force the government to resign; it

may do so by passing a motion of censure.

Another distinction between the two houses is

that finance bills must be submitted to the

National Assembly first (article 39).

The Senate

The Senate comprises 321 members who are

elected for a nine-year term. Senators are chosen

by indirect universal suffrage by an Electoral

College, in each department, formed of deputies,

regional councilors, general councilors and

The way constitutional practice has evolved is a

source of unending debate on the real role of

members of Parliament. During the 1988-1993

legislature, 455 laws were passed of which 60

were introduced by members of Parliament. The

trend toward an increasing number of laws is

common to all democracies as they strive to

respond to the complexities of an ever-changing

society.

In the defense arena, Parliament makes laws to

define how defense is organized, constraints

imposed on citizens

(e.g. the national service), finance laws

(annual budget for

the armed forces),

military programming laws in which it

periodically makes

statements about the

main orientation of

France’s military

policy (equipment for the armed forces over

several years). As an example, Parliament

approved the program law in 1996 which set

out the main decisions for the defense posture

through 2015 and includes both operating costs

and capital expenditures. It will receive an annual progress report on the ministry’s progress.

The yearly program authorizations and payment

clearances are set within this overall guidance

and the annual budget.

The Chambers – The National Assembly

The National Assembly is made up of 577

deputies elected by direct universal suffrage,

voting for one candidate in two rounds; they

represent districts of varying sizes with one

deputy representing approximately 100,000

inhabitants. Each legislature is elected for a

period of five years, which may be abridged if

the President of the Republic decides to dissolve

the Assembly. The Constitution originally

Arc de Triomphe
Part 1 France

1-15

representatives of the municipal councils. Onethird of the senators is elected every three years;

they include a high proportion of locally elected

officials.

Like the deputies, senators are first and foremost legislators. However, their legislative

power is essentially expressed through the right

to make amendments. Bills are debated in the

Senate just as they are in the National Assembly, that is to say, initially in one of the six standing committees (cultural affairs; economic

affairs; foreign affairs; defense and the armed

forces; social affairs; finance and legal matters)

and then in public session.

Except for the vote of a motion of censure, senators and deputies have identical powers in providing a check on the government. They may

submit written questions to the ministers (from

5,000 to 6,000 each year), debate statements of

general policy, carry out fact-finding missions

and form investigative committees.

In addition to voting the law and keeping a check

on the government, the 1958 Constitution calls

on the Senate to represent the territorial units of

France, that is the municipalities, departments,

regions and overseas territories. French citizens

living abroad are also represented in the Senate.

The voting procedure and the senators’ long term

of office promote political stability, which is

reinforced by the fact that the Senate cannot be

dissolved. The Senate’s permanency is the reason why the Constitution confers on its president the task of temporarily standing in for the

President of the Republic in the event the office

is vacated. This has happened on two occasions:

in 1969 after General de Gaulle resigned, and

again in 1974 when President Pompidou died

in office. The Senate thus acts as an anchor guaranteeing the stability of the country’s institutions, for it ensures continuity in government

operations and thus of the state as a whole.

The Civil Service

Civil servants in France have a very special social

position, due to the traditionally very important

role of public activities in the country. They

always enter the administration through a nationwide competition, sometimes also open to other

EU (European Union) member citizens. The

great diversity of positions offered and the

difficult job market in France make these

examinations very attractive. In the strictest

sense, public service “la fonction publique”

covers a wide variety of sectors.

 The public administration, “l’administration

publique” directly administered by the State,

which covers tax collecting, defense, police,

justice. More than two million employees work

for it; employees in the military and judicial

branches have a special status.

The territorial administration, “la fonction

publique territoriale” works on a local level in

the regions, departments and townships.

National Education, the public school and

university system, employs more than 1.3

million people and is growing as fast as the local

civil service, with the devolution of central

power to local administration, called

“décentralisation.”

The medical public service, “fonction publique

hospitalière,” in charge of hospitals, retirement

homes, etc., employs 830,000 nurses and

administrators.

Additionally, employees in the following sectors have civil servant status: public services

operators (like the National Railroad Company),

public utilities, the national mail service, France

Telecom (the recently privatized telecommunication company), and France Television (the

French public television); public administrations

(like the health, social security and welfare system), Securité sociale; public establishments,
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“Etablissements publics” (like the National

Employment Agency), ANPE; some airports,

and public research institutions (like CNRS),

INSERM (Medical Research), INRA (Agriculture Research), IFREMER (Oceanography) or

CEA (Atomic Research).

Every year, more than 40 000 people are hired

through this competitive process and admitted

through three main categories of exams: the “A

category” exam is open to candidates with the

minimum level of a university level degree to

work in the public corporations as engineers,

professors or police officers; the “B category”

exam is open to candidates with a minimum

Baccalaureate (the equivalent of two years of

college) to recruit mid-level workers, like

secretaries, laboratories technicians, etc.; and

the “C category” exam, is often open to candidates with no degree to recruit workers and

administrative agents.
Part 1 France

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Chapter 3

DEFENSE

be incomplete, if it were not also expressed in

the context of defense.

Restoring political, historical and cultural

dimensions in Europe imposes the obligation of

asserting a European defense identity in

accordance with the objectives defined by the

European Union within a renovated North

Atlantic Alliance. Moreover, although France

remains free to evaluate conditions for its security and to choose its means, it recognizes that

the North Atlantic Alliance is the essential link

between Europeans and Americans, including

for missions on behalf of the UN (United

Nations) and the Organization for Security and

Cooperation in Europe (OSCE). Thus the

capacities of a renovated North Atlantic

Alliance—in which responsibilities are better

shared between the United States and Europe—

can be put at the service of peacekeeping or crisis

resolution missions.

France is founding member of the Western

European Union (WEU), created in 1954 by the

agreement of Paris, modifying the Treaty of

Brussels of 1948. WEU is considered as being

the European framework within which security

and defense matters should be dealt with. The

role of WEU has been defined in the declaration of Maastricht (1991) annexed to the Treaty

of the European Union.

During the summit of Cologne in June 1999,

defense ministers declared that WEU would have

finished its mission by the end of the year 2000,

and some of its functions could be transferred

into the European Union. With 10 full members, five observers, three associate members and

DEFENSE POLICY, STRATEGY,

ORGANIZATION

The Purpose of Defense

France is a peaceful nation. It does not have any

expansionist ambitions and has no declared

enemies. All its actions are designed for peacekeeping, but it does have interests to defend,

responsibilities to shoulder, and a world role to

play. The first objective of France’s defense

policy is to be able to defend its vital interests,

alone if necessary, against any threat from any

source. As much as ever, it is difficult to foresee

where the boundary between vital interests and

strategic interests will be in the future. Both must

be defended with determination. Essentially, the

strategic interests lie in peacekeeping within

Europe and adjacent areas (Mediterranean,

Middle East) and in areas essential to economic

activity and freedom of trade. Beyond that,

France has interests corresponding to its international responsibilities and to its position in the

world which, as for all countries, results from a

combination of historical, political, strategic and

military factors, as well as economic, scientific

and cultural factors. The security of these interests

cannot be guaranteed without suitable defense.

The second objective of French policy is to

ensure European and international stability. The

ability to maintain France’s position in the world

will be closely related to its ability to influence

the European construction and future developments in Europe. This European option is necessary for strategic and economic reasons. The

gradual restructuring of Europe is leading to the

definition of a political identity, which would
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-18

nine associate partner countries, WEU is one of

the largest European fora.

Finally, the third objective is to implement a comprehensive defense policy, which is not limited to

military and strategic aspects. More than ever,

defense must cover all of the country’s activities

and form a permanent part of national life.

Comprehensive Deterrence

French defense policy is guided by two principles:

independence—France alone makes decisions

concerning its future; solidarity— France is

ready to help its neighbors, it allies with whom

it acts jointly, and to meet its commitments in

Europe and in the rest of the world.

Its military strategy has been strictly defensive

for the last forty years. It relies on both nuclear

forces and conventional forces, the roles of the

two being mutually complementary. Today, the

main threat to the survival of the French nation

has disappeared, probably for a long time.

However, the risks related to proliferation and

dispersal of weapons of mass destruction have

multiplied and they weigh diffusely and insidiously on France’s strategic environment. In this

uncertain context, the object is still to deter an

aggressor from attacking vital interests by

retaining nuclear capabilities that are sufficient

to inflict much more damage on such an aggressor than the gains it could hope to obtain from

its aggression.

At the same time the number of crises endangering the vital interests of the French nation

have increased considerably. If such crises are

not properly kept under control they could

sooner or later lead to major conflicts with serious consequences. Under these conditions the

future of the country cannot rely on nuclear

deterrent alone. Conventional forces that are

gradually becoming fully professional and are

ready to undertake prevention, “projection,” i.e.,

expeditionary action and protective missions

now play a specific strategic role that is essential to France’s defense and the interests of peace

throughout the world.

Aspects of Defense Strategy

Deterrence

Deterrence remains at the heart of France’s

defense strategy. It constitutes the ultimate guarantee against any threat to her vital interests,

regardless of the origin and type of threat, in a

world where vigilance continues to be the order

of the day. Deterrence doctrine must, however,

be adapted to suit the new strategic environment.

In accordance with the strategy directions set

by the President of the republic, it relies on two

reduced and modernized components: a submarine component, constituted by four nuclear

submarines capable of launching new-generation missiles and equipped with ballistic missiles; an air component, implementing improved

medium-range air-to-surface missiles launched

from air force or navy aircraft.

Missions and Organization of the Forces

Organized, equipped and trained to face contingencies that are much more numerous and varied

than in the past, the armed forces must develop

or acquire the necessary operational and logistic

capabilities to carry out the four main categories

of mission assigned to them.

Entrance to

the Louvre
Part 1 France

1-19

into application a few years ago. The home country of France is subdivided into three specific

defense regions, identical for the Army, Air

Force and Gendarmerie. The Paris area has a

special military command structure: the Atlantic Region, Northeast Region and the Mediterranean Region. These Military Defense Regions

(RMD) are themselves subdivided into eight

Military Defense Districts (CMD) that form the

basic units of the military territorial organization

in times of crisis and wartime.

For the Navy, the defense of coastline installations and ports, and territorial maritime defense

is organized into two maritime regions: the

Atlantic Maritime Region, with headquarters in

Brest, itself subdivided into three maritime

areas—Cherbourg, Brest and Lorient.

The defense of the national airspace is centralized at the Air Force Air Defense Command,

with headquarters in Taverny.

The defense of the French overseas territories is

entrusted to five joint services high commands,

each having a specific zone of responsibility—

West Indies, Guyana, French Polynesia, New

Caledonia, South Indian Ocean.

The organization of the armed forces, their

professionalization and the significant reduction

in the number of training programs on the

national territory require a re-examination of the

territorial organization set up by the “Armed

Forces 2000” plan. Studies are under way, and,

in the coming years, they would result in our

territorial system being better adapted to the new

strategic environment.

France’s Defense Effort

France’s defense effort can be measured through

some financial and physical indicators. The first

financial indicator is the budget. At 184.7

thousand million francs (excluding pensions)

1. They must protect the vital interests of

France against all forms of aggression,

guarantee France’s territorial integrity.

2. They must contribute to the security and

defense of Europe and the Mediterranean,

with the prospect of a common European

defense policy ultimately being implemented, and within the North Atlantic

Alliance in the event of aggression.

3. They must contribute to actions conducive

to peace and the respect of international law,

under the auspices of the United Nations or

other competent international organizations.

4. They must carry out public service tasks, to

include civil defense, search and lifesaving

operations and other similar activities.

The capabilities required of the armed forces

are the result of engagement hypotheses and the

objectives that are set in each of these hypotheses.

The Men and Women behind Defense

In 1997 the Ministry of Defense still relies on

national service in its military form to provide a

relatively large proportion of its manpower

requirements. However, under the 1997-2002

programming law these mixed armed forces are

entering a phase of profound change, which is

to transform them into professional armed

forces. With France no longer having a direct

military threat at its land borders, Defense no

longer requires large numbers of personnel.

Moreover, the conditions under which armed

forces based on a high proportion of draftees

can be used are less and less compatible with

the needs resulting from the nature of new crises.

Territorial Organization

The current territorial organization is defined

in the “Armed Forces 2000” plan which came
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-20

(approximately $30.8B), the Defense budget

represented 11.6 percent of the State budget in

1998—approximately 2.19 percent of the Gross

Domestic Product. Two significant points—the

amount of investment is high (4.8 percent) compared with operating expenses (56.1 percent),

and the share of the budget earmarked for

nuclear forces is decreasing, currently at 9.0

percent of the Defense budget.

The second financial indicator can be drawn

from the military programming law. This law,

enacted on July 2, 1996, constitutes the first

legislative expression of the objectives set for

the armed forces by the President of the Republic on February 22, 1996. For the 1997-2002

period it provides the means for planning efforts

to be made for modernizing France’s defense

resources, and for professionalizing the armed

forces, while participating in the effort to reduce

the budget deficit. This law earmarks 86 thousand million francs (in real terms, based on the

1995 value) to equipping the French armed

forces, and 99 thousand million francs to operating costs. It organizes the changeover to professional armed forces by defining the changes

in staffing levels, it tailors equipment to fit the

new format, it instigates the re-structuring of

industrial resources, and it specifies the social

and economic support measures that are to be

implemented.

The characteristic physical indicators are represented by peacetime staffing levels and major

equipment in service. The staffing levels, including the Gendarmerie, were at about 548,280

civilian and military personnel in 1998, which

represents less than 1 percent of the population.

They are to decrease constantly to reach the

target set at 440,000 in 2002. The major equipment in service on December 31, 1997 included

786 tanks for the Army, 107 ships and 4 missilelaunching submarines (SNLE) for the Navy, and

380 combat aircraft for the Air Force.

The Délégation Générale pour l’Armement

(Delegation General for Armaments – DGA)

manages 80 percent of the defense equipment

budget, representing more than 10 billion Euros

per year (1 EURO = $1.04 and 6,55957 FF).

Industrial activities still employ 21,000 people

(17,600 for DCN and 3400 for SMA).

Organization of National Defense

The risks that France has to face are very diverse

and cover a wide range of intensity. Thus its

defense must be comprehensive and permanent,

even in peacetime.

The general organization of defense depends on

four principles: comprehensiveness—it concerns

the entire population and all sectors of French life;

permanence—it is organized and prepared even

in peacetime; unity—it is directed and coordinated

by the government; decentralization—there is an

authority responsible for each part of the country.

The main defense decisions are made by the

President of the Republic in councils chaired

by him (Council of Ministers, Council of

Defense, Restricted Defense Committee).

The Prime Minister, responsible for national

defense for global aspects, controls how these

measures are implemented; he does this through

the SGDN (Secretariat-General for National

Defense). The Minister of Defense is responsible for the preparation and execution of defense

measures to be carried out by his department; a

senior defense civil servant assists him in this.

The Minister of Defense implements the military defense policy (organization and training

of the armed forces, recruitment and management of personnel, armaments and infrastructure procurement). He is assisted by the Joint

Armed Forces Chief of Staff (CEMA)(preparing

for the future, international military relations),

the DGA, General Delegate for Armament,
Part 1 France

1-21

Figure 1. Organization of National Defense

Ministry of Defense

Joint Armed

Forces Staff

French Army

Staff

French Air

Force Staff

French Navy

Staff

Secretariat General

for

Administration

Secretariat General

for

National Defense

(SGDN)

Director of

Strategic Affairs

Delegation
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-22

(studies, research and production), the secretarygeneral for administration (DAF – financial

services directorate, DFP – personnel function

directorate, DAJ – juridical affairs directorate),

the chiefs-of-staff for the Army, Navy and Air

Force, the director of the ‘Gendarmerie

Nationale,’ and the director responsible for strategic affairs. The Joint Armed Forces Chief of

Staff (CEMA) reports directly to the Prime

Minister and the President in case of conduction

of operations. (See Figure 1.)
Part 1 France

1-23

Chapter 4

DGA: ROLE AND ORGANIZATION

“The future will be the sole judge of quality of

our work. Immense energy, imagination and

talent is being employed to identify, from

amongst the multitude on offer, the right directions to take to give us the defense system that is

best adapted to the conditions that will pertain

tomorrow and the day after; this shows clearly

the priority we give to preparing for the future.”

— J. Y. Helmer, DGA

Created on April 5, 1961 under the name

“Délégation Ministérielle pour l’Armement,”

DGA (Délégation Générale pour l’Armement)

is intended to provide the French armed forces

with the necessary equipment at the best cost

and in due time (see Figure 2). Its activities

cover:

• the management of armaments programs,

• the procurement of armaments equipment,

• the technical and scientific expertise related

to the outfitting forces,

• trials and evaluations, and

• overall training and support.

Three Directorates in Charge

of the Programs

The Forces Systems and Prospective Directorate

(DSP) monitors the research activities, conducts

the common technological development and prepares the programs. It ensures the technical consistency within the forces systems. It assumes

responsibility for the strategic deterrence

programs as well as those dealing with observation,

information and telecommunications.

The Armament Systems Directorate (DSA) is

in charge of the design and achievement of the

land-based naval, aeronautical and tactical missiles programs.The Program Managers belong

to this Directorate; they are fully responsible for

all aspects of program and receive support from

a “program integrated team” which includes

specialization such as procurement and quality

control.

The Program Management, Acquisition Methods and Quality Control Directorate (DPM) has

responsibility for funds management, to include

budget preparation. It is also responsible for

procurement, quality and logistics support of

including maintenance for the operational

forces. It make its specialists available to

program managers.

Two Directorates in Charge

of International Activities

The Cooperation and Industrial Business Directorate (DCI) has responsibility for bringing

efficiency and modernization to the existing

European structures and promotes the economic

dimension. It develops the abilities and qualifications necessary for working issues of European cooperation. It favours and accompanies

the consolidation of the defense industry. It exerts the public sector tutorship of the aeronautic

and defense industry and the conduct of support

and development actions for the small business.

(See Figure 3.)
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-24

Figure 2. Delegation General for Armaments Organization

Assistant

Director

Directorate for

Management

and

Organization

(DGO)

Directorate for

Human

Resources

(DRH)

Directorate for

Evaluation and

Test Centers

(CCE)

Directorate for

International

Relations

(DRI)

Directorate for

Co-operation and

Industrial Affairs

(DCI)

Délégation Général

pour l’Armement

Armament

Programs

Inspection

CHEAr

Directorate for

Forces Systems

and

Trend Analysis

(DSP)

Directorate for

Programs,

Procurement

Methods and

Quality

(DPM)

Directorate for

Weapon Systems

(DSA)

Services for

Aeronautical

Maintenance

(SMA)

Directorate for

Naval

Construction

(DCN)
Part 1 France

1-25

The International Relations Directorate (DRI)

has responsibility for DGA activities promoting the exports of French armament equipment

to foreign markets and the control of the

exports. It coordinates the development and

implementation of export strategy.

One Directorate in Charge

of Survey and Trials

The Directorate for Expertise and Test Centers

(DCE) has responsibility for providing the technical expertise and skills needed by program

managers and other DGA departments for the

testing of equipment and systems. It will also

provide support for external customers (industry, foreign governement and companies). DCE

manages all of DGAs technical and Test Centers

(See Appendix B for listing of technical and test

centers).

Two Directorates in Charge

of Industrial Activities

The Directorate for Navy Shipbuilding (DCN)

has responsibility for designing, constructing

and maintaining both French Navy and exported

ships and equipment. It also plays a significant

role in the export of Naval equipment (also see

industrial base discussion of DCN). (See

industrial base discussion of DCN and Figure 4.)

The Service for Aeronautical Maintenance,

“Service de la Maintenance Aéronautique”

(SMA), is responsible for aircraft maintenance

and maintenance of the industrial facilities.

Figure 3. International Directorate – DCI and DRI

International Directorate

DCI and DRI

Armament Attachés

Germany, United Kingdom,

Spain, Italy, Greece, Turkey,

United States, NATO, WEU

Armament Attachés

Germany, United Kingdom,

Spain, Italy, Greece, Turkey,

United States, NATO, WEU

Cooperation and

Industrial Affairs

Exportation

DCI DRI

Non NATO

Countries

NATO

Countries
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-26

Two Directorates in Charge of

Management and Human Resources

The Management and Organization Directorate’s

(DGO) main missions are the management

control, the improvement of the internal working

and notably the information systems, the management of operating credits and the implementation of the investment policy, the coordination

of support actions.

The Human Resources Directorate (DRH)

manages the career and the training policy so as

ensure the acquisition of the necessary experience and qualification of the personnels appointed

to the DGA for the execution of the mission.

The Center of High Studies

in Armament (CHEAr)

Created to emphasize the reorganization of the

DGA. The CHEAr trains the high level

workforce of armament personnel, delivers the

specialized information and promotes research

on strategy and general management.

Latest Developments:

The Reorganization of the DGA

Reorganized since the beginning of 1997, the

DGA is initiating a thorough reform of its

operation and working modes. Its purpose is to

reduce significantly the cost of armaments

Figure 3. International Directorate – DCI and DRI

Minister of Defense

DSP

Future

Systems

and

Prospecitve

DSA

Weapon

Systems

Programs

Management

DPM

Procurement

Methods

and

Quality

Armament Programs

DCI

Cooperation

and

Industrial

Affairs

DRI

International

Affairs

DCN

Naval System

Contractor

General Directorate for Armament (DGA)
Part 1 France

1-27

programs and timescales so as to enable France

to preserve a consistent and credible defense system. The DGA itself must reduce its operating

costs, focus on its core activities, change its

structures and methods of operation and reform

the procurement process.

The New Armament Policy

This new armament policy is meant reinforce

France’s comitment to increase European cooperation both at the program level and through

collaborative structures such as the Joint Armament Cooperation Office (OCCAR). Part of the

new armament policy includes the restructuring

of defense industry in Europe, leading to the

creation of national focus and prefigures the

emergence of European groups. This policy also

includes development of a strategic plan with a

view to refining export policy and to improve

the competitiveness of military exports.

Procurement Reform

The renovation of the program management

process and procurement reform, inspired by

improvements carried out by civilian industry,

will lead to a stronger integration of program

work teams based on a matrix organization.

Besides being responsible for the operation

capabilities, the program work teams will be given

objectives in terms of costs, delays, quality and

in-service support of equipment. The IPT members

will be trained to use modern program management tools and methods. They will be responsible

for achievement of their objectives. This new policy

which focuses on costs and delay reductions,

promotes the systematic use of competition at

prime or subcontractor level to achieve these

objectives. It also covers the participation of industry in funding for research and the demand

for productivity improvements equivalent to

those realized in civilian activities. Plus industry

has responsibility for providing quality products

and designing lower in-service costs of equipment.

The New DGA

To adapt France’s defense system to the new

geo-strategic environment and to budget reductions, a wide-scale reform process was launched

in February, 1996. This process involves the

armed forces, whose size is being reduced as

they shift from a conscript to a professional personnel structure, as well as the defense industry, which is presently engaged in a restructuring process at both national and European level.

The reform also involves DGA, whose assigned

objective is to operate drastic cuts in the cost

and time delays of armament programs.

To reach this goal, DGA gave itself a new structure in January, 1997. The previous organisation

based on operational environments (land, air, sea

and space) has been replaced by a structure

which reflects areas of activities (program management, industrial activities, tests and evaluation, and so on ) as well as specific skills (technical know-how, purchase, quality control, management control, and so on). The idea behind

this new organisation is to facilitate the introduction of new methods and policies all oriented

towards the development of high-performance

equipment at the lowest possible cost. In parallel, within the overall framework of the restructuring of the defense industrial sector, a new

purchasing policy is being implemented to

reinforce the competitiveness of the defense

industries.

DGA will also pursue an active co-operation

policy within European, and see that French

equipment is interoperable and fully compliant

with NATO standards.

Therefore, the new DGA, to prepare for the

future, has combined program management and

technical policy. It will also have a proactive role

in the field of industrial restructuring, cooperation development and export sales promotion.

This ambitious reform rests on the the successful
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-28

efforts of DGA personnel and the DGA’s

improved management system, now based on

responsibility and setting and fulfilling

objectives. It will profoundly change relations

with staff, with industry and internal operating

procedures.
Part 1 France

1-29

Chapter 5

DEFENSE ACQUISITION

industry has taken a cue from these methods to

manage its own development projects of comparable complexity. Moreover, under the pressure of competition, it has improved on these

methods. It has tended towards highly integrated program teams, reducing costs and time

even more, improving quality, and refining

purchasing policies for more efficiency.

Highly-integrated, Cross-disciplinary

Program Teams

The core of armament program management is

an integrated, cross-disciplinary team. It is entirely responsible for achieving the goals that

have been set for it, possesses the full range of

competence, uses modern methods and tools and

makes progress reports on the results obtained.

Thus program management in the DGA is formalized, with a program director and his direct

assistants. The rest of the team is composed of

contributing technical and management specialists, called the field specialists, and, along with

the representatives of the Armed Forces staffs

and the industrialists, form the integrated program team. This team must indeed be integrated,

as each member, whether from the Armed Forces

staffs or the DGA, considers himself responsible

for reaching the assigned objectives. Thus engineers and officers work in mutual confidence,

with the same determination to reach a common goal. The industrialists can also join the

team when needed, and participate actively to

realize the program goals. Typically a team will

be composed of 10-15 core team members with

the specialist called upon as necessary (see

Figure 5).

The application of an armaments policy adapted

to the new constraints of procurement reform

calls for a renewal of acquisition procedures, to

obtain even greater reductions in costs and

delays. The conduct of armaments programs is

a complex operation. The challenges are inherent and varied. They include defining and mastering specifications for new, technologically

ambitious and varied systems, controlling

rigorous testing and validation methods, dealing

with multiple contracting partners and schedules.

In France responsibility for organizing and managing programs, shared out among the various

chiefs of staff and the DGA, has been progressively refined over time. The distribution of tasks

is similar to what exists in industry. It involves

recognizing on the one hand the special features

of the specific requirements of the Armed Forces

and their user expertise in defining their needs.

On the other hand, the specific role of the DGA

is to satisfy these needs under best technical and

financial conditions. More generally, the Ministry of Defense is divided into three, equally

balanced groups—the Armed Forces Staffs, the

General Secretariat for Administration, and the

DGA—with different attributions and responsibilities. This organization ensures maximum

efficiency in dealing with ministerial affairs

while preserving the overview and decision

making powers that belong to the Minister of

Defense.

The defense sector has played a pioneering role

in developing methods for managing complex

projects that include many technologies, require

a high level of expertise and impose rigorous

management and quality assurance criteria. Civil
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-30

The principle of integration is opposed to the

purely sequential model, according to which the

general staff would first define the need, then

the DGA would specify the hardware, and finally

industry would propose technical solutions and

manufacture the equipment or systems. This

approach is not favorable for obtaining optimal

technical and financial conditions. On the contrary, the requirements, the specifications and

the technical solutions must be regarded as a

whole and optimized, and this can only be realized by a team of equally responsible actors,

working together. There is no question of abdicating individual responsibilities, but of exercising them while entirely aware of the consequences that one’s actions and decisions will

have on common costs and objectives.

Reinforced Competence

The team meets either permanently or at critical phases, depending on the program. The members, notably the director, the ranking officer and

the industrial managers of the program, receive

wide delegation from the hierarchy. Their

assignment to the program must last long enough

to ensure its continuity.

DGA staff who contributes to the program in

the following functional areas also assists the

program director: cost, planning, project management methods, quality, purchasing, risk management. This system is designed to provide the

program directors with the technical and functional specialists in complementary fields of

action, skills and training (see Figure 6).

Depending on the importance of a program, the

management teams may be full-time or parttime. The personnel preserve their links with

their original employers (the functional organization), but their job performance assessments

take into account their program directors’

assessment.

Thanks to their technical know-how, their

capacity for cost analysis and their varied

Figure 5. Integrated Program Team

DGA Service(s)-staff(s)

Program manager

with his specialists

Program officer

with his specialists

Industry

+

IPT
Part 1 France

1-31

professional skills, the management teams are

very well prepared to negotiate defense contracts

effectively.

The program teams are trained in the use of

modern methods and tools of program management: improved cost assessment capacity (cost

effectiveness studies, technical-operational studies, functional analysis, value analysis, logistic

support analysis), and design quality (forecast

reliability studies, project analysis, risk analysis, failure mode analysis, functional security).

A Process Reoriented on

Cost and Delay Reduction

Present day procedures, with their Feasibility

and Definition Phases, followed by development

and production, are being modified as part of

changes in acquisition in two directions—

reducing costs and delays and introducing

greater flexibility.

Now the life of an armaments acquisition program

is divided into stages and phases characterized

by the types of work involved as follows:

• Preparation Stage;

• Design Stage (Feasibility Phase and Definition Phase);

• Realization Stage (Development/Industrialization Phase and a Production Phase); and

• Utilization Stage.

Figure 6. A Matrix-like Organization to Manage Programs

DPM

Technical Division

Technical regulation standards

Operational and technical studies

Strategic and economic intelligence

Technical architecture x

Technical domain y

Common technologies and equipments

ILS and through life support

DRI DCI

DSP

DPM

DSP

DPM

Management control

Human resources

Industrial and international affairs

Defense security

DRI DCI

DRH

DGO

AD

Project director

Management Division

Plans, program, budget, finance

Methods, plannings, costs

Quality

Purchasing

Cost expertise
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-32

The purpose behind the changes are: first, the

Feasibility Phase of a program is preceded by

an improved definition of the operational

requirements, an exploration of the various main

options involved, a justification of the armament

systems envisaged by the relevant technicaloperational studies, an appreciation of the costeffectiveness report and the assurance that its

characteristics (requirements) are compatible

with the existing or planned systems within

which it will be included—“the Preparation

Stage.” Second, the development and industrialization operations are merged and the time

reduced. This merger is part of a concurrent

engineering process, whereby the product, the

range of production and the industrial means are

designed in parallel for optimal, interactive

results. Reduced delays allow the two merged

phases to take place at the latest when funding

can be considered practically assured. Disturbing and costly decisions that spread the costs

over time become more difficult. Thus requests

for modifications, as well as obsolescence

resulting from premature technical choices are

more easily avoided, and global negotiations for

contracts, that cover both development and

industrialization, and possibly even a significant

part of production can be made, so that industry

can also optimize organization and reduce costs.

On the other hand, reduced delays impose

greater care during the preceding phases of

feasibility and choice validation, to limit technical and financial risks. They can also induce

uneven use of engineering and design capacity

in industry by concentrating the most intense

development activities over short periods.

Industry must adapt to this situation with structural and economic solutions similar to other

sectors that also have to live with long renewal

cycles for their products. It is only under these

conditions that the all-important factor of lower

costs that result from reduced development

delays can be introduced.

Thus the procedure breaks down into four stages

(see Figure 7): Preparation; Design (Feasibility

and Definition), Realization (Development/

Production), and Utilization Stage.

The Preparation Stage

The “Thirty-year Prospective Plan” (see Figure

8) calls for identifying predictable needs in new

armaments programs. This plan is a “top down”

approach to providing recommendations on

thrusts for the research and technology programs

of the Ministry of Defense. In the Preparation

Stage operational needs are first defined: available resources for the program are assessed; the

various solutions are examined by looking at all

the possible responses, from renovating or updating existing materials, to the development of

new equipment, to purchasing off the shelf. At

this stage preliminary operation, technical and

financial studies are made; research and development programs are launched, in advance of

the new technologies that would be needed. Cost

Figure 7. A New Acquisition Process

Phases

Stages Development

Industrialization

Production

Realization Utilization

Feasability Definition

Preparation

Design
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assessment models are used to obtain preliminary figures and realize the first cost-effectiveness

studies.

At the end of the preparation stage the outlines

of the operational requirements are refined. The

major technical options that have been retained

are defined, the resources necessary for the program are determined, preliminary cost objectives are set. Acquisition principles are sketched

out, notably the choice of one or more industrial partners, possibly bidding in competition

for the contract at a later date. A preliminary

risk evaluation is made, and possibilities for

cooperation and export are examined.

The Design Stage

(Feasibility and Definition Phases)

At this point the decision will be taken, based

on the above elements, to begin the Feasibility

and Definition Phases. A program is launched

with the start of the Feasibility Phase. This

results from a decision by the Minister of

Defense, upon proposal by the Permanent

Executive Committee (PEC) whose membership

includes the Armaments Secretary General, the

piloting (military service) chief of staff, with

the recommendation of the Armed Forces Chief

of Staff and Secretary General for Administration. These members of the PEC will have

examined the feasibility file containing the results

of the preparation stage. If the decision to go

ahead, taken jointly by the DGA and the general staff involved, is made, the program director

and the program officer are appointed, and the

interdisciplinary program management and the

integrated program team are gradually formed.

At this stage the essential part of the work is

related to cost, since about 80 percent of the costs

for the equipment will be determined during this

phase, while the 20 percent remaining costs will

serve to adjust the product during the development/industrialization stage. The members of

industry associated with this work will be able

to contribute proposals with their own knowledge of the thresholds where performance

requirements would impose the use of more

sophisticated technologies or more complex

designs would drive cost increases. At the same

time, work proceeds to validate the new

technologies to be used.

The design stage culminates with a proposal for

optimized use and performance of the

Figure 8. The 30-Year Prospective Plan

Recommendations

Threat Evolution

Operational Capacities and Concepts

Strengths, Weaknesses

Consistency Actions

Superiority Factors

New Systems to Prepare

2000 2010 2020 2030
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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equipment, which could include changes from

the original functions of the item, or of the

established cost objective. The operational and

technical specifications are determined. The

industrial partners are chosen, whenever possible after competitive bidding and their

agreement to the objectives of the program are

obtained.

The Realization (Development/

Industrialization and Production) Stage

The next decision to take is whether or not to

continue the program and begin the development/industrialization stage. The commitments

here are more formal since the development

phase constitutes a significant commitment of

government resources and commitment to the

industrial partners who were selected in

accordance with the defined cost objectives.

Based on a technical development plan, negotiated with industry, regarding the various functions or characteristics of the product, this stage

is marked by periodic reviews of projects,

formalized to validate specified criteria for

performances, quality levels, reliability and

maintainability. Schedules for development and

validation procedures are regularly checked with

external references whenever possible, so as to

benefit from any new solutions which might

shorten the time. The nature, sequencing, content and duration of development tests performed, first by industry and then by the DGA,

as well as by the general staffs, are defined in

such a way as to avoid any redundancy. Very

rigorous procedures for managing these points

are introduced at the very start of the development/industrialization stage to ensure the

qualification of the product.

If not provided for in the original development

contract, a new contract for production is

launched to fill several years of orders. Thus firm

commitment from the government is necessary

for the contracted companies to organize and

invest in production at lower cost.

Utilization Stage

The primary purpose and ultimate justification

of conducting armaments programs is the operational use of the systems. Thus the Utilization Stage cannot be regarded solely as just

another stage in a program, it is rather the stage

where the users can finally, assess the quality of

the products.

The Utilization Stage begins when the chief of

staff (Army and Air Force) pronounces the

“Launching of Operational Service (Mise en

Service Opérationnel – MSO) or the Admission

to Active Service (ASA), for naval vessels. To

achieve these certifications a sufficient number

of systems must have been produced, accepted

by the DGA, as a result of successful trails and

that there is sufficient operational and maintenance equipment and trained personnel. (If the

support equipment has not been supplied the

decision to put into service can still be taken on

condition that the DGA ensures, maintenance,

or has it ensured, until the general staff can

progressively take over as means are made

available.)

The DGA provides the general staffs with the

systems and services necessary to attain the system objectives throughout the Utilization Stage

stage. In liaison with the general staffs, the DGA

manages the configuration of the system and

prepares the necessary modifications to the

equipment. It is kept informed by the general

staffs of the system’s behavior in view of

possible corrective measures.

Utilization, security and availability parameters

of the systems are to be examined together with

the implementation of the support, in accordance

with the concepts that were defined when the

equipment or system was acquired. As industrial
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technology advances, the system is continually

assessed for technological updating. The

military’s feedback during the Utilization Stage

provides information on the level of support

material needed. Systems engineering by the

DGA is a continual part of this phase. These

measures will often result in engineering

changes to the equipment over its life cycle.

The Utilization Stage ends when the General

Staffs decide to retire the system from service.

A Prospective Approach and

the Coherence of the Military

Instruments and Tools

A “prospective approach,” a forward look, permits the identification of “Systems of Forces,”

whose effectiveness is mutually linked to the

coherence of the whole. The requirements of

the Services, expressed by their general staffs,

originate from the simple necessity of renewing

systems whose obsolescence is predictable and

from adaptations necessitated by changing

threats and ways of using the armed forces.

These requirements are expressed within a

framework of overall, medium and short-term

plans and programs and are based, over the long

term, on analyses of possible future scenarios.

This entire process is called the prospective

approach. It is at the heart of prospective technological planning a major means of directing

upstream studies1

, operational and technicaloperational-type studies.

Coherence

The Joint Armed Forces Chief of Staff (Chef

d’Etat-Major des Armées—CEMA), the Services General Staffs (Army, Navy, Air Force,

Gendarmerie) and the DGA are each responsible for the overall coherence of the military

arm. Coherence of the military arm means avoiding duplication of effort and increasing the

synergy of effective warfighting. Coherence

must flow throughout all aspects of the military

arm, from operations, to organic, to schedule

and funding, technology and finally global

coherence. Coherence must be constructed with

the following in mind: operational aspects must

respond to doctrinal imperatives, in terms of

capacities dedicated to a main final purpose;

organic aspects condition the capacity, to use

the organization, training and human management that implement the armaments systems;

technical aspects refer to equipment and thus to

the technology that defines it, as well as to the

industrial tools that allow it to be realized.

The purpose of coherence among the Services

and the allies is to orient the “Systems of Forces”

at the source in order to include them in the joint

Army and joint allied environment of future

engagements and have them respond to the objectives of defense policy. These objectives are

converted into “missions of force employment.”

The CEMA is responsible for this coherence.

Operational coherence implies not only complementary systems but also the five components

of a “System of Forces,” namely doctrine, manpower, equipment, organization and training.

The CEMA and the Services General Staffs

(EMM for NAVY; EMAT for ARMY; EMAA

for Air Force; DGGN for Gendarmerie, see

Glossary) are each responsible for operational

coherence. Organic coherence allows expressed

needs to be fulfilled in terms of the employment

of forces and the specific roles of each branch

of the armed forces. The CEMA is responsible

for organic coherence.

Coherence of timetable and funding primarily

concerns the running of armaments programs

and allows the acquisition and use of equipment

to be coordinated through the management of

programs. Each Services Chief of Staff and

the CEMA share this responsibility, with the

cooperation of the DGA. Technical coherence
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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specifically concerns the acquisition process and

is meant to avoid technological duplication and

favor technical synergy among weapons systems

within the same “System of Forces” and also

among all the “System of Forces.”

The DGA, jointly with the CEMA, is responsible

for the global coherence.

Concerning equipment, the Architecture of

Systems of Forces (to be discussed later) must

allow the Armed Forces to optimize the availability of the best possible weapons systems with

regard to available technology resources. This

involves close coordination between the General

Staffs and their representative—the Officer of

Operational Coherence (OCO) and the Corresponding Coherence Service Officers of the

General Staff (OCEM) and the DGA.

The Architecture of Systems of Forces ensures

overall coherence by means of an analytical grid

that breaks military weaponry into eight systems,

based on the logic of major operational procedures, aiming at clearly identified military

objectives and allowing major armament programs to be classified. However, some programs

with major contributing operational capacities,

related to different systems of forces, can be

found in more than one system.

“System of Forces”

Armaments programs are associated within

“Systems of Forces.” This instruction defines the

roles of the systems architects (ASF), appointed

by the DGA, the roles of the OCOs and the

OCEMs, appointed by the general staffs, and

the roles and attributions of the Systems of

Forces Architecture Committee.

This organization aims at improving the preparation of the programs and at ensuring their

coherence. Notably it is meant to optimize the

overall functions to be realized, ensure the relative

phasing of the programs involved and prepare

coherently any future changes in the systems.

The “eight systems” are: Deterrence (DIS); Command, Conduct, Communication, Information

(C3R); Strategic and Tactical Mobility (PROJ);

Long Range Strike Capacity (PROF); Land and

Air Control (TER); Sea and Air Control (MER);

Air and Space Control (AIR); Preparation and

Maintenance of Operational Capacity (PREP).

An Architect of System of Forces (ASF) from

the DGA is assigned to each “System of Forces.”

The mission of the ASF can be summarized

as follows: contribute to the drafting of a

prospective plan to determine the overall framework of their action; conduct the work of the

preparation stages and pilot the Feasibility Phase

of new programs, either alone for programs

relevant to their “System of Forces,” or jointly

in other cases, with one or more Operational

Coherence Officers (OCO); ensure technical

coherence and contribute to the coherence of

the timetable and funding within their “System

of Forces;” ensure technical coherence among

the systems of forces; propose the necessary

research for contributing equipment to their

“System of Forces.”

The OCO and OCEM

The OCO is a member of the Joint Armed Forces

General Staff (EMA). There are Corresponding

Coherence Services Officers of the General

Staffs of each Service (OCEM for Navy, Air

Force, Army and Gendarmerie, see Glossary)

who are responsible for everything within their

jurisdiction regarding the definition and

monitoring of their “Systems of Forces.”

An OCO is appointed for each “System of

Forces.” The EMA appoints them for joint services “Systems of Forces”—Deterrence, C3R2

,

Strategic and Tactical Mobility, Deep Strike and

Readiness. Each Service’s general staff for
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service specific systems—land, sea and air. For

each “System of Forces” an officer is appointed

OCEM within each Services general staff. In

the EMA three OCEM’s are appointed for the

systems specific to each service (see Figure 9).

The OCO’s and the OCEM’s are key actors in a

cooperative enterprise. As such they are in constant touch with each other in the accomplishment of their role, and must constantly anticipate different points of view in order to keep

the process flowing smoothly. They must ensure

overall coherence of military weaponry within

and between the “System of Forces.” The former

is the collective work of all the OCO’s in cooperation with the OCEM’s, and, whenever

needed, with the ASF’s. The latter is the goal of

the OCO and OCEM in charge of the “System

of Forces,” in liaison with the ASF involved. The

priority for the OCO’s and the OCEM’s is to

prepare for the future, where the range of possibilities is the widest. But their activities extend

to all the components of the “Systems of Forces,”

and they also rely on feedback from the systems

once in operational use.

The mission of the OCO is to be the counterpart

of the Architect of the System of Forces.7

 As

such the OCO:

• contributes to the “prospective approach” by:

participating in the analysis of the politicostrategic and socio-economic conditions, as

well as the technological possibilities; drafting proposals to the general staffs regarding

concepts, doctrine and capacity; participating in defining the conditions for coherence

of the weapons systems; proposing research

projects;

• jointly with the ASF, for possible new programs, helps draft the general staff’s objectives which triggers the Preparation Stage.

Drafts the Exploratory Military Characteristics File (FCME) and the Feasibility File

(DF), which trigger the Feasibility Phase and

oversees the work of the Feasibility Phase,

which is conducted under the responsibility

of the program director and program officer;

and

Figure 9. To Improve Inter-Programs Consistency—The Force Systems

Deterrence ASF OCO OCEM OCEM OCEM

C3I ASF OCO OCEM OCEM OCEM

Mobility ASF OCO OCEM OCEM OCEM

Deep strike ASF OCO OCEM OCEM OCEM

Readiness ASF OCO OCEM OCEM OCEM

Land ASF OCEM OCO

Air ASF OCEM OCO

Sea ASF OCEM OCO

DGA EMA EMAT EMAA EMM

System

of

Forces
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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• jointly with the ASF, monitors the timetable

and funding within his “System of Forces”

and has the authority to inform the Chiefs of

Staff of changes he feels are necessary to

attain program objectives.

The mission of the OCEM is to take charge of

those tasks that are entrusted to his Service chief

of staff. The mission of OCO’s will differ

according to whether they belong to the EMA

or the Services’ General Staffs. The OCEM’s of

the services general staffs cooperate closely with

the OCO’s of the EMA. The OCEM’s of the

EMA ensure permanent liaison between the

Services and the EMA and collectively monitor

the coherence of the “Systems of Forces” among

the Services and with the allies. Within their field

of responsibility, and as participants in all the

work accomplished by the OCO’s and ASF’s,

the OCEM’s of the Services staffs and EMA

contribute specifically to:

• the development of the prospective approach;

• the work accomplished in view of respecting

the overall coherence of the systems of forces

that concern them;

• the definition of the systems of forces;

• the preparation of the programs and in particular the development of the general staff

objectives;

• the drafting of the Exploratory Military Characteristics File (FCME) and the Feasibility

File;

• the supervision of the Feasibility Phase of the

programs; and

• the identification of the necessary research.

In summary, this section of the chapter has provided a look at the “prospective approach”—

long range planning, the coherence of military

instruments and tools—the orderly and continuous relationship between various elements, the

“Systems of Forces”—mission areas, and the

three key players—ASF, OCO and the OCEM,

that are part of the early planning for the

development of weapon systems.
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Chapter 6

THE PROCUREMENT SYSTEM

In the last two years the DGA has launched a

“procurement reform” effort. The procurement

organization has been revised with creation of a

new position, the Procurement Executive, who

will have overall responsibility for procurement

and negotiating policy, national regulations, law

affairs and settlements of disputes, price and cost

analysis and quality assurance (see Figure 10).

As part of this effort, individuals who had perThe DGA spent over a 64.5 billion francs (>9.84

billion Euro) in Fiscal Year 1998. The products

and services they buy cover a range of items to

include research and development (R&D), basic

and detailed design, modeling, testing, production, support in-service and other items. The

number of supplier for military equipment is low,

yet there is a need for advanced technology to

meet future military needs.

Figure 10. DGA Procurement Reform—Procurement Organization

Procurement

Departments

Procurement

Executive

Procurement

Policy

Negotiating

Techniques

Contracts

Follow-ups

Taxes, National

Regulation

International and

Commercial Law

Settlement of

Disputes

DGA Internal

Contracts

Cost Analysis

Methods

Price Databases

Price Evaluation

and Prediction

Supplier’s Efficiency

Analysis

Supplier’s Cost

Breakdown Analysis

Procurement and

Negotiating Policy

National Regulation,

Law Affairs

and Settlement

of Disputes

Price and

Cost Analysis

Organization,

Quality and Human

Resources

Management

Quality and

Organization

Human Resources

Skill and Training

Management

Relation with

Political Level
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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formed as procurement specialist on an ad hoc

basis will now become full time procurement

specialists. They will bring their specialty

knowledge to the “program integrated team.”

Competition is the general rule at the prime

contractor level, each time it is reasonable.

Competition shall be maintained as long as

economical profitable at least up to achieving a

firm long-term commitment on price. When

competition is not possible at the prime level, it

shall be ensured at the sub-contractor’s level.

To ensure that competition at the contract level

is fair for subcontractors and small business,

the DGA working with small business experts,

has issued rules for fair competition. Acquisition plans will be required for each important

contract and the competition process will be

designed to ensure transparency at the

contracting level.

The general policy for pricing contracts is that

for a contract with a duration of less than three

years then prices shall be firm. If a contract

exceeds three years the following options apply:

• for contracts with increased risk such as some

research and development efforts, firm prices

will be used but with a price escalation formula based on standard escalation rates for

engineering and manufacturing activities;

• for contract with greater risks the DGA will

use a cost escalation formula with a threshold. The role of the prime contractor will

change. He shall be made fully responsible

for overall system characteristics (technical,

price, support in-service). As part of his

responsibility for “global system performance” he will be required to make a contractual commitment for design, industrialization and the first set of production articles.

Also included will be initial logistics support.

The prime contractor will also be challenged

to look for alternative solutions for cost

reduction.

A variety of new policies and strategies will be

piloted. Some examples are:

• the use of procurement plans for larger

contracts to improve planning;

• the issuance of global (multi-year) procurement contracts which will cover several years

for the design, production and support of a

system;

• the harmonization of several program on one

contact which will reduce the number of

contracts; and

• the use of pilot contracts to demonstrate the

acceptability of each of the new approaches.

The basis for contracting in France is based upon

the written judicial base in the traditions of the

old Roman Law and the Napoleonic Code. The

civil law is codified, unlike the more common

practice in the U.S. and the United Kingdom,

of judicially-created law. Thus the regulations

governing acquisition are relatively few in

numbers and not subject to a great deal of

interpretation.
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Chapter 7

DEFENSE ACQUISITION PROGRAMS –

STRUCTURE AND ORGANIZATION

the design stage, and launch the realization

stage only after these choices have been

validated.

d) Reduce Realization times to avoid obsolete

technical choices and make it possible to

negotiate global contracts, i.e., contracts covering both development and industrialization, and, if possible, a significant part of

production and even of support, to optimize

industrial organization and thus reduce costs.

e) Allow for better oversight and possible reorientation or partial or total review of the program

while it is being undertaken, by formally

introducing decision pauses along the way.

The annual list of armaments programs, which

can be nuclear, space, conventional or other, is

prepared by the Permanent Executive Committee looking at the following criteria: military

interest, technical innovation, financial burden,

industrial fallout, and international aspects. The

list is then submitted by the DGA, after endorsement by the CEMA and the SGA for the

approval of the Minister of Defense. For each

armament program the DGA appoints a service

to conduct it. When a program concerns more

than one Service, 9 the CEMA appoints one, or

exceptionally several chiefs of staff to pilot it,

including the Service Chief of Staff. He may

also assign the coordination to a staff division.

Each armaments program is meant to satisfy a

requirement, first expressed in terms of a staff

objective, then in a military characteristics sheet.

Beforehand, we have explained the political

purpose of defense acquisition. In the following part we cover the structure and organization

of defense acquisition. As mentioned earlier the

life of an armaments acquisition program is

divided into several stages and phases characterized by the types of work involved. They are:

Preparation Stage, Design Stage, (Feasibility

Phase and Definition Phase), Realization

Stage (Development/Industrialization Phase,

Production Phase), and Utilization Stage.

There are five major principles or orientations

that governed this structure: They are:

a) Prior to the commitment to the Feasibility

Phase, a preparation stage will outline

operational requirements, envisage the

various possible solutions that will satisfy

the requirements, begin cost/efficiency ratio

studies for solutions extending over the life

of the product and ensure the coherence of

the program’s characteristics with the system

concerned.

b) From the beginning optimizing the overall

“cost of possession 3

,” especially by means

of an integrated logistics support methodology, which considers not only the designing

and production of the main system but

simultaneously the support system.

c) Limit technical and economic risks by making sure the feasibility of the choices involving characteristics and techniques have been

studied with sufficient care and time during
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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To obtain the successful completion of an

armaments program in terms of performance,

calendar and cost, all the implications of its

requirements must be considered, as well as all

the political, industrial, economic, financial,

international, logistic and other constraints

which have an effect on its accomplishment.

Operational requirements can change in the

course of the program. The impact of these

changes on costs, calendar and performances

must be analyzed before any decisions are made

to take this into account.

Its realization must benefit from the assistance

of the competent Services, 4

 especially for operational and technical-operational studies, tests,

and the preparation of support and training.

Major Programs

During all or a part of their implementation some

programs are classified ‘major’ in view of their

importance. They undergo special decision procedures and their classification is mentioned in

the list of armaments programs.

Armament Programs and

Systems of Forces

Armaments programs are associated within

“Systems of Forces.” An instruction to this effect

is signed jointly by the DGA and the CEMA.

This instruction defines the roles of each of the

key staff players—the ASF, appointed by the

DGA, the OCO and the OCEM, appointed by

the general staffs, and the roles and attributions

of the Systems of Forces Architecture Committee (CASF).

This organization aims at improving the preparation of the programs and at ensuring their

coherence. Notably, it is meant to optimize the

overall functions, ensure the relative phasing of

the programs involved and coherently prepare

any future changes in the systems.

Overall Programs

If several simultaneous or successive armaments

programs can contribute to satisfying the same

complex military requirement they may be combined into one program. If justified by the importance of the operation, an infrastructure program can be created to accompany it . In this

case the organization set up to help define and

harmonize the military requirements results from

special orders defining its composition, its role

and its ambitions, signed either by the Minister

of Defense or by the CEMA. The list of the overall programs is part of the armaments program

list.
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Chapter 8

ACQUISITION PROGRAM

MANAGEMENT

that are not specific to one service, and OCEM’s

are appointed from a general staff for systems

specific to one service.

When a general staff has identified an objective

a “System of Forces” is chosen 5 within which

the program will be included to satisfy the

operational requirement. This “System of

Forces” is the responsibility of a general staff,

either the EMA or a general staff, which pilots

it.6

The ASF and OCO of the “System of Forces”

that was chosen and the ASF and OCO of the

service related system or systems are appointed

by CASF to conduct the work of the preparation stage, with the support of the competent

organizations within the armed forces and the

Architect of System of Forces (ASF),

Operational Coherence Officer (OCO),

Corresponding Coherence Services

Officer (OCEM)

As discussed above, there are three key individuals involved early in the management of

acquisition programs. They are the ASF, the

OCO and the OCEM. The ASF are DGA

“Armament Engineers” at the senior colonel or

one-star level, with responsibility for oversight

of a variety of programs through the preparation stage (see Figure 11) for depiction of role

by stage). OCO’s are appointed either by the

Services Chief of Staff for joint armed forces

appointments, or by CEMA for specific military service. OCEM’s are appointed from each

Services general staffs in the case of systems

Figure 11. The Acquisition Process

Development

Industrialization

Production

Realization Stage Utilization Stage

Feasability Definition

Preparation

Design Stage

Integrated Team – DGA/Service Staff/Industry

Architect of

Force Systems Program Director with

the Program Officer

Service In

Use

The 30-Year Forecast Plan
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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DGA. They supervise the Feasibility Phase of

the new program,14 which is conducted by the

integrated program team. From the Definition

Phase onward their role is to ensure maintenance

of the coherence of the program within the

“System of Forces” involved15, in terms of

operation, technology, scheduling and funding.

Throughout the life cycle of the programs, the

ASF and OCO involved with it can propose

changes they esteem necessary for obtaining the

objectives of the integrated program team. The

OCEM’s participate in all the work accomplished by the ASF and the OCO of the “System

of Forces.”

The key role in the conduct of an armaments

program reverts to the Program Director and

Program Officer as the program enters into

the Definition Phase (see Figure 11). They are

entirely responsible for reaching the objectives

that have been fixed; they have all the necessary competence, means, methods and tools

adapted for successful program execution.

Within their own organizations each of the above

is charged by the superiors that appointed them,

with ensuring the coordination and coherence

of the tasks that contribute to the progress of

the program. For this purpose, they are endowed

with decision-making authority, without otherwise changing previously established chains of

command.

For armaments programs the DGA appoints

the Program Director from within the department that is conducting the program, upon proposal of the director of that department.

The Piloting Chief of Staff appoints the Program Officer from his Services general staff. If

the program concerns more than one general

staff, i.e., when more than one participates in

funding the program or cooperates in expressing operational requirements, the piloting staff

is appointed by the CEMA, and the staff involved

can appoint officers to assist with the program.

In case the CEMA is piloting the program he

can ask one of the general staffs to appoint the

program officer. When the armament program

involves the realization, i.e., the building of

infrastructures, the department concerned with

its realization appoints a representatives.

These appointments take place at the beginning

of the Feasibility Phase. The names of the program officers are communicated at the beginning of the year by the general staffs to the DGA,

which distributes a yearly list indicating the

names of the directors and program officers of

each program. The directors and the program

officers choose the members of the integrated

program team, calling in whatever experts they

consider necessary for the tasks that are to be

accomplished. The directors of the industrial

projects join the teams whenever necessary. As

soon as it is appointed and throughout the duration of a program, a team is in charge of ensuring the internal coherence of the operational,

technological, financial and industrial aspects

of a program.

During the Feasibility Phase the appropriate ASF

and OCO of the “Systems of Forces” supervise

the integrated program teams.

The integrated program team is concerned at all

times with optimizing its cost/efficiency ratio

by reducing costs without altering its character

or compromising its objectives. For this purpose

it formally creates a cost reduction file with

appropriate input and output. This file is a catalog of all the measures that the team proposes

or intends to take, within the limits of its

responsibilities, to reduce the overall cost of a

program. The file is not static; new measures

appear, old ones are eliminated as soon as they

have been taken or if they turn out to be unrealizable. The program is managed on a cost

objective basis, continually aiming at reduced

costs. The cost objective of a program is
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determined by the DGA at the design stage, in

agreement with the EMA.

Composite Programs

In case of composite programs, the Delegate

General for Armament and the Joint Chiefs of

Staff 7 appoint a composite program director and

a composite program officer.

For some armament programs with significant

complexity and importance a steering committee may be formed to oversee program management. Their establishment, chairmanship, composition, role and attributions are contained in

specific instructions signed by the Minister of

Defense or jointly by the Delegate General for

Armaments and the piloting chief of staff or their

representatives. The CEMA and the SGA are

represented in these committees. A representative of the Armed Forces inspector general

attends the steering committee meetings.

To coordinate programs that constitute a composite program, a steering committee, chaired

by the Delegate General for Armaments or his

representative, is generally created, defined by

specific instructions as to its composition, role

and attributions, and signed by the Minister of

Defense.

A piloting structure can also be created according to service needs8

 at the beginning of the

design stage. The service director of the leading

program and the piloting chief of staff or their

representatives are the joint chairmen. The mission of the piloting committee is to provide a

decision forum for the management of the

program.

Permanent Executive Committee

The Permanent Executive Committee is the

senior committee responsible for preparing and

publishing the list of armaments programs. It

also formulates an opinion on the Feasibility

Phase files, the orientation files, the launching

files, the follow-up files and the final documents

of each program as it moves from one phase to

the next. It is composed of the following members: a representative of the armaments delegate

general, who chairs the committee; a representative of the Secretary General for Administration, vice-chairman; a representative of the

Armed Force Chief of Staff; a representative of

the Piloting Chief of Staff, and a representative

of each of the chiefs of staff or financing entities

involved in the program. The Services Supervisory General also participates. The integrated

program team, which is present during the

sessions when documents concerning the

program are examined, answers the questions

of the committee members.

The ASF and OCO of the “System of Forces”

concerned are present for the examination of the

feasibility files. The chairman of the PEC can

also ask for their participation when the orientation files, the launching files or the follow-up

files are being examined.

Acquisition Management

A program is launched with the start of the

Design Stage, Feasibility Phase. This results

from a decision by the Minister of Defense, upon

proposal by the Permanent Executive Committee, after examination and approval of the

feasibility file.

In general, a program will move from the

Feasibility Phase through the Definition phase,

and then the Realization Stage which includes

the Development/Industrialization, and Production Phases (when the latter two have not

been dissociated), if it received approval from

the PEC. However, the Minister of Defense

takes the decision when a major program is

concerned, or when the Permanent Executive

Committee has not pronounced a recommendation
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-46

on the “file” or when the Services have maintained

reservations.

The fact that a program has been listed or a phase

launched does not at all imply that it will be

pursued to the end. Any program can be discontinued at the end of its Feasibility or Definition

Phase, or even afterwards, especially if costs are

excessive or it is revealed to be inappropriate to

the requirements of the armed forces. In matters of costs or delays the DGA has this responsibility. Estimations are given for the later phases

but they are not definitive.

Program Authorizations

The various departments of the Ministry are

responsible for budgetary decisions and ensure

the necessary financing of programs at the

appropriate moments. The decision to launch a

new phase frees the corresponding funding for

the current fiscal year.9

 For the following years,

expenditures authorization for the launched phase10

is received under the following circumstances:

The Design Stage – at the end of the annual

review (with certain exceptions or when a

decision to the contrary has been taken);

The Realization Stage – by approval of the

documents for each phase.

For approval purposes the documents are

required to contain cost estimation and financial information. However, before taking the

decision to launch the production phase of a

program, it may be advisable to authorize some

funding over a longer term. Special authorization procedures applicable to investment funding not covered by the “present instruction”11

are necessary.

The Preparation Stage

Foreseeable needs by the armed services for new

armaments programs are mainly based on prospective planning. (See Figure 12.)

Figure 12. A New Acquisition Process

Phases

Stages Development

Industrialization

Production

Realization Utilization

Feasability Definition

Preparation

Design

Feasibility

Document

Orientation

Document

Realization

Launching

Document

Production

Launching

Document

Force Staff

Initial

Objective
Part 1 France

1-47

The preparation stage for a program can begin

when a branch of the armed services has

expressed its needs. The CASF (Architects of

Systems of Forces Council) formulates an

opinion on beginning the preparation stage,

which is then decided upon by the chief of staff

involved.

At this stage, to complement the research and

studies that have already been made, preliminary operational or technical-operational studies

are made to determine the outlines of a program

and identify risks, preliminary functional

analyses of requirements are realized and

research on the new technologies that are needed

for such a program are intensified or reoriented.

Cost estimate and effectiveness models are used

to obtain preliminary figures.

The results of the preparation stage are included

in the feasibility file, which contains two

coherent and complementary parts to support a

conclusion to proceed to the next stage.

1) Under the responsibility of the Joint Armed

Forces General Staff, in cooperation with the

operational design officers a balance sheet

of operational and technical-operational

studies is made, spelling out the military

requirements and providing a preliminary

list of priorities for the operational characteristics that are required. This corresponds

to the drafting of the Exploratory Military

Characteristics File.

2) Under the responsibility of the DGA, a synthesis of the technical and technological

studies is presented, the critical risks are

evaluated, including technical and technological ones, as are the solutions envisaged

to master them; physical and functional

architectures are proposed, a preliminary

cost framework is given as well as a timetable for the Realization Stage and an

estimation of utilization costs. All useful data

for the execution of the Feasibility Phase are

provided, notably the interfaces to be

envisaged with other programs, what is to

be undertaken to ensure coherence, the

rendezvous to take with connected programs,

industrial and international aspects, essential milestones and a preliminary funding

schedule for the ensuing phases, to allow for

long term financial feasibility planning in

view of reasonably foreseeable financial

resources.

The conclusion, drafted jointly by the Joint

Armed Force General Staff, the ASF and the

operational design officers, formulates proposals

for beginning the Feasibility Phase of the

program.

The Architect and the operational design officer

involved presents the Feasibility File to the

Architects of Systems of Forces Council

(CASF). In view of this file, validated by the

architecture committee and examined by the

PEC, the Minister of Defense decides to take

the program from the Feasibility Phase to the

Design Stage, i.e., to launch the program.

The Design Stage

Before beginning the actual realization of a

program it is necessary, within the framework

of the objectives established during the preparation stage, to: determine the military needs;

review, define and examine possible solutions

(off-the-shelf purchase, in France or abroad,

manufacture under license, international cooperation or purely national realization); obtain a

sufficiently reliable and precise estimation of

costs and timetable for the realization of the

program according to the various scenarios;

collect maximum information to estimate means

and costs induced by acquisition of the system—

effect on the environment, requirements in

infrastructure, personnel, spare parts, fuel, and

other items.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Since the choices and decisions made before the

realization stage determine the program as a

whole, the DGA and the Services chiefs of staff

must take great care with this work and allow

enough means and time to accomplish it

thoroughly. The Design Stage has two Phases—

Feasibility and Definition.

The Feasibility Phase

This phase is focused on the search for possible

answers and an assessment as to the degree of

satisfaction that can brought to the military

requirements. The latter, still expressed in

general terms in the exploratory military

characteristics file will be refined during this

phase.

The results of the Feasibility Phase are combined into an Orientation File, composed of two

coherent and complementary parts, supported

by the general conclusion.

1) Under the responsibility of the Joint Armed

Force General Staff, the military requirement is explained in sufficient detail,

although still provisionally12. It corresponds

to the contents of the Provisional Military

Characteristics File.

2) Under the responsibility of the DGA, the

range of possible responses and their implications are described—degree of fulfillment

of the requirements, performances, timetable, costs13, funding calendar for the realization stage, industrial and international

aspects. Notably, all useful information is

furnished on any acquisition from foreign

sources that could fill a part or all of the

requirements. The difficulties and risks of

each possible solution, as well as the ways

of mastering them are covered.

The conclusion, drafted jointly by the DGA and

the Joint Armed Forces General Staff, compares

all these responses and formulates proposals on

the choice of the one(s) that will be further

investigated during the Definition Phase, including the possible assessment of foreign products.

It also proposes what procedures to follow

during the following phase14.

The Orientation File summarizes the results at

this stage in the iterative search for the best

compromise between characteristics and costs,

notably through value analysis and functional

analysis. It indicates the comments on these

results by DGA and Joint Armed Force General

Staff. At this stage of the draft of the military

characteristics file, the Joint Armed Forces

General Staff establishes a hierarchy of the

operational characteristics and defines the limits

of performance, calendar and costs within which

the desired requirements could undergo changes.

The competent authority, after having examined

the Orientation File, assembled by the integrated

program team, validated by the OCO of the

“System of Forces” involved, presented by the

leading department of the program for endorsement by the piloting headquarters15, will provide

approval to initiate the Definition Phase.

The Definition Phase

During this phase further definition of the system

takes place as well as further refining the military requirements, the support, environmental

issues, training, technical specifications, schedules, costs and the industrial conditions for

entering the Realization Stage. It is during this

phase the program Director, program offices and

the integrated program team will provide the

information necessary to prepare the Realization

Launching Document for the approval of the

PEC. The Definition phase concludes with a file

for launching the Realization Stage or a file for

launching the Development/Industrialization

phase.
Part 1 France

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The Realization Stage

The Realization Stage can begin when the DGA,

based on the solutions that have been chosen, is

satisfied that the military characteristics will be

met and that the required calendar, development

costs, industrialization and production criteria

will be fulfilled.

If this commitment to the production phase cannot be made at the start of the Realization Stage,

or if it can be made only for a part of that phase—

for example, for the first mass production

series—in principle only the initiation of the

development/industrialization phase is proposed.

Nevertheless the DGA must provide sufficiently

firm projections of the conditions, as well as the

costs involved, in the production phase.

At this stage the materials and their support

systems are designed in detail, developed,

evaluated, quantified, tested and produced.

The two phases of this stage, the development/

industrialization and production phase, can overlap. The development/industrialization phase is

where the system and its support system are

designed in detail, developed, evaluated, qualified and tested.16 The means for industrial

production are also defined and set up. The

production phase includes all the necessary

operations for future implementation and use—

production, training and support capacity, etc.

If the DGA is in a position to commit itself to

the overall performance, the calendar for

delivery, the production costs and can furnish a

reliable assessment of the overall cost of possession at the end of the Definition phase, the

Realization Stage can be launched in its entirety,

to avoid costs and delays.

This is especially the case for small quantities

of products or when programs consist essentially

of acquiring existing material or when overall

contracts covering both development and industrialization and a significant part of production

can be negotiated. If these elements are not available at the end of the Definition phase17 launching the production phase is not proposed until the

end of the development/industrialization phase.

Under the responsibility of the Services general

staff is the military requirement. Under the

responsibility of the DGA the solution(s) investigated during the Definition Phase are compared. All the necessary the technical, industrial,

logistic, international and financial date are

assembled. The iterative search process for the

best compromise between characteristics and

costs is reviewed, reached by functional analysis

and by objective cost concept.

The conclusion, drafted jointly by the DGA and

the Joint Armed Force General Staff, proposes

a choice and justifies the conformity of that

choice with the military requirement.

After having examined the launching-of-realization, or launching-of-development/industrialization file, assembled by the integrated program

team, endorsed by the piloting general staff and

examined by the PEC, the competent authority initiates the full realization stage, or only

approves starting the development/industrialization phase. This file then serves as a reference for oversight of the realization or

development/industrialization of the program

(performance, timetable and cost control).

The DGA, in liaison with the various Services

general staff and the SGA, examines annually18

the programs that are at the Design Stage. This

is when the ‘future program file’ is established,

composed of brief files (one per program19)

highlighting the programs.

The competent authority (Minister or DGA),

having examined the launching of production

file, assembled by the integrated program team,
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-50

presented by the leading department of the program for endorsement by the piloting chief of

staff and examination by the PEC, initiates the

production phase. This file assembles all the

operational, technical, logistic, industrial, international and financial data necessary for launching. It then serves as a reference for oversight of

production, notably concerning quality assurance,

value analysis, observance of calendar and cost

control.

During the Realization Stage the integrated

program team establishes a yearly ‘program

oversight document’ which reports on execution

and points to discrepancies between initial planning in the launching file and the present state

of the program. The leading department for the

program presents the oversight document for

endorsement by the piloting headquarters and

examination by the PEC before approval by the

appropriate authority.

During the Realization Stage, qualifications of

technical standards and means of production,

and, if required, of nuclear capacity, as well as

assessments and field tests necessary for operational use take place in accordance with existing

regulations.

The Realization Stage terminates with delivery,

to the Armed Forces headquarters in charge of

implementation, of the complete product, along

with the support system and training capacity.

In principle this date marks the end of the program, although some of the DGA’s activities

continue long afterwards.

The integrated program team, when the major

production risks have been lifted and the delivery

essentially made, or when the program has been

terminated drafts a document that ends the program. This document follows the same distribution and approval circuits as the oversight

documents, establishes a complete balance sheet

for the program and underscores the lessons to

be derived from it.

Utilization Stage

The stage of complete utilization formally begins

after the decision to ‘put into operational use.’

This decision formalizes the authorization for

operational use of the arms system after it has

been tested in the context of an operational

engagement module.

The Armed Forces headquarters involved and

the DGA can decide jointly to maintain a program team and continue total or partial application of the methods used to conduct the program

during the Utilization Stage20 to optimize the

technical management of the support materials.

Retirement from Service

The Utilization Stage ends with the decision by

the Services Chief of Staff to retire the material

from service.

SPECIFIC PROGRAM

CHARACTERISTICS

The procedures described above can be applied

to technology enhancement programs. This is

the case, for example, for files that have been

prepared in support of decisions and appointments made by a program director and for the

documents established with the purpose of overseeing a program.

Programs Conducted in a

Joint Ministerial Framework

The principles and rules described above can

also be applied to armament programs conducted

in a joint ministerial framework—except in particular cases where other procedures could be

defined by interministerial agreements.
Part 1 France

1-51

among the countries involved. Normally, an

executive committee draws up the principles

each program will operate under. The program

office, in particular the French service, will

operate under these protocols.

Programs in International Cooperation

For international cooperative programs, depending upon the circumstances of the program, an

ad hoc or permanent organization is set up
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Chapter 9

TESTS PROCESSING, ASSESSMENT

AND EXPERIMENTS

Kind of Tests

Technical Tests

Technical testing is mainly about:

• definition qualification;

• clearances; and

• quality monitoring.

Tests Under Responsibility of Industrial

Companies (in accordance with the DGA

agreements)

Tests at stake here concern manufacturing and

design, adjustment and also qualification (in

some cases). The Services General staffs support may be required and the DGA will design

tests to facilitate Services support.

Tests Under Responsibility of the DGA

Tests at stake here concern controls on definition qualification. They are designed to assure

the quality standard, the clearance and the contractual delivery of studies and equipment and

the control of operational features. Some tests

are imposed by regulations.

These tests may require Armed Forces support

in means and personal resources.

Testing may be accomplished at either the

centers of industrial companies or in the DGA

Equipment Tests

In the process of armament programs, tests are

needed to check if equipment meets the military requirements regarding technical and

military aspects. The coordination of tests is

handled by the integrated program team.

The integrated program team must enable:

• the project manager and the industrial

companies to perform tests on the equipment

as it matures. These tests will ensure at both

the subsystem and system level that the

equipment meets its technical requirements;

• the DGA, after considering tests results and

equipment compatibility with the technical

requirements, to pronounce the certification

of the equipment; and

• the Service general staff, after considering

equipment compatibility with military

requirements, to approve equipment for

operational use.

In order to minimize costs and delivery time,

the integrated program team tries to integrate

the tests performed by the DGA, the equipment

industrial companies and the Service General

Staff in such a manner as to benefit the others,

if possible. The use of calculation, simulation

and exploitation of existing databases are used

to provide cost effective methods of cutting test

costs.
Part 1 France

1-53

centers (test center, shooting field, labs...). (See

Figure 13 for test centers and other DGA facilities.)

During the development process, the technical

tests aim at ensuring that the system entirely

meets the technical specification. Also, these

tests help to define the edge, or limits, of the

system (or its operational conditions of use).

They all provide for qualifiction of the system

or equipment. The involved armed forces comonitored for opportunties in order to reduce

its own testing session. Some development testing could also include tests in a real operational

environment with personal and means provided

by the concerned armed force.

During the production process, the DGA is in

charge of the series equipment clearance tests,

although the concerned armed force will be involved. Even after passing its initial clearance

test the system can still be modified by the DGA

after examination of the first mass-produced

units.

Tests Under the Services Responsibility

Tests here concern operational evaluations and

experimentation and they take place in

accordance with the following process:

• evaluation testing takes place during the

design period; and

• experimentation testing is performed on the

first mass-produced units.

Figure 13. Locations of DGA Units

Cherbourg (DCN) Val de Reuil (DCE)

Vernon (DCE)

Brest (DCN-DSA-DCE)

Lorient (DCN-DCE)

Paris – DGA Headquarters

CHEAr

Bourges (DCE/DRH)

Nantes (DPM DOU)

Rennes (DCE)

Angers (DCE)

Châtellerault (DGO)

Ruelle (DCN)

Clermont-Ferrand (SMA)

Indret (DCN)

Rochefort (DRH)

Cazaux (DCE)

Bordeaux (SMA)

Gramat (DCE)

St Médard-en-Jalles Latresne (DRH)

(DCE)

Toulouse (DCE)

Odeillo (DCE)

Istres (DRH) Cuers (SMA)

Toulon

(DCN-DSA-DCE)

St Tropez (DCN) Marseille (DPM)

DCN – Directorate for Naval Construction

DCE – Directorate for Evaluation and Test Centers

DRH – Directorate for Human Resources

DSA – Directorate for Weapon Systems

SMA – Service for Aeronautical Maintenance

DPM – Directorate for Programs, Procurement Methods and QA

DGO – Directorate for Mangement and Organization
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-54

They enable the integrated program staff to test

equipment conformity to the military need

expressed in the technical characteristic file for

operational efficiency. These tests also enable

the staff to ensure the integration of the new

equipment in the ”System of Forces.” Operational tests are broad base in order to control all

the operational requirements (equipment use,

maintenance and instruction).The General Staff

accepts the new equipment on the basis of the

experimentation results.

Test Administration by

the Integrated Program Team

The program test administration is divided in

two stages: identification of the needs for testing,

and tests processing.

Test Preparation and

Administration of the Needs

 Concerning the administration of the needs, the

integrated program staff makes a general plan

for the program

tests. This plan is

taken in accord-ance

with the industrial

companies’ needs,

its own needs, the

evaluations

coming from

the General

Staff, and

with all

solutions

adopted

for test

processing and planning. This general plan is

used to reduce testing costs. It allows the general staff to emphasize on the main points of

evaluations stage. So the DGA can take these

requirements into account while preparing all

the means dedicated to testing.

The integrated program staff is responsible for

the conformity between the requirements of

the military characteristics standard and the technical need specification of the standard system.

The IPT also assures the general coordination

between all parts of the program (the industrial

partners, the DGA and the General Staffs) and

the appropriateness of the means required for

testing. The IPT has also to provide financial

means at the lowest cost if a new need occurs.

The testing optimization is generally the final

result of test processing all along the program

stage. It supposes the needs for testing have to

be defined as early as possible (at the latest in

the military characteristics standard file on test

evaluation and experimentation).

Tests Processing: Organization

The integrated program team or its representatives must establish a common testing program (PCE) which coordinates all tests and

cooperation.

The team has to determine clearly each part’s

responsibility in the program process.Those

responsibilities concern testing definition,

realization and control, equipment and means

ownership, personal, safety, and financing.

It also has to meet the regulation criteria for testing of each specific equipment or weapon and

in accordance with each armed force’s procedure. For instance, tests for Marine ships are

handled by the Permanent Commission of

Testing Programs (CPPE) Marine/DGA.

For very complex testing, an integrated testing

staff can be appointed involving representatives

from industrial companies, the DGA and the

armed forces.
Part 1 France

1-55

SGTF (Sub Group for Test Facilities) under

the aegis of WEU, the ICU (International

Cooperative Use) within the ITOPs

(International Test and Operating Procedures) and the MECI (Mise En Commun des

Investissements) between France and

Germany.

If the progress is somewhat slow, as often in

international cooperation, a few results have

already been obtained, in particular the

signature of an MOU on mutual use of

facilities, which France and Germany have

already implemented for vehicle tests.

Another important step towards more interdependence is the dialogue established

among managers of industrial facilities.

Ideas like investment sharing, reciprocal use,

reliance on foreign facilities, if not yet implemented, are now considered as good schemes

for T&E management.

2. European nations have started restructuring

their T&E management through various

methods including a reduction in personnel.

(Reduction of manpower, e.g. DCE 1200

(1997) – 1000 (1999), closure of facilities

(e.g. Chertsey UK – Bretigny F).

Validation of the Support System

The validation of the support system requires

the same tests and under the same conditions of

those of the system. These tests for maintainability and integration of the support system are

part of the weapon system common testing

program.

This validation is the responsibility of the DGA

for qualification, the responsibility of the

involved armed force for acceptance and the

decision to bring the system into operation.

The precursory results, followed by the confirmed ones, regarding the system reliability and

maintainibility, enable after analysis to determine and update or revise the initial supply list

and all the different means of logistics support.

T & E European and

Transatlantic Trends

Rationalization of T&E community is under way

at two levels:

1. International: Several groups have been set

up with the aim of reducing the Western

European overcapacity, for example the
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

1-56

Chapter 10

ACQUISITION EDUCATION

engineering—functional analysis, value

analysis, configuration management.

Experts in purchasing and pricing determine

policy and conduct negotiations with industry.

Experts in budget and funding planning organize

the inclusion in the State budget allocation for

the program. Experts in operational maintenance

and integrated logistic support start with the

design of the products in order to reduce the

costs of the tasks required to have them function well once they are in use. Quality engineers

are needed for improved risk analysis and greater

care from the beginning of the design stage. They

also intervene during contract negotiations in

order to obtain a greater degree of responsibility

from industry.

Technical Areas

Only a few of the 39 main technical areas

established by the DGA will be cited here:

telecommunications, electromagnetic detection, steering and navigation, materials for

structures, electric, electronic, optronic components, armor, naval combat and information

systems, spaceship architecture.

The training organization must adapt to the needs

of the DGA. The program director must be

capable of leading a team composed of all sorts

of experts, who, in turn, must also have reached

the highest levels in their specialties.

It is difficult to present armaments education in

France without first mentioning human resource

management. And since human resource management within the DGA organization is

strongly directed towards its essential mission,

armaments acquisition, it will be useful first to

review a few points concerning the organization

of the DGA.

Two Aspects of DGA Organization

Two aspects will be studied: integrated program

teams and areas of competence.

The purpose of integrated program teams is to

reduce costs and delays in realizing armaments

programs and increase client and user satisfaction. To obtain this all the actors must be

assembled and allowed to work at the same time.

The areas of competence allow each expert to

exercise the skills of his specialty.

Each function exercised by an expert is classed

in an area of competence: each area of competence is attached to a department which

defines a policy, methods and tools, and which

is responsible for updating know-how and

competence.

One must distinguish between two types of functional competence; those only concerning the

program teams, and the technical ones, in

methods, planning and costs.

Experts in this area assist the program director

with everything that concerns managing the program—planning, task flowchart, management

specifications, risk management—and systems
Part 1 France

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HUMAN RESOURCE MANAGEMENT

Objectives

The purpose of human resources is to acquire

staff with the required skills and in sufficient

number for each position within the DGA.

Special care is devoted to the choice of personnel for positions in the program teams, as well

as in the other departments that contribute to

the success of the programs—to gain expertise

for example at test centers, engineering and shipbuilding facilities, and aeronautical maintenance

centers. Human resource management must also

allow for career advancement motivation. Thus

expectations and aspirations of the personnel

must be reconciled as far as possible with the

needs of the DGA.

Career Training in Areas of Competence

The need to have experts in various areas must

be taken into account by human resources management. Thus career training in areas of competence, such as engineering, procurement and

program management, has been created. At the

head of each career field is a manager who is

responsible for the employment, competence,

and training of his personnel.

Professional Experience

The acquisition staff acquires skills by occupying various positions inside or outside the DGA.

As an example, engineers who are destined to

become program leaders must satisfy the following criteria: their first position must be in a

testing department or in an industrial production department to provide them broad knowledge in these two critical areas. In working in

these departments, they will rotate between

several different positions to provide depth of

understanding of the work required. To ensure

they gain the necessary experience they will

remain in each position from two to four years.

Types of Personnel Employed by the DGA

Training must be adapted to the different types

of personnel in the DGA. There are military

personnel, civil servants, employees under

contract and skilled workers. The professional

status can be that of an engineer, a scientist, technician, administrator, or worker. The status of

an engineer in France does not correspond to

what is understood in English speaking countries. French engineers continue to specialize for

five years after their “Baccalaureat,”21 in highlevel scientific and technological fields.

Education and Training

Initial Education

Education begins before personnel take their first

position. It varies according to the type of personnel. The following types of education are the

most typical ones: armaments engineers (IA =

Ingénieurs d’Armement) are scientific military

personnel recruited from Ecole Polytechnique.

They thus have received a Baccalaureat, plus

two/three years of preparatory classes (classes

preparatoires) plus two years of Ecole

Polytechnique (master’s in science degree similar). The also have received one year of military

training. They can continue their training for two

additional years at ENSTA (Ecole Nationale

Supérieure des Techniques Avancées) (specialization in a particular engineering field, such as

aeronautics, mechanics or advanced techniques)

or at Sup’Aero (Ecole Nationale Supérieure de

l’Aéronautique et de l’Espace). Some take

additional training in foreign laboratories or

prepare a doctoral thesis. This provides six to

seven years of advanced training and prepares

the personnel for the highest levels of technological, scientific and management positions in

the DGA.

The DGA also has two other schools, the

ENSIETA (Ecole Nationale Supérieure des
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Ingénieurs des Etudes et Techniques

d’Armement) and ENSICA (Ecole Nationale

Supérieure d’Ingénieurs de Constructions

Aéronautiques). Personnel are recruited by entrance examination at the “Bac plus two” 22 year

level and take a year of military training followed by three years of high level engineering

studies which train them as engineers in armament studies and techniques (IETA = Ingénieurs

des Etudes et Techniques d’Armement). Most

of the program directors are IA or IETA.

Armed force officers are recruited by entrance

exam at the Bac-plus-two level of studies and

go to officers’ training schools, Saint-Cyr, the

Naval Officers or Air Force School. Officers in

the technical or administrative corps for armaments (OCTAA = Officier du Corps Technique

Administratif de l’Armement) are administrative military personnel, recruited by entrance

examination after Bac-plus-two to Bac-plus-four

university studies in law, economics or science.

They follow officers’ training for one year and

management training for two years.

Development and production engineers (IEF =

Ingénieur d’Etudes et de Fabrication) are civil

servants in scientific fields recruited by entrance

examination after two to four years of scientific

studies in university. They follow a year of training, partly in the DGA and partly in the public

education system, focusing on basic sciences and

specialized fields in engineering

Advanced technicians in development and production (TSEF = Technicien Supérieur d’Etudes

et Fabrication) are civil servants who have studied for two years after the Baccalauréat in a technological university (IUT = Institut Universitaire

de Technologie) and one year of training in a

school within the DGA.

Engineers under contract (ICT) are civil servants

and have already received their degree as lawyers or economists before being recruited. They

compliment the above mentioned engineer personnel with their specialized knowledge and

their flexibility. Their number is increasing

slightly every year.

Continuous Education

The DGA manages different courses that cover

special topics and develop curricula to increase

the competence of its staff. The courses focusing on management and management of programs are specially set up for high potential

executives.

CHEAr (Centre des Hautes Etudes de

l’Armement) Training Executives Managers

and Program Teams

There are three types of training involved:

educating high potential staff executives, training for program directors and officers integrated

teams and specialized training:

High potential engineers are trained for future

executives’ key positions in a staff course, joint

with similar officers and private defense company executives. This course (like Industrial

College of the Armed Force—ICAF in the

United States) covers openings on worldwide

defense and economy concepts and team

working.

Engineers with confirmed armament experience

in security, expertise or tests are trained (44 days)

to become program directors in the Advanced

Program Management Course. This course is

provided for developing know how on managing integrated program teams and covers procedures within the Ministry of Defense: international issues and cooperation; methods and tools

for managing projects and programs; management; cost control and reduction techniques;

team leadership; internal and external communication techniques and case studies. The

trainees study a real project, write reports and
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Two courses are to be launched and will be

operated by CHEAR: one for newly hired

managers and one for confirmed managers. The

program for new managers teaches them the

basic concepts of management and communication. It is a practical course in communication, leadership, interviewing and negotiation.

The program for confirmed managers takes

place during the tenth year of employment. It

prepares managers for key positions between the

strategic and operational level of the DGA. It

teaches them to convert strategic orientations

into plans for action and methods of implementation. The program for advanced managers prepares them to a certain extent to be actors in

armaments programs, since they learn to lead a

project, supervise its management and manage

human resources.

present their paper to an examining board. The

CHEAr awards successful participants a

certificate.

The short (10 days) intermediate course is set

up for team members (young engineers, military

officers, civil servants trained in law and/or economics) to train them how to work in integrated

management teams.

Specialized training is providing separate

modules in purchasing and cost analysis, for

buyers who will be negotiating with industry;

human management; functional analysis and

value analysis—(excellent tools for reducing

costs of armaments programs); negotiation in

international contexts (for programs in international cooperation); economic and strategic

intelligence and control management (this is

only a partial list).
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Chapter 11

FRENCH LEGISLATION, PRACTICE

AND CONTROL MECHANISMS

GOVERNING THE TRANSFER OF

CONVENTIONAL ARMAMENTS

with the European code of conduct adopted in

June 1998:

a) respect of international agreements of the

member states, specifically of sanctions

decreed by the Security Council of the

United Nations and those adopted by the

Community, agreements notably in matters

of non-proliferation as well as other

international obligations;

b) the internal situations of the countries of final

destination, in case of tensions or armed

conflicts;

c) the preservation of peace, security and

regional stability;

d) the national security of the member states

and the territories whose foreign relations

are placed under the responsibility of a member state, as well as that of a friendly or allied

country;

e) the behavior of the purchasing state towards

the international community, notably its

attitude to terrorism, the nature of its alliances

and its respect of international law;

f) the existence of a risk that the equipment

will be deviated within the purchasing

country and re-exported under undesirable

circumstances; and

The general law applicable since 1939 prohibits the export of armaments. Hence the export

of war materials becomes an exception to that

principle and is subject to two successive phases

of control.

a) The law requires that before any marketing

of the product, negotiation or sale, the French

government must provide approval (‘preliminary approval,’ AP). It is valid for three

years at the marketing phase (exploration of

general market conditions, excluding the

remittance of formal proposals) as well as

at the ‘negotiation’ level (the opening of

negotiations up to the drafting of a contract).

This authorization is limited to only one year

at the ‘sale’ phase (signing of the contract).

The decision is taken by the Prime Minister

upon recommendation by the special

interministerial commission composed of

representatives from the ministries of foreign

affairs, defense and finance; and

b) The actual export of equipment can take

place only upon the delivery by customs of

an authorization of export of war materials

(AEMG), endorsed by the ministries for

foreign affairs and defense.

Decisions by the French government in matters

of armaments exports are a matter of sovereignty. A case-by-case assessment mainly takes

the following criteria into account, in accordance
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g) the compatibility of the exported armaments

with the technical and economic capacities

of the receiving country, since it is to be

hoped that countries answer legitimate

defense needs while devoting a minimum

amount of human and economic resources

to armaments.

A decree contains the list of war and assimilated materials, for which marketing, negotiation, sale and export are subject to preliminary

agreement by the French Government. The

principles behind this text imply the widest

possible interpretation of these materials, and

the following:

a) arms, munitions and their vehicles;

b) sub-sets and parts of the above, as well as

equipment specially designed or modified to

produce, accompany or maintain them; and

c) sensitive materials specifically designed for

military use, such as cryptology, important

toxic components, important equipment or

products under surveillance in the field of

missile technology.

France adheres to the principle that the purchasing state must not re-export the acquired equipment. French regulations distinguish between

two types of no re-exportation clauses, a ‘complete’ or ‘ordinary’ clause and a ‘state’ clause,

for which a written commitment is required from

the receiving state.

The “complete” non re-exportation clause

requires the buyer to abstain from selling,

lending or remitting the equipment, parts or

documents in any way or manner.

The “state” non re-exportation clause applies to

elements that are to be included in a larger

assembly. The buyer can not transfer to a third

party these components in their initial state.

The major texts that govern these regulations

are decrees and all these texts can be found in a

brochure edited by the Direction des Journaux

Officiels number 1074, entitled “Matériels de

guerre, armes et munitions.”

The Legislation, National Practice and

Control Mechanisms for Transfer of

Dual Use Commodities

The legal basis for French government control

over the exportation of most dual use goods dates

from March 1st 1995 with a system resulting

from the adoption of a European rule, Number

3381/94. This rule was included by Council decision Number 94/942/PESC in the framework

of Foreign Policy and Security of the European

Union Treaty with regard to common control

over military exports.

The system presently in force concerns goods,

technologies and software that appear on the lists

covering the fields of advanced materials and

their use; advanced electronics, calculators, telecommunications (including cryptology), sensors

and lasers, navigation and avionics, naval techniques and propulsion. The control system also

applies to dual usage technologies that contribute to arms of massive destruction. The double

usage goods list is an assemblage of several lists

–International Nuclear (NSG), Chemical and

Biological (Australia Group), Ballistics (MTCR)

and conventional weapons (Wassenaar Arrangement). Particular care is taken with the more

sensitive products, technologies and software,

especially those able to be used to manufacture

missiles. These items are dealt with in France

according to the procedures that are applicable

to war materials.

The French and European control system is

fundamentally erga omnes, i.e., non-discriminatory, and without selecting any specific

countries for specific restrictions, except in case

of international embargo. Control is exerted with
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services of the Foreign Affairs Department, the

Ministry of Defense and the General Secretariat

of the National Defense. Then the specialized

department of Customs delivers the license.

Products not destined for a country in the EU

and appearing on the control lists must be identified when passing through customs, and

accompanied by the appropriate licenses. For

transfers within the EU, only the most sensitive

products require licenses.

Has responsability for coordination and regulation of the French Defense policy. It is directly

administered by the Prime Minister but is composed by civil servants from the departments of

Foreign Affairs, Defense and industry. Its main

mission is to control the exports of armament

goods but also to gather information on technological evolution and protect the “points

sensibles,” i.e. vital sites for the French military

research or army.

the intent to appraise the possibility of contributing to the disturbance of world order, without

a priori exclusion.

The products, technologies and software on the

control lists must be licensed for export outside

the territory of the European Union. In principle

the license is granted individually and concerns

an exporter of a series of products towards

various destinations, for a period of two years.

Licenses can, however, be general in character

when they concern an exporter’s right to deal

with wide categories of goods to groups of

destinations.

A license is requested by an exporter, or his representative, from a specialized department in

Customs. The Control Office of the Department

of Industry delivers it. In case of more complex

individual licenses or all global or general

licenses, the Office consults the specialized
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Chapter 12

INTELLECTUAL

PROPERTY RIGHTS

of abstract reasoning meant to arrive at a

determined purpose;

d) aesthetic creations, which are exclusively

ornamental. There is no technical effect

involved. They are not patentable, unless it

is considered that a product has a technical

effect that is inseparable from the aesthetic

creation, in which case a unique patent is

possible (article L511.3 line 2 of CPI);

e) plans, principles and methods in the exercise of intellectual activity, in games or in

the field of economic activities as well as

computer programs, which are abstract,

imaginary, theoretical creations with no

physical effect; and

f) presentations of information, which are not

technical in character.

The law and international conventions expressively refuse all patentability in the following

cases:

a) inventions whose publication or use are contrary to public order or morality (e.g.,

inventions having to do with the human

body);

b) new plants, that are protected by a specific

title, a certificate of plant acquisition (articles

L623.1 and following of CPI); and

c) animal species and essentially biological

processes for obtaining plants or animals.

INTELLECTUAL PROPERTY RIGHTS

IN FRANCE

Patents in France are ruled by Book VI of the

Intellectual Property Code (articles L611.1 and

following).

Patents

Patents protect inventions and consist in titles

delivered by the national state authorities after

a documentary inquiry, conferring upon the declarer of the invention a temporary monopoly

over its exploitation, for a duration of 20 years

from the date that the request was filed. Patents

are a tool for economic advancement and an

encouragement for research and development.

Patentable Inventions

An invention is the creation of a product or process which consists of a new solution to a technical problem. Not all inventions are patentable.

The following elements, taken as such, are not

considered patentable:

a) discoveries that throw light on something

that already exists, but of which no one had

previous knowledge or possessed;

b) scientific theories which are abstract principles serving as a basis for a science or

explanation of a field of knowledge;

c) mathematical methods, which are the result
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Criteria for Patentability

A patentable invention must be:

a) New – An invention is new if it is not

included in the present state of the art, i.e.,

it must be situated outside of what is known

[le français n’a pas de sens ici, traduction

incertaine] (article L611.11 CPI).

b) Imply Inventive Activity – An invention

presents inventive activity if, for someone

in the field of activity, it does not follow

evidently from the state of the art (article

L611.14 CPI).

c) Adaptable for Industrial Applications –

An invention must be realizable in practice,

i.e., manufacturable or usable (article

L611.15 and 16 CPI) in any sector of industry. Thus the invention cannot consist of an

abstract principle, like, for example, a

scientific discovery.

Procedures for Delivering a Patent

Filing a Request

Protection by a title of industrial property

implies that an application to that effect has been

filed. Formulated in French (unless translated),

it must include various parts, such as an identification of the applicant, a description of the

invention, claims to the invention, etc. Any

physical or moral person with a home or business address must apply at the Institut National

de la Propriété Industrielle (INPI), either directly

or via an intermediary. The INPI then ascribes a

date and number to the application for a deposit

fee.

Processing a Request

All patent applications, while remaining confidential, are brought to the knowledge of the

Ministry of Defense so that he can attribute security status to any whose divulgation could

endanger national defense interests. There is a

five-month delay for this procedure, counting

from the date of application.

The INPI director can reject applications that

do not adhere to the prescribed form, as well as

those that present an obviously on patentable

invention.

Establishing a Research Report

Documentary research on the novelty and

inventive activity of the subject allows the

applicant to draw conclusions on the existence

of precedents to his invention and assess the

validity of his application. The applicant can

deposit new claims in view of the precedents

mentioned in the report or make observations

to justify maintaining the initial claims.

This research is accomplished by the European

Patent Office at the Hague, which drafts a report

at the request of the INPI.

Publishing the Patent Application

Publication takes place automatically or at the

applicant’s request 18 months at the latest after

the date of application or priority—extension

to France of a foreign application within 12

months of that application abroad.

At the end of this procedure the patent is

delivered. It is remains in force in return for the

payment of annuities.

Patent Rights – Monopoly of Exploitation

In France a patent confers upon its owner to

conduct exclusive activities of exploitation—of

manufacture, supply or commercialization of the

invention, of utilization, importation and detention to these ends. The owner may concede some
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of these activities to third parties, in the form of

exclusive or non-exclusive licenses.

Some activities are permissible without the

owner’s authorization, namely, activities conducted in private, for non-commercial purposes,

experimentation on the object of the invention,

or previous personal possession. For example, a

third party can, in good faith, have realized or

possessed the same invention as the one protected by the patent, at the moment the application was filed, in the same territory, without

having filed an application. That party may

exploit the invention on their own account.

Violating Patent Rights – Duplicates

For a patent to be violated it must be valid and

still in force. The burden is on the alleged

duplicator to prove that the patent is not valid.

Duplicates are judged on their resemblance with

the original and not on their differences. Duplicating can be the conduct of activities that are

exclusively reserved by law to the owner of the

patent, and can involve manufacture, etc. Civil

and criminal courts have jurisdiction over these

activities, independently of any intent on the part

of the alleged duplicator.

Defense and Patents –Defense Contracts

The State can sign public and private contracts,

like any moral entity. However, in that case,

special rules apply.

Co-ownership with the State

When the Ministry of Defense and a company

jointly realize a patentable invention they can

file a joint application with the INPL. In that

case there is co-ownership under articles

L613.29 to 32 of the industrial property code.

This law is very strict with regard to the coowners, particularly in financial matters, and is

very difficult to manage. Drafting co-ownership

regulations as a private contract which can dispense the partners from referring to the law, or

complement the law can facilitate it. The Ministry of Ministry of Defense is co-owner of a

certain number of patents.

When an invention is the result of a market

(notably for option C of CCAG/P or chapter VII

of CCAG/M) the patent belongs to the owner of

the market. The public entity owns the right of

reproduction of the results of this market,

including the right to exploit the patent for its

own purposes.

When the owner of the market exploits the

results outside of this market he reimburses the

public entity for the expenses incurred by it

(articles C.31 and following of CCAG/P).

Although the

CCAG does

not mention

this, it is

legally

founded

that when a

public entity

exploits an invention outside the

needs of the market

and for third parties not

designated in the market, it

must reimburse the owner of the patent, as the

right of reproduction is strictly limited to the

market and to its objectives.

The Ministry of Defense can conclude contracts

ceding the licensing a patent, whether the patent

belongs to it or to a company. The State can be

acquirer or licensee.

In case the State cedes a license it recovers the

effective sale price of the patent.
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In case a license to exploit a patent belonging to

the State is conceded, it receives exploitation

fees from the licensed company.

In both of the above cases the appropriate

department of the Ministry of Finance can veto

the financial clauses, since state patents enter

the private sector.

The State can also acquire patents from private

companies. If the patent is the result of a market

the State acquires it free of charge (article C23.2

of CCAG/PI). If the patent is not the result of a

market the State must pay a price.

Finally, the State can request the exploitation of

a patent from a third party, exclusively or not. It

then becomes the licensee and must pay the

owner of the patent for the right to exploit it.

Miscellaneous Points

The State is owner of a patent when it has

requested one of its employees to realize a given

technique (article L611.7 of CPI) or when the

employee has taken the initiative to realize an

invention while enjoying the benefit of the

professional means at his disposal.

Besides, the rights to exploit software realized

by agents of the State belong to the State, which

can exploit them as it wishes.

Defense Prerogatives

The code protecting intellectual property

(L612.8 to 10 and R612.26 to 32 of the Intellectual Property Code) attributes the following

prerogatives to the Minister of Defense: It can:

a) prohibit the revelation and exploitation of

inventions contrary to defense interest;

b) concede licenses on its own initiative, in the

interest of defense, with fees determined by

the legal authorities in the absence of an

agreement; and

c) receive favorable treatment when it duplicates the patent of a third party for defense

purposes (L615.10 of CPI).

Only the prohibition of revelation and exploitation is commonly used, as well as the measures

concerning duplication.

Confidential Access to Patent

Applications at the National Institute

of Industrial Property

The Intellectual Property Code authorizes the

Minister of Defense to “inquire confidentially at

the INPI for information about patent applications.”

INPI organizes weekly meetings for delegates

from the major departments of the DGA during

which its applications are examined.

When the DGA delegates conclude that publishing or exploiting a patent application would not

be prejudicial to defense interests they return

them to the INPI, which continues its procedures

for delivery of the patent. In case of the contrary,

or in case of doubt, they submit the application

to their directors for further examination.

Prohibiting Divulgation and Exploitation

The law states that inventions for which patent

applications have been filed cannot be freely

divulged and exploited as long as authorization

to do so has not been granted, and that, except

for a request to the contrary by the Minister of

Defense, authorization is granted automatically

five months from the day of application.

The law also states the conditions in which the

Minister can require prolongation of the

prohibition to divulge and exploit beyond the

five-month period:
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a) the request must be made before the end of

the five-month period;

b) the prolongation must be requested for a

period one year, renewable each year; and

c) the prolongation gives the right to indemnities

in favor of the applicant.

The prohibition to divulge and exploit, commonly called secrecy, concerns in principle all

patent applications filed with the INPI, ends with

the processing of the application or at the end

of the five month period, or, if the Minister of

Defense has not requested prolongation within

this period.

Secrecy results in the suspension of the processing of the application. No research for precedents takes place and the owner of the patent is

ignorant of the value of his invention.

Moreover all freedom to exploit and divulge it

is prohibited, notably the negotiation of agreements to license, expose, publish, and freely

extend the patent application abroad. The applicant can ask specific authorizations from the

Ministry of Defense (concessions to license a

company, cession of the patent, exhibition, etc.),

but when authorizations are granted they can be

restricted.

Exploiting Intentions Committed to Secrecy

Prohibition to divulge and exploit is an essential prerogative, as some inventions cannot be

exploited or divulged without endangering the

nation. Expropriation and obligatory licensing

for defense (L613.19 and 20 of CPI) allow the

following:

a) depriving the applicant of the ownership of

the invention in exchange for payment which

is not determined in advance, either out of

court or by court decision;

b) depriving the applicant non exclusively of

his right to exploit, to satisfy defense requirements, notably when the applicant has

refused to grant a licensing contract out of

court to the Ministry of Defense. He is owed

payment, determined out of court; or if not,

in court.

These two measures have not been enforced for

many years because they are cumbersome and

costly. The Ministry of Defense cannot be considered a duplicator when it exploits or has patents

belonging to third parties exploited. In such cases,

although the Ministry of Defense can be identified as duplicating a patent it can continue exploiting the disputed patent by paying penalties

in proportion to the interests involved. However,

outside defense requirements the Ministry of

Defense remains subject to the laws pertaining to

duplication and cannot benefit from this measure.

The NATO agreement of 1960 (BO431 volume

2) on the mutual protection of defense inventions allows the extension to the NATO countries of a patent or patent application that has

been made secret on the territory of one of the

member countries. A similar agreement was

signed in 1984 between France and Sweden.

A patent application made secret in France can

also be extended to other NATO countries and/

or to Sweden if the applicant has obtained the

agreement of the Ministry of Defense. The

Office of Industrial Property of the Ministry of

Defense sends the classified patent application

to the defense attachés of the countries involved,

which communicate it to their local BPI’s and

representatives. This procedure is used in the

opposite way when a NATO country or Sweden

wishes to extend a secret patent or patent

application to France.
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Chapter 13

THE INDUSTRIAL BASE

presupposes a deliberate policy to encourage

subcontractors and small and middle sized companies with enough diversity and innovative

capacity to maintain a rich and competitive background. Restructuring has begun in the electronics and aeronautics sectors. Thomson CSF has

been privatized, with the purpose of supplying

it with the necessary space to maneuver in the

context of international competition. The aim

of the merger between Dassault Aviation and

Aerospatiale is to create an industrial base in

the civil and military aeronautics and space sectors capable of strengthening European alliances

begun in that area, notably with the partnership

with the German company DASA.

GIAT industries will regroup and reorganize

itself around its main activities. The purpose is

to find its balance and ensure its viability. The

necessary steps will be taken progressively but

with determination, to allow this company to

recover its role in the field of terrestrial armaments in Europe and beyond. Similarly the

capability of the naval construction sector will

be enhanced with improvements in management

and a sustained effort in productivity and

reconstruction.

Private Enterprise

French Defense Industry

The defense industry occupies an important

position in the French economy. It generated in

1997 a turnover of Euro 17 billion, among which

Euro 6.6 billion for export markets. More than

5,000 companies are involved in this activity

which employs about 180,000 people (including

RESTRUCTURING THE DEFENSE

TECHNOLOGY INDUSTRY BASE

Review of the Present Situation

The general decline in the defense budgets of

the major industrialized countries, and, more

generally, restrictions in the market for weapons

have helped to exacerbate international competition in that sector. It is indispensable for French

defense policy to adapt to the new environment

in the armaments sector. The construction of Europe calls for the reinforcement of the policy of

large-scale cooperative programs, already pursued over the last few years. This will continue

to develop within the Franco-German framework decided at the Baden-Baden summit on

December 7, 1995, and beyond that, with the

European Arms Agency, provided for in the

European Union Treaty.

A general tendency towards industrial concentration has been taking place over the past few

years, in the United States, Germany and Great

Britain. Large groups have been formed, capable

of taking charge of activities in high technology

sectors while supporting the ups and downs of

economic cycles thanks to their important financial reserves. The French defense industry is

taking the same direction by seeking alliances

on a national and European scale.

Industrial Restructuring

The restructuring implies creating important

subsectors capable of supporting arms production industries in the nuclear, aeronautics, space,

electronics and electromagnetic fields. This
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government-owned facilities and M.O.D. procurement services, but not including non-specific subcontractors and service providers which

represent an estimated additional 50 percent).

Most of the industrial groups which have an

activity in defense are also present in civilian

high technology activities.

The defense sector covers a large number of

complex skills in the design, manufacture and

testing of systems that France has developed over

the years through numerous programs. In terms

of activity as well as of capabilities, the French

defense industry ranks in the world just after

the U.S. industry and at about the same level as

British industry. It offers a thorough range of

products, and has the capability to design and

manufacture nearly all (more than 90 percent in

value) the equipment necessary for the French

armed forces. Programs in international cooperation, generally with European partners,

represent a growing proportion of the defense

activity, from about 20 percent today to an

expected 30 percent to 35 percent in 2002.

After years of continuous growth till the mid1980s and a stabilization till early 1990s, the

sector suffered from the structural decrease in

defense markets. During the first half of 1990s,

in France as well as in the rest of Europe, the

future of the aerospace and defense industry was

overshadowed by reduction in defense budgets,

an intensification of competition in export markets and the creation of industrial giants in the

United States. Observers were generally pessimistic about the future of the European defense

industry, highly fragmented and handicapped by

overcapacity. Its consolidation and rationalization, although unanimously agreed as essential,

appeared likely to be extremely difficult to

implement, owing to its unique nature and

sensitivity.

Today, this industry appears in better condition

than what could have been anticipated. French

defense companies, as well as European ones,

have made intensive efforts to adapt, especially

in terms of workforce. From 1995 onwards, in

France, this sector entered into a phase of progressive stabilization due to a rise in export

levels, to favourable conditions in the commercial aircraft market and to a situation approaching stability in defense budgets. This resulted in

a substantial improvement of the economic

situation of most of the major defense companies. Export progressed significantly in 1998,

the orders rising by 60 percent at Euro 7.6 billon

versus Euro 4.6 billion in 1997.

Large scale structural changes have taken place

in the French defense industry 1998-1999. The

privatization of Thomson CSF occurred in 1998,

the one of Aerospatiale in 1999. Previously a

majority shareholder of these companies, the

French State concluded shareholder agreements

with the private industrial groups Alcatel and

Lagardère which acquired significant interests

in the new and enlarged Thomson CSF and

Aerospatiale Matra, in consideration of the contribution of their aerospace and defense activities to these new companies. AerospatialeMatra

has also become the holder of the interest of 46

percent in the military and business aircraft

manufacturer Dassault Aviation previously held

by the French State.

Aerospace

In the aerospace sector, the merger between

Aerospatiale and Matra Hautes Technologies’

activities has created a new entity positioned at

the forefront of the consolidating European aerospace and defense industries. Aerospatiale Matra

will be present in commercial and military aircraft, helicopters, space (launch systems, ballistic missile systems, and satellites), missile

systems, telecommunication and information

systems, and will benefit from numerous technological, financial and competitive advantages

as well as a greater balance between its civil
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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and military activities as compared to its predecessors. The new group is the fifth largest aerospace and defense company in the world and

the second largest in Europe, with pro forma

annual sales of over Euro 12 million in 1998 and

52,000 employees. Its pro forma backlog at the

end of 1998 represented nearly 3 years of current turnover. Its 1998 sales were 75 percent

from export markets and 25 percent domestic;

65 percent were from the civil sector and 35

percent from the military sector.

For the aerospace sector as a whole, the years

1998-1999 will appear as a turning point. Airbus Industrie reached nearly half of the world

market of commercial aircraft of more than 100

seats with firm orders of about 500 jets in 1998.

In space, Ariane 5 is now ready for commercial

market after its qualification flight. The total

turnover of aerospace industries reached

Euro 24.6 billion, with 68 percent for export

markets.

Defense Electronics

In the defense and professional electronics

sector, the restructuring of Thomson CSF was

achieved by the contribution of the defense and

space activities of Alcatel and Dassault

Electronique and of the former satellites activities of Aerospatiale to Thomson CSF and to

Alcatel Space Industries, a joint venture created

between Alcatel and Thomson CSF. This operation rationalizes the French capabilities in the

field of military telecommunications by enhancing the synergies with civil applications by the

way of a comprehensive technology exchange

agreement between Alcatel and Thomson CSF.

Land Systems

Giat industries, a major French manufacturer in

the fields of battle tanks, land weapons and ammunition, continued to adapt its industrial capacities to the depressed market of land equipment.

Toward Further Integration in

European Industrial Capacities

The French defense industry, as well as its counterparts in other European countries and in the

western hemisphere, should pursue its effort

toward increased cooperation and further

integration.

Significant steps have already been reached and

others are on the way. This process involves two

simultaneous ranges of actions:

• a progressive consolidation of demand, by

the way of increased cooperation between

customer countries. The new common

European procurement agency OCCAR,

created in 1996, progressively manages more

cooperation programs large scale actions of

consolidation of supply, by the way of

significant industrial mergers, mainly hitherto in France, Germany, and the United

Kingdom, but also elsewhere, by the creation

of large scope joint venture companies

between two, three or four international partners, as it is already the case in missiles,

satellites, equipment. This pragmatic and

progressive approach should continue to be

patiently implemented, leading to more

efficient international companies able to

better meet the needs of their customers.

Public Enterprise

The Naval Shipbuilding Directorate, DCN

The shipbuilding directorate’s main mission lies

in designing, working out and maintaining the

French navy ships. It is undertaking to improve

its competitiveness, cater for its main customer

and win on the international markets the size of

an industrialist to be referred to in the fields of

world military shipbuilding, since it is already

qualified, thanks to its capabilities and products.
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DCN is organized so as to reach this objective

through an enhanced integration of its facilities,

an updating of its management control and an

increased commercial effort on the export

market.

DCN employs some 18 000 persons, mainly

assigned to Brest, Toulon, Cherbourg, Indret,

Ruelle, Papeete facilities and to “DCN

Ingénierie.” In 1998, its turnover is 11.3 billion

French francs, orders in 1998 for 21.3 billion

French francs included exports and diversification for 6.5 billion francs. With orders from the

French armed forces in decline and set to decline

further, DCN had to reduce its workforce. In

addition to the cuts made over the last few years,

the workforce will be further reduced by stages

until a new equilibrium is reached in 2002.

DCN conducts six major national programs and

seven major ones for the export markets.

The restructuring now in progress at DCN began

in 1996 with a drive to focus exclusively on the

French core industrial skills. As part of the

broader reorganization of French defense

procurement, the DGA set up a new entity—the

Weapons Procurement Directorate or DSA —

(Direction des Systèmes d’Armes)—to handle

weapons procurement.

With these efforts well under way, the Secretary of Defense felt it was time to give new impetus to the DCN modernization drive while

reaffirming the move towards greater autonomy.

On May 12, 1999, the Secretary announced a

new series of measures including the decision

to separate DCN from the DGA. This change in

administrative status represents an important

milestone. Although still part of the Ministry of

Defense, DCN gains new independence in the

management of human resources, finances and

assets. Whereas the DGA was DCN’s prime customer while the two entities shared ties of

operational dependency, henceforth only the link

as prime customer remains. A review will also

be conducted to determine how DCN can best

expand its partnerships with other entities

through DCN International.

The Aeronautical Maintenance

Department, SMA

The Aeronautical Maintenance Department,

SMA, unites the aeronautic industrial workshops. It is an entity within the DGA, primarily

responsible for conducting indsutrial maintenance operations on aircraft, engines, equipment

and related systems and for providing the corresponding support facilities (repair for the air

force aircraft in Clermont-Ferrand, for the

engines in Bordeaux and the aircraft of the naval

aviation in Cuers-Pierrefeu). Their previous

experience entitles them to conduct successfully

aircraft streamlining and to offer the armed

forces an overall maintenance service. The SMA

also offers services to foreign clients in partnership with French industrialists of the area. SMA

ranks as France’s leading military aeronautical

maintenance operator.

3,400 persons work for the SMA in its industrial aeronautic workshops. The workshops carry

out more than 20,000 inspections and overhauls

on more than 120 types of aircraft and are in

charge of more than 20,000 engine overhauls.

Turnover in 1998: 1.6 billion French francs

Orders in 1998: 1.72 billion francs including 80

million francs for exports and diversification
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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The establishment features sophisticated industrial means (electronic beam welding, electroerosion, laser cutting, automated scouring chain,

etc.) and offers a number of services to industry

and the French state: specific tests, expertise,

age-studies, technical follow-up, collection of

information and drafting of users’ manuals with

instruction on use, operation limits and repair.

The industrial aeronautical maintenance in

France (distribution of military activities) is:

• airframes: SMA 40 percent, industry 60

percent;

• engines: SMA 60 percent, industry 40

percent; and

• equipment: SMA 20 percent, military and

industry establishments 80 percent.
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Chapter 14

FUTURE TRENDS

V (capital investment) of the defense budget.

This effort will have a European dimension.

Within this framework special attention will be

devoted to maintaining France’s technological

and industrial competence, along with that of

its European partners.

European Cooperation

The DGA pursues an active cooperation policy

at the European level and sees that French equipment is interoperable and fully compliant with

NATO standards. Recent successful programs

include HELIOS observation satellite, NH-90

or TIGRE Helicopters, COBRA counter-Battery

Radar or MISTRAL missile. The FSAF program

(Futur System Anti Air Family) has been

launched ten years ago between France and Italy,

to provide naval and grand European missile

systems. The trilateral PAAMS program

between France, Italy and the UK will expand

this European family to medium range naval

missile systems. An important extension of this

family’s potential is to give to the MSAM grand

system (SAMP/T, medium surface-to-Air

Missile) an improved site defense capability

against theater ballistic missile threat.

France’s commitment to cooperation programs

has been quite strong since the end of World

War II. Considering the deeper integration of

armaments industry and the growing cost of new

material, cooperation programs tend to become

more and more numerous; the share of programs

financing conducted in cooperation is 16 percent for the time being and will become 34

percent at the end of the period defined by the

programming law (2002). Acting jointly on the

states’ demand and the industrialists supply will

result in expected cost sharing and will help

people to work together on common projects.

European Industry

As European industry isfacing shrinking defense

budgets and increased international competition

in armaments, Europe must have a competitive

and technologically advanced defense industry

that is efficient and adaptable enough to furnish

the member states with military equipment at

optimum cost efficiency. Thus concrete cooperative projects must lead to the reduction of

existing overcapacity and the creation of real

industrial and technological complementarily

among the partner countries, while guaranteeing supply under all circumstances. In this perspective, despite heavy cuts in defense budgets,

choices were made in view of maintaining

priority for European programs and respecting

France’s commitments to its partners. Thus funding for European cooperative programs, notably with Germany, the United Kingdom and Italy

will more than double between 1996 and 2002.

In preparation for the future, exploratory

research and development projects will receive

funding slightly higher than 5 percent over Title
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OCCAR

“To unify it is better to join together specific

differences than to efface them for the sake of

vain order.” – Saint Exupéry

The Creation of OCCAR

Europe’s defense industry is undergoing an

unprecedented change. The emergence of

industrial alliances within Europe underlines the

goal to efficiently meet the new challenges in

armament cooperation.

Lack of ambition having led negotiations on the

European Armament Agency to a deadlock,

France and Germany decided in December, 1995

to go forward together and to apply new co-operation principles—the “Baden-Baden” principles, in the framework of a Franco-German

armaments structure. These principles call for:

the establishment of a real industrial and technological complementarily; the abandonment of

analytical calculations of industrial “just return”

for each individual program, in favor of a global

balance to be achieved over several programs,

and the creation of integrated, trans-national

teams at both governmental and industrial levels.

Based on these principles, OCCAR was formally

established on 12 November, 1996 by France

and Germany, with the UK and Italy joining

later. OCCAR is the precursor element for a

future European Armament Agency, which

remains the goal of the four founding countries

as well as other countries that will join when

the time comes.

Organization of OCCAR

OCCAR has its headquarters in Bonn, and is

composed of a Board of Oversight (decisional

level) and an executive structure (operational

level). The Board of Oversight, composed of the

four National Armament Directors, fixes the

guidelines and controls the executive structure.

The current programmes integrated in OCCAR

include the following ones: Milan, Hot, Roland,

Brevel, Tigre helicopter and the Cobra counterbattery radar. On the 16th of last June, the MoU

of integration into OCCAR of the FSAF family

of future surface-to-air systems was signed. Furthermore, decisions have been finalised on the

eventual integration of other programs, such as

the GTK/MRAV/VBCI family of wheeled

AFVs, the TRIGAT-LR and –MR anti-tank missiles, and the PAAMS shipborne air defence

system.

Program directorates are integrated into OCCAR

on the international level (within the executive

structure), and on the operational level with the

General Staffs. The resulting integrated teams

will be based at a single location, and their members

will receive large delegations from their authorities

and will work in the interest of their programs

rather than in view of national directives.

For each program, competition will be organized

whenever possible. However, instead of specific

and ad hoc groups created for the occasion, truly

trans-national industries will be contracted, and

these will be responsible for organizing the

worksharing between the different participating

countries. These integrated companies will work

within the integrated trans-national program

teams.

For the time being and during a transition period,

program directors remain responsible for the

management of their programs, until the Convention signed between the ministers of defense

in Farnborough on the September 9, 1998 is

ratified by the Parliament of all the member states.

The Goals for the Future

DGA’s primary concern for 1999 is, first of all,

to complete the set of rules and procedures that

will govern the organization, and, second, to give
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the organization a legal personality that would

eliminate the constraints stemming from the

accumulation of individual state regulations, and

would allow it to formulate a real common,

coordinated purchasing policy. This legal personality will be acquired once the last parliamant

has ratified the Convention. So far, OCCAR with

legal status is planned to be operational for

January 2000.

Nations such as the Netherlands have already

shown their interest in being part of the organization. Their accession in the organisation

should be finalised by the end of this year.

Beyond the management of current programs,

the goal is to implement a common approach to

the preparation for the future. This involves in

particular the coordination and rationalisation

of the evaluation and test centers throughout

Europe, as well as the organization of common

maintenance structures for the equipment

developed and produced under joint programs,

the creation of technological interdependence,

and the definition of common export strategies

for products developed in cooperation.

The creation of OCCAR represents a significant

step towards the rationalization of the armaments

sector in Europe, in an effort based on the search

for economic efficiency, solidarity and mutual

dependence. The existence of OCCAR implies

that the participating states, their administrative

structures and their armed forces are willing and

prepared to delegate part of their prerogatives

to these new trans-national structures.
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Chapter 15

PRINCIPLES FOR A

RENEWED TRANSATLANTIC

COOPERATION

intention to improve defense equipment cooperation among their nations through the following principles and declare their commitment to:

• Apply these principles in any relevant agreements or MoUs governing projects among

their nations;

• Cooperate at the earliest possible stage with

emphasis on the harmonisation of operational

requirements;

• Achieve cost-effective acquisition;

• Improve their cooperative defense research

effort to facilitate common solutions for their

requirements;

• Inform projects participants of any parallel

national activity at the earliest opportunity;

• Establish appropriate arrangements to protect freedom of use for defense purposes and

security of supply, among participant nations,

for cooperatively developed and produced

defense systems and equipments;

• Establish a set of management and financing

procedures for each project;

• Equitably share the management of the

project and the key technologies involved;

• Minimize constraints on the exchange of

Several bilateral projects have been conducted

between European and American companies

(GE/SNECMA for example). As the Europeans

are trying to consolidate their links on the continent through bi- or multi-lateral projects, a

strong initiative has been taken to strengthen the

links with the US. In December last year, in

Carcassonne, three European acquisition representatives met with their American counterpart

to define in a charter the principles for a

“renewed transtlantic cooperation,” including a

basis for solving problems related to technology transfer and exports limitation to third

countries.

The undersigned ,

The Honorable Jacques GANSLER, Under

Secretary of Defense, Acquisition and Technology, USA

Ministerialdirektor Dr. Martin GUDDAT,

Hauptabteilungsleiter Rüstung, Germany

Sir Robert WALMSLEY, Chief of Defense

Procurement, United Kingdom

Monsieur Jean-Yves HELMER, Délégué

Général pour l’Armement, France,

share a common vision: to define, develop and

build interoperable defense systems. In furtherance to this vision, and in a spirit of mutual

understanding and good will, they declare their
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information and products to facilitate

industrial teaming and increase efficiency;

• Inform other Allies of progress in the field of

collaborative opportunities and, when

appropriate, give them the opportunity to

participate in individual projects;

• Establish procedures for the sale or transfer

to third countries of cooperatively developed

and produced defense systems and equipment; and

• Give fair consideration to export clearance

for national and cooperatively developed

systems aimed at the same markets.
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FURTHER READINGS

Lacouture, Jean, Charles de Gaulle, the Rebel,

1890-1944. Translated by Patrick O’Brien,

1990.

Cogan, Charles G., Charles de Gaulle, a brief

biography with documents. 1996.

Debray, Regis, Charles de Gaulle: Futurist of

the Nation, translated by John Howe, 1994.

Echange d’information sur la planification de

la défense, anaylses and références, Ed.

Ministére de le Défense, France 1999.

Revue L’armement (several issues) Ed. CHEAr.

Hébert, Jean-Paul, Stratégie française et industries d’armement, La documentation

française.

Carroué, L., Les industries européennes de

l’armement. Ed. Masson

Boucheron, J. M., Paix et défense. Ed. Dunod

Chear, A.A., Ed. Addim, Armement et Sécurité.

Weidenfeld, Werner, Wolfgang Wessels,

L’Europe de A à Z, Office des publications

des Communautés Européennes.
Part 1 France

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ENDNOTES

1. The prospective plan is co-signed by CEMA

and DGA.

2. Systems of deterrence and C3R each have

two OCO’s.

3. Overall cost of possession includes cost of

acquisition, use and retirement from use.

4. And of the Gendarmerie Nationale.

5. Joint decision taken by EMA and DGA

within CASF.

6. The decision to begin the preparation stage

is the responsibility of the piloting headquarters.

7. Or the piloting headquarters if the composite program depends only on one branch.

8. If the program has a steering committee a

piloting committee is not indispensable but

can be useful, especially to interface with

the integrated program team. In this case the

co-chairmen of the piloting committee attend the steering committee meetings.

9. For programs in the design stage this clause

covers the case where a specific item has

been mentioned in the investment catalog,

with the understanding that any studies involving defense expenditures remain dependent on the procedures that govern these

studies.

10. In case the development/industrialization

phase is not dissociated from the production phase these authorizations concern the

launched phase, i.e., the realization phase.

11. These procedures appear in the instruction

concerning the investment funding catalog

and the approval of program athorizations.

12. Nuclear, space and some information and

communication programs can br the responsibility of the Armed Forces.

13. Including estimations, possibly by intervals,

of the total cost, the optimization criteria for

defining the components of acquisition costs,

and the defining elements of utilization costs.

14. A step-by-step elimination process can be

envisaged.

15. In case of an interarmy program the opinions of the Joint Armed Force General Staff

involved will have been previously obtained.

This comment is valid throughout the present

instructions.

16. Adopted for the army.

17. However, an effort will be made to conduct

the definition phase in such a way as to obtain them. The choice between these two options rests on an evaluation of the risks that

remain to be mastered in the development/

industrialization phase.

18. When it examines the catalog of budgeted

investments in operations.

19. These files, established by the leading department for the program in liason with the

piloting headquarters, supplements the catalog of budgeted investments in operations.
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20. During the period of overlap between the

realization and utilization stages, which can

take place, for example, when operational

implementation has been decided before the

end of the program, the procedures of the

present instructions remain in force.

21. The “Baccalauréat” degree in France is not

the same as a Bachelors degree in the United

States. It is the equivalent of a high school

with a more intense specialization in a major area of study, such as sciences, humanities, economics or technology.

22. This means the baccalauréat plus two years

of preparatory classes.
Part 1 France

1-81

GLOSSARY

AEMG Autorisation d’exportation de matériel Licence for Export of War Materials

de guerre

AIR Maîtrise du milieu aérospatial Air and Space Control

AP Agrément préalable Preliminary Approval

ASA Admission en Service Actif Admission to Active Service

ASF Architecte de système de forces Architect of Systems of Forces

C3R Commandement-Conduite- Command-conduct-communicationcommunications information

CASF Conseil des architectes de système Architects of systems of Council

Forces de forces

CCAG Cahiers des clauses administratives General Administration Specifications

Clauses générales

CEMA Chef d’état major des armées Joined Armed Forces Chief of Staff

CHEAr Centre des hautes études d’armement Center of High Studies in Armament

CIEEMG Commission interministérielle pour Interministerial commission in charge of

l’étude des exportations de matériels examining exports of war materials

de guerre

CPI Code de la propriété intellectuelle Intellectual Property Code

CPPE Commission permanente des Permanent Committee for Programs

programmes et des essais and Tests

DAF Direction des affaires financières Financial Services Directorate

DAJ Direction des affaires juridiques Juridical Affairs Directorate

DCE Direction des Centres d’Expertise Directorate for Expertise and Test Centers

et d’Essais
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DCI Direction de la coopération et des Cooperation and Industrial Business

affaires industrielles Directorate

DCN Direction des constructions navales Directorate for Navy Shipbuilding

DGA Délégation Générale pour l’Armement « The DGA »

DGO Direction de la gestion et de Management and Organisation

Directorate

DIS Dissuasion Deterrence

DPM Direction des programmes, des Program Management, Acquisition

méthodes d’acquisition et de la qualité Methods and Quality Control Directorate

DRI Direction des relations internationales International Relations Directorate

DRH Direction des ressources humaines Human Resources Directorate

DSA Direction des systèmes d’armes Armament Systems Directorate

DSP Direction des systèmes de forces et Forces Systems and Prospective

de la prospective Directorate

EMA Etat major des armées Joint Armed Forces General Staff

EMAA Etat major de l’armée de l’air Air Force General Staff

EMAT Etat major de l’armée de terre Army General Staff

EMM Etat major de la marine Navy General Staff

ENSICA Ecole nationale supérieure d’ingénieurs

de constructions aéronautiques*)

ENSIETA Ecole nationale supérieure d’ingénieurs

Des études et constructions

aéronautiques*)

ENSTA Ecole nationale supérieure des

techniques avancées*)

EP Ecole Polytechnique
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1-83

FCME Fiche de caractéristiques militaires Exploratory Military Characteristics

exploratoires File

IA Ingénieur d’armement Armament Engineer

IEF Ingénieur d’études et de fabrication Development and Production Engineer

IETA Ingénieur des études et techniques Engineer in Armament Studies and

d’armement Techniques

INPI Institut national de ma propriété Intellectual Property National Insitute

Intellectuelle

IPT Equipe de programme intégré Integrated Program Team

IUT Institut universitaire de technologie Technological University

MECI Mise en commun des investissements Investment Sharing

MER Maîtrise du milieu aéronautique Sea and Air Control

MSO Mise en Service Opérationnel Launching of Operational Service

OCCAR Organisme conjoint de coopération Joint Armament Cooperation Office

en matière d’armement

OCEM Officier correspondant de l’Etat major Corresponding Coherence Services

Officer

OCO Officier de concept opérationnel Operational Coherence Officer

OCTAA Officier du corps technique Officer in the Technical or

administratif de l’armement Administrative Corps for Armament

PROF Frappe dans la profondeur Long Range Strike Capacity

PROJ Mobilité stratégique et tactique Strategic and Tactical Mobility

SGA Secrétariat général pour General Administration Secretariat

l’Administration

SGDN Secrétariat général de la General Secretariat for Defense

National Défense nationale
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SMA Service de la maintenance Aeronautical Maintenance Department

Aéronautique

Sup’Aéro Ecole nationale supérieure de

l’aérinautique et de l’espace*)

TER Maîtrise du milieu aéroterrestre Land and Air Control

TSEF Technicien supérieur d’études Advanced Technician in Development

et de fabrication and Production
Part 2 Germany

2-1

PART 2

GERMANY
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-2
Part 2 Germany

2-3

Chapter 1

THE GERMAN

ACQUISITION SYSTEM

of Defense has seen a decrease in the number of

armed forces personnel—490,000 in 1990 to approximately 340,000 today.1

The impact is even

greater when it is recognized that the unification and integration of the

former GDR’s

armed forces happened at the same

time.

The German acquisition system has also

seen changes and with it cuts in manpower, defense budgets and organizational changes. The

defense budgets have decreased from about 55

billion DM at the height of the Cold War to 46.7

billion DM in Fiscal Year 1998. The defense

budget has also decreased as a share of the overall government’s budget from 30 percent during the 1980s to 23.7 percent in 1998. About 27

percent of this budget are funds for military technological research, development, procurement

and maintenance of material, with procurement

representing the largest of this part of the budget at approximately 6.4 billion DM. While the

overall budget has gone down, the operating

expenditures have remained level since 1990

leaving the investment portion of the budget to

bear the brunt of the decrease. The Federal Republic plays a major defense role through NATO

and the Western European Union (WEU), and

with other allies on cooperative armaments

efforts. Germany contributes 28.5 percent of the

Spotlights swirled back and forth across the sky

highlighting the Brandenburg Gate as hundreds

of thousands celebrated the unification of the

German Democratic Republic (GDR) with the

Federal Republic of Germany. It was 1990, and

only the year before the Berlin Wall had fallen

and the Brandenburg Gate opened. Berlin has

since become the capital of Germany. The shift

of ministries from Bonn to Berlin has begun.

The remaining ministries will transition over a

period of years with Bonn retaining many

administrative functions and several ministries.

Russian troops have withdrawn from the GDR,

the western allies’ presence has been greatly

reduced in Germany, and the Euro has been

introduced as the new currency in much of Europe.

It has been a decade of significant changes for

the country that this year celebrated its 50th

anniversary as a Federal Republic on May 23.

The Federal Republic of Germany continues to

change with the election of 1998 ushering in a

change in government after a 16-year coalition

rule by the Christian Democrat Union/Christian

Socialist Union/Free Democratic Party. Gerhard

Schröder of the Social democratic Party (SPD)

and their coalition partner, the Greens, formed

the new government. The German Ministry of

Defense has also seen significant changes during

this decade. The role of the North Atlantic Treaty

Organization (NATO) is in transition, German

defense industry has been downsizing, and

NATO peacekeeping missions continue, all

requiring changes in Germany’s response. Like

most governments around the world, with the

collapse of the communist empire, the Ministry

Germany
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Western European Union (WEU) budget and

pays 22.8 percent of the NATO budget.

The purpose of this section is to provide an

introduction to the German Defense Armaments

Organization and the environment in which it

operates. It will start with a look at the political

environment, the constitutional framework, the

key political entities and the processes involved.

The section will then move to the Ministry of

Defense, looking at its organizational structure,

key players and their responsibilities, and then

the operation of the acquisition process. Project

management, armaments cooperation and arms

sales, defense planning and industrial base issues

will also be discussed.
Part 2 Germany

2-5

Chapter 2

THE GOVERNMENT

OF GERMANY

judges each. The Bundestag and the Bundesrat

elect an equal number of judges. Each judge can

only serve one twelve-year term.

THE FEDERAL PRESIDENT

(BUNDESPRÄSIDENT)

The Federal President is Head of State and

performs primarily a ceremonial role. The current

President is Johannes Rau. He represents Germany in its international relations, concluding

treaties, accrediting and receiving envoys. The

Federal President is neither a member of the

government, nor the Federal and Länder legislatures. He is elected by the Federal Convention

(Bundesversammlung)2

 for a five-year term and

may run for only one additional term. His

primary political role is the appointment and

dismissal of the Chancellor, ministers, federal

judges, civil servants, officers and non-commissioned officers. He also signs laws, but orders

and decrees of the Federal President require, for

their validity, the countersignature of the Federal

Chancellor or the appropriate Federal Minister.

THE CHANCELLOR

(BUNDESKANZLER)

The Federal Chancellor is head of the German

Federal Government3

. He is elected by a majority vote of the Bundestag and is the head of the

majority party (or coalition) in the Bundestag.

The Chancellor selects the ministers to form his

cabinet and proposes them to the President, who

The constitution or “Grundgesetz” (Basic Law)

was adopted in May 1949 as the “provisional”

law pending Germany reunification. The Basic

Law combined the lessons from German experience with the Weimar Republic, the National

Socialist State and the intentions of the Western

powers. It was the foundation for creating a

democratic and social Federal Republic. The

name “Federal Republic of Germany” itself

denotes the country’s federal structure. The

Federal Republic consists of sixteen Länder

(states) including the City-States of Hamburg,

Bremen and Berlin, each with its own powers

and each having significant authority reserved

to themselves.

The Federal Republic’s constitution spells out

responsibilities for the three separate branches—

legislative, executive and judicial. The legislature consists of a bicameral parliament—the

Bundestag and

the Bundesrat.

The executive

function is split

between the

President and the

Chancellor. Details of the legislative and executive branch will

be provided later.

The Federal Constitutional Court is the highest

court in the country with the right to declare

unconstitutional an act of the federal or state

legislatures. The Court is the guardian of the

Basic Law and consists of two panels with eight

Brandenburg Gate
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-6

in turn appoints them. In a coalition government,

such as has existed during most of the last 50

years, ministries are agreed upon in forming the

coalition. As an example, with the current government the Foreign Affairs Ministry, the Health

Ministry and Environmental Affairs Ministry

were reserved for the coalition partner—the

Greens. The cabinet members are then tasked

with managing the ministries, setting policy and

ensuring that it is carried out.

The Chancellor plays a dominant role because

of his constitutional ability to set the general

policy of the government. Not only can he

appoint ministers, but has the authority to

dismiss them. The Chancellor has two primary

roles regarding defense. He sets the general

policy for the government on military issues.

He also has the constitutional “power of command over the Armed Force.” Article 115(b) of

the Basic Law stipulates that upon the declaration of a state of “defense,” national command

of the Bundeswehr is transferred from the

Federal Minister of Defense to the Federal

Chancellor.

THE LEGISLATURE OF

THE FEDERATION

The Federal Parliament is bicameral, consisting

of an Upper House — the Bundesrat and a Lower

House—the Bundestag. The Bundesrat is composed of 68 representatives from the sixteen

federal states. Each state is proportionally

represented in accordance with their population.

In contrast to the senatorial system of the United

States the Bundesrat’s members are representatives of the Länder. The Länder governments

appoint and can recall Bundesrat members.

All constitutionally relevant laws require the

assent of the Bundesrat. This applies especially

to bills that concern vital interests of the states,

for instance their financial affairs or their

administrative powers. No proposed amendments

to the constitution can be adopted without the

Bundesrat’s consent (two-thirds majority). Members of the Bundesrat do not vote as individuals, but rather all votes are cast as a Länder block.

On a percentage basis more than half of all bills

require the formal approval of the Bundesrat.

It is not unusual for the Bundesrat to be

controlled by members from the opposite party

of the Chancellor. During much of Helmut

Kohl’s Chancellorship, the Social Democratic

Party (SDP), controlled a significant number of

Länder parliaments, thus controlling the

Bundesrat. The new German Chancellor,

Gerhard Schroeder currently has a similar problem with the Christian Democrats who now control the Bundesrat. However, the Chancellor

cannot always rely on Länder governments even

when the same party is in power to follow its

lead. Each Länder has its own special interests

and sometimes takes sides with other Länder

irrespective of the party affiliation. This produces fluctuating majorities and compromises

have to be made where the parties forming the

Federal Government do not have a majority in

the Bundesrat.

The Bundestag is composed of 660 seats and is

elected every four years unless elections are

called earlier. The Bundestag is the parliamentary assembly representing the people of the

Federal Republic of Germany. It may only be

dissolved prematurely, under exceptional circumstances, with the final decision lying with

the Federal President.

The primary role of the parliament as it relates

to defense is to pass the yearly defense budget.

It also has the requirement under Article 115a

of the Basic Law to determine whether or not a

state of “defense” exists, i.e., the federal territory is being attacked. This requires a two-thirds

majority of the vote’s cast and the consent of

the Bundesrat.
Part 2 Germany

2-7

Role of Committees

The primary committees that impact the defense

budget are the Committees on Defense and Budget. The committees are structured based upon

the relative strengths of the parliamentary

groups. It is in these parliamentary committees,

particularly in Defense and Budget, that the

parliament scrutinizes and controls the activity

of the Ministry of Defense. The Parliament’s

Defense and Budget Committees evaluate the

federal armed forces equipment requirements

and the suitability of planned measures, the

numerical strength, and general organizational

structure. However, the parliament’s approval

of the budget as submitted by the government is

the norm. Generally, these meetings are not open

to the public. Extensive preparatory work for

legislation is done here. It is in these committees that the work of harmonizing political

philosophy with the detailed knowledge provided by the experts takes place. The budget

committee is of particular importance because

it represents parliament’s control of the budget.

These committees also have the power of

investigation although to this point in time they

have not investigated any defense issues.

All large contracts over 50M DM (>$30M U.S.,

25M Euro) must be approved by Parliament

before contract award. Usually the Director

General of Armaments represents the Ministry

and presents the case for a contract to the

appropriate committees—Budget and Defence.

Depending on the committee’s degree of scrutiny, such presentations/hearings, may be called

repeatedly, until the committee is satisfied with

the information it has received to form a decision basis. If the committee approves the contract, then the FMOD will direct the BWB to

sign the contract. As an example in the first five

month of 1998 the committees approved 20

large-scale projects with a total cost of 7.7B DM.

If there is no committee approval then the matter is elevated for reevaluation at the ministerial

level, involving various ministers such as

Finance or Economics. In rare cases the decision will be elevated to the Federal Chancellor,

as happened in the controversial “Euro Fighter”

decision.

The Budgetary Process

While Bundestag and Bundesrat members may

introduce legislation, the Federal Government

initiates most bills including the yearly defense

budget. Each bill receives three readings in the

Bundestag and is usually referred to the appropriate committee—defense or budget. The final

vote is taken after the third reading. Upon their

adoption, the President of the Bundestag transmits them to the Bundesrat. For many laws the

Bundesrat has a veto right, which might be overridden in the Bundestag with a two-thirds

majority. While they have the authority to override the defense budget for practical and political reasons this has not happened. Given the

German role in European security, its NATO

commitments and the Länder interest in work

being performed in their state the Bundesrat has

not vetoed the defense budget. Figure 1 depicts

the budget process.

In a case where the Bundesrat does not agree

with a bill it may, within three weeks of the

receipt of the adopted bill, demand that a

Committee for Joint Consideration (mediation

committee, vermittlungsausschuss) be convened.

This committee will be composed of an equal

number of members of the Bundestag and the

Bundesrat. While normally the Bundesrat members are required to vote based upon their Länder

guidance, once a mediation committee has been

formed they are not bound by Länder guidance.

If the committee adopts a revised bill, the

Bundestag must again vote on the bill. If it is

adopted, then the committee’s proceedings are

finished. If the Bundestag does not concur, then

the Joint Committee will continue its work until

a bill acceptable to both houses can be drafted.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-8

The yearly defense budget must be passed every

year by the end of December. The new fiscal

year begins on 1 January and parliament normally passes it on time. As part of the yearly

defense budget, the Bundestag will provide the

ministry of defense with full funding budget

authority at the beginning of a program. Unless

the budget authority is breached, the FMOD is

not required to seek further approval from the

Bundestag.

The Cabinet

Articles 62-69 of the Federal Constitution

delineate the role of the Federal Ministers. The

Federal Ministers are appointed and dismissed

by the Federal President upon the proposal of

the Federal Chancellor. The chancellor, as chairman of the cabinet, sets the general policy for

the government. He also determines the number of ministers and their responsibilities. Within

the limits of this general policy, each Federal

Minister conducts the business of his department. However, within this general framework

the minister has significant power to act. Article

65 of the constitution states that “each Minister

conducts the affairs of his department independently under his own responsibility.” In a coalition government the Chancellor must also take

account of agreements reached with the other

party in the coalition. Unlike some other countries, the cabinet members are not members of

the legislative branch of government. This

explains why the German system of government

is often referred to as a “Chancellor democracy.”

The Chancellor is the only member of the government elected by parliament and he alone is

accountable to it.

The Finance Minister plays a key role in deciding budgetary issues—a “first” among equals.

He has the power to veto all decisions of

financial importance including all legislative

proposals with implication for public spending,

provided the Chancellor sides with him. The

Federal Government decides on differences of

opinion between the Federal Ministers.

Figure 1. Federal Government of Germany – Typical Flow of Budget

Cabinet Approved

Draft Federal

Budget Reviewed

by Parliament

Review Changes Cause

Second and Third Readings

Defense and Budget

Committees Review

First Reading of Draft

MOD Budget

Defense and Budget

Committees Review

Fiscal Year

Begins

Federal Budget

Approval

Parliament

Signed into Law

Parliament/Chancellor

and President

July July–Nov Nov–Dec

January 1 Dec Dec
Part 2 Germany

2-9

The German cabinet is currently composed of

16 ministries. They are:

• Minister and Head of the Federal Chancellery

• Minister of Foreign Affairs & ViceChancellor of the Federal Republic

• Minister of the Interior

• Minister of Justice

• Minister of Finance

• Minister of Economics and Technology

• Minister of Food, Agriculture and Forestries

• Minister of Defense (Rudolf Scharping)

• Minister of Families, Senior Citizens, Women

and Juveniles

• Minster of Health

• Minister of Transport, Construction, and

Housing

• Minister for the Environment, Nature

Conservation and Reactor Safety

• Minister of Education and Research

• Minister of Economic Cooperation and

Development

• Minister of State for the Arts at the Federal

Chancellery
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-10

Chapter 3

THE FEDERAL MINISTRY

OF DEFENSE

(BUNDESMINISTERIUM DER VERTEIDIGUNG—BMVG)

The Federal Ministry of Defense (FMOD)

consists of two elements—the civilian Federal

Administrative portion, which includes the

armaments organizations and the military, or

armed forces (Bundeswehr). This civilian Federal Administrative division was created in 1956

when the basic law was amended to direct that

the “The administration of the Federal Defense

Forces shall be conducted as a Federal administration with its own administrative substructure.

Its function shall be to administer matters

pertaining to personnel and to the immediate

supply of the material requirements of the Armed

Forces.” Thus Article 87b of the Federal Constitution mandated the creation of an administrative substructure to the ministry which would

have responsibility for the armaments requirement of the military. Figure 2 depicts the

organizational structure of the FMOD.

In 1991 the Defense Ministry adopted a plan—

“Reorganization of the Territorial Defence

Administration and the Armaments Organization” which reorganized the Armaments Directorate and its subordinate organizations. Its main

purpose was to streamline and reduce the size

of the organization by the year 2000. This is an

ongoing process and changes will be noted

throughout the chapter.

The Bundeswehr

The Bundeswehr, the military portion of the

Federal Ministry of Defense, was established

The Minister of Defense who has responsibility

for commanding the armed forces in peacetime

leads the Federal Ministry of Defense. Two

politically appointed Parliamentary State Secretaries support him. The Parliamentary State

Secretary is a member of the Bundestag and is

concerned with relations and communications

between the defense ministry and the parliament.

The Minister of Defense is also supported by

two civil servants—State Secretaries—whose

primary roles are to provide authority, expertise, leadership and continuity in running the

ministry. Each has specific responsibilities. One

of the state secretaries is primarily responsible

for armament matters.

The State Secretary for Administration has

responsibility for personnel, budgets, administrative and legal affairs, infrastructure, social

services, including oversight of the Federal

Academy of Defense Administration and Technology. The Federal Academy provides armament acquisition and management education to

the workforce, especially to the civilian part of

the FMOD (Wehrverwaltung des Bundes = Federal Arms Forces Administration according to

basic law Articles 87a and b). The State Secretary for Armament and Logistics has responsibility for security and alliance policy, arms control, intelligence and other areas. He is also responsible for armament matters. The Director

General of Armaments reports to him.
Part 2 Germany

2-11

in 1955 and integrated into the Western alliance. The constitution of 1949 required the

establishment of “the Armed Forces for Defense

purposes.” The Bundeswehr senior military

leader is the Chief of Staff of the Armed Forces,

who is supported by a Deputy Chief of Staff.

He is the senior military advisor to the Minister

of Defense and the Chancellor. He is also a nonvoting member of the Cabinet’s Federal Security

Council. He chairs the Federal Armed Forces

Defense Council, which consists of the Deputy

Chief and the Chiefs of the three services. He

exercises “executive authority” over the council.

The Army, Navy and Air Force and the Surgeon

General make up the rest of the Bundeswehr.

(See Figure 2.) The current strength of the

Bundeswehr is about 340,000 military—Army

personnel number 233,400, Air Force personnel 77,400, and Navy personnel 27,200. In a state

of “defense,” total manpower can rise to 700,000

soldiers. The armed forces, while primarily

defensive, recently were restructured to include

a quick reaction force to respond to humanitarian and military situations, such as occurred in

Kosovo.

The Requirements Process

The three military services are similarly organized. Each has a central staff, a C2 Command

for operational planning and mission control, a

support command and an office for central issues

which has the function of a Training, Development and Doctrine Command (TRADOC). For

the Army, this office is the Heeresamt (HA); for

the Air Force, the Luftwaffenamt; and for the

Navy, the Marineamt. The military service staffs

determine military equipment requirements,

provide logistics support, perform operational

tests on new equipment, and maintain the weapons systems. They are involved throughout the

acquisition process.

Figure 2. Organization of the Federal Ministry of Defense

Armament

Directors

Director

Personnel

and

Social

Services

Director

Budget

Director

Admin.

Affairs

Director

Legal

Affairs

Vice

Chief of

Staff

Chief of

Staff,

Army

Chief of

Staff,

Air

Force

Chief of

Staff,

Navy

Surgeon

General,

Bundeswehr

Administration Armed Forces

Chief

of Staff

Armed

Forces

Parliamentary State

Secretary Federal Minister of Defense

State Secretary

Parliamentary State

Secretary

State Secretary
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-12

The requirements process operates and is

roughly organized the same in each Service. In

the Army, the troop schools develop the requirements and present them to TRADOC. In the

other Services, the user, the “exposed commanders,” develop the requirements and present them

to the Support Commands. TRADOC and each

of the Service Support Commands have “study

groups” that take over at this point. Their role is

to check the identified military requirement

against the concepts and planning directives of

the various staffs and commands and to validate

the military need. They will then develop the

document—the Staff Requirement—that

describes the equipment shortage and the military requirements. These study groups also play

a key role during the predefinition phase of

working with industry to obtain information to

determine availability of technology and at what

price. Recently, the Bundeswehr revised the

study groups and now the “Standing Joint Study

Group” brings together the military services

around tactical areas, such as air defense and

command, control and reconnaissance. New

guidelines also place increased emphasis on

evaluating commercial-off-the-shelf equipment.

As indicated above, the Service Staffs are responsible for developing the military requirements.

They work with the Directorate General of

Armaments in the selection of possible solutions

and, as users, participate in the research and technology concept efforts. The Armed Force Staff

performs an oversight role in reviewing requirements and for coordinating matters concerning

communications and electronics equipment.

Army (Heer)

The Training Development and Doctrine

Command, also referred to as the Heeresamt,

located in Cologne, is the Army’s central point

for development of military materiel requirements. Department III in TRADOC, Army

Development, is responsible through the 16-

school commanders for equipment. Materiel

requirements are thoroughly evaluated in the

army study groups for the development of

defense material.

Department II (Armaments/Deployment) of

the Army Staff has the responsibility for representing the Army with the Acquisition

Organization (the BWB to be discussed later)

and industry. It directs the tactical and technical

field evaluations, which are carried out by the

troop schools. Upon demonstration of satisfactory performance, Department II signs for the

Figure 3. Army (Heer)

Chief of Staff

Army

Army Support Command

(Heeresunterstutzungskommando (HUKdo)

Command and Control Command

(Heeresufuhrungskommando (HFuKdo))

Army Office

(Heeresamt (HA))

Division II

Armaments/Deployment

Division III

Army Development

Division I
Part 2 Germany

2-13

acceptance of the equipment as part of the service capability. During the introduction of new

materiel into the field, this command will also

initiate spare parts procurements with the BWB.

They are also responsible for contracting,

through the BWB, for industrial maintenance

services, mostly for overhaul and technical

alterations that are geared toward service life

extension of materiel use.

Navy (Marine)

The Naval Support Command (Marineunterstützungskommando) has responsibility similar to TRADOC for the development of military materiel requirements for new military

equipment. In this role, they are not only responsible for validating the requirements and

developing the Staff Document, but also for

working with the BWB and industry as new systems are developed. They accept the delivered

equipment and perform the tactical and technical field evaluations through a subordinate element, the Naval Service Test Command. The

Naval Support Command also is responsible for

initiating spare parts procurements and maintenance and contracts for the overhaul of equipment. As equipment is in need of modernization

or updates, they will work through the BWB to

contract with industry.

Air Force (Luftwaffe)

The Air Force Support Command (Luftwaffenunterstützungskommando) has a leading role

in planning and armaments. Its subordinate structure includes the Air Force Materiel Command

and six logistics regiments. The Air Force study

Figure 4. German Navy

Naval Support Command

(Marinunterstutzungskommando)

Fleet Command

(Flottenkommando)

Naval Office

(Marineamt)

Naval Communications and

Electronics Flotilla

Submarine Flotilla

Minei Flotilla

FPB Flotilla

Destroyer Flotilla

Naval Air Flotilla

German MoD

Chief of Staff, Navy

Naval Schools and

Training Facilities

Naval Medical Service

Naval Service Test Command

Commanotruppenrersuch

Naval Command and

Control Systems Command

Naval District Commands

North, East and West
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-14

groups develop military requirements. The

Armaments Department of the Air Force Support Command works with the BWB and industry during development of the equipment. They

perform the operational tests for new equipment

and, upon successful completion of tests, they

accept the equipment for service use. They are

also responsible for initiation of spare parts procurements and the maintenance and overhaul of

equipment with the BWB. Modernization and

updates will be accomplished by the Air Force

Support Command through the BWB.

Figure 5. German Air Force

Chief of Staff

Air Force

German Air Force Office German Air Force Command German Air Force Support Command

GAF Tactical Command North

Air Transport Command

GAF Tactical Command South

GAF C1 System Command

1. Air Division 2. Air Division 3. Air Division 4. Air Division
Part 2 Germany

2-15

Chapter 4

THE DEFENSE

ACQUISITION SYSTEM

with NATO, Western European Union and other

European countries, plus military aid and military

supply to international organizations.

The other five offices are oriented along technical and technological lines. Three are specifically focused on Service needs—land, sea and

air materiel—with oversight of the programs

managed by the BWB. The Research and Technology, General Defense Technology Office is

concerned with scientific and technology trends

and basic and applied research for military

applications. The technological revolution has

impacted military operations with issues of

command, control and interoperability. The

Equipment and Technology, Intelligence, Command and Control, Communication (C3), Information Technology (IT) Office is responsible

for oversight and planning in this area, to include

for simulation and Computer Aided Logistics

Support (CALS).4

BWB

The Federal Office of Military Technology and

Procurement, “Bundesamt für Wehrtechnik und

Beschaffung” (BWB), located in Koblenz, was

created over 40 years ago as a “central” interface between the Bundeswehr and industry. The

BWB is under the control of the FMOD, but is a

civil, not a military organization and operates

independently. For most of its history BWB

managed the technical-engineering portion of

the program, and the contractual relationship

with industry. As a result of the 1991 reorganization plan, the BWB has gone from that role to

The Director General of Armaments (DGA) at

the Federal Ministry of Defense is the senior

civil servant responsible for research and development of new technologies, as well as planning, supervision and control of all Bundeswehr

procurement programs. The current DGA is

Dr. Jorg Kaempf, who is also the national

Armament Director and represents the Bundeswehr armaments perspective in national and

international committees.

The Director General is supported by a Director of Armaments Management, a Director of

Defence Technology, and eight staff offices with

approximately 300 personnel as shown in Figure 6. All eight staff offices have responsibility

for oversight, planning and control of their

respective functional areas. The Director

General has overall responsibility for planning,

controlling and supervising defence technology

studies and the development and procurement

of material.

Three divisions are engaged in general tasks.

The Armaments Planning and Control office has

responsibility for administrative control of the

BWB, personnel, funds management, budgets

and finance for the Directorate. The ArmamentsRelated Economic and Legal Affairs Division

has responsibility for economics to include

industrial base issues, legal issues, such as,

patents and copyrights, and contracts. It also has

responsibility for disposal of military equipment

to include East German military equipment. The

International Armament Affairs office has

responsibility for armaments cooperation policy
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-16

the broader role of project management of the

weapons systems programs. The BWB is now

responsible for the definition, development,

engineering, test and evaluation, production and

procurement of military weapon systems.

The BWB, headquartered in Koblenz, has locations throughout Germany, and in the United

States, France and Sweden. In 1998 they spent

approximately 2.5Billion DM for the development and procurement of new systems and

equipment. Currently they employ approximately 16,000 personnel with reduction plans

to bring its personnel strength to 14,000. Five

thousand are located at its headquarters in

Koblenz. The President, currently Herr Dr.

Detlev Petry, heads BWB together with two

vice-presidents—one for Technology and one

for Economics. It has three administrative

divisions. The Central Administrative Affairs

Division (ZA) is responsible for human

resources, personnel, budget, payment of

invoices and general administrative issues. The

Central Economic Affairs (AW) Division is

responsible for audits, pricing policy, cost audits

and policy issues relating to the economy. The

Center for Technology Affairs (AT) is responsible for scientific collection of information,

international cooperation, government quality

assurance, environmental occupation, safety

human engineering and technology relate issues.

Central controlling has responsibility for internal cost control and oversight and inspection of

the acquisition system.

Figure 6. Ministry of Defense – Directorate General of Armaments

Central Controlling

RÜ C

Directorate General

of Armaments (NAD)

Director of Armaments

Management

Director of Defence

Technology

International Armaments Affairs

 RÜ III

Armaments-Related

Economic and Legal Affairs RÜ II

Armaments Planning and

Centralized Functions RÜ I

Research and Technology

RÜ IV

Navy Equipment and Technology

 RÜ VII

Air Force Equipment and Technology

RÜ VI

Army Equipment and Technology

RÜ V

Command, Control, Communications

and Intelligence Equipment and

Technology, Data Processing Systems

RÜ VIII
Part 2 Germany

2-17

There are has seven Technical Divisions responsible for management of weapon systems programs. Organized on the concept of “equipment

principle,” each division has responsibility based

upon the type of equipment, for example, missiles or ships. They acquire, as the division

names indicate, motor vehicles, aircraft and

aeronautical equipment, naval equipment, communication and electronics equipment, weapons,

missiles and information technology. The

Petroleum Oil Lubricants and General Equipment Division acquires clothing, commercial

procurement, medical supplies, food and

nuclear-biological-chemical protection equipment. An example of equipment developed by

this division include the NBC Detection Vehicle

“Fox” (manufactured by Henschel Corporation)

and used by U.S. Forces in Desert Storm.

These offices are responsible for systems engineering, integration, research and technology,

as well as in-service and post–design services.

They also, through their contracts divisions,

award the development or procurement contracts

to industry. It is in these divisions that armament project managers reside. The BWB project

managers play a significant role in reviewing

requirements and when necessary for cost or

schedule reasons, they are vested with authority

to revise or eliminate requirements. Most project

offices, and PMs, have a variety of programs

they are responsible for managing. A typical

Figure 7. Federal Office for Defense – Technology and Procurement (BWB)

FE

Communications

and

Electronics

SG

Ships and Naval

Equipment

Underwater Weapons

LG

Aircraft and

Aeronautical

Equipment

KG

Motor Vehicle

and Equipment

Technology

President

Vice President Technology

Vice President Economy

ZA

Central

Administrative

Affairs

AW

Central

Economic

Affairs

AT

Central

Technological

Affairs

ZC

Central

Controlling

WF

Weapons and

Missile

Systems

IT

Informaiton

Technology

BA

POL and

General

Equipment
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-18

office is staffed with about 20 people, with a

much larger matrix staff available for support.

For large programs, such as the still politically

controversial Euro-fighter—the project office

will be dedicated to only one program. Figure 7

shows the organizational structure of the BWB

headquarters.

The Bundeswehr Research Institutes and Technical Centers, scattered throughout Germany,

and the Naval Arsenal with installations in

Wilhmeshaven and Kiel, comprise the rest of

the armaments organization. (See Figure 8 for

location of research and test centers.) The

Bundeswehr Technical Centers (WTD) main job

is the testing of defense materiel and have

recently begun performing research tasks. The

Bundeswehr Technical Centers (WWD) primarily conduct research in their respective fields

of technology and perform testing of defense

materiel. The Naval installations perform maintenance and repair of German Navy ships. There

is also a German Liaison Office for Defense

Materiel, USA/Canada, located in Reston,

Virginia, with several sub-offices located

throughout the country.

Figure 8. The Bundeswehr Research Institutes and Technical CentersWB)

Bundesamt fuer Wehrtechnik und Beschaffung (BWB) Subordinate Agencies

Defense Engineering Agencies/

Proving Grounds (WTD)

Automotive and Armored Vehicles

WTD 41 – Trier

Engineer and

General Field Equipment

WTD 51 – Koblenz

Explosives and

Special Technologies

WTD 52 – Oberjettenberg

Aircraft

WTD 61 – Manching

Ships and Naval Weapons

WTD 71 – Eckernforde

Communicaitons and Electronics

WTD 81 – Greding

Weapons and Ammunition

WTD 91 – Meppen

Research Centers/

Scientific Agencies

Institute for Materials Testing

MIM – Erding

Institute for Protection Technology

NBC

Protection

WIS – Munster

Institute for Underwater Sound

and Geophysical Research

FWG – Kiel

Ships and Naval Weapons

WTD 71 – Eckernforde

Communicaitons and Electronics

WTD 81 – Greding

Weapons and Ammunition

WTD 91 – Meppen

Naval

Arsenal

MArs

ArsBetr – Kiel

MArs

ArsBetr – Wilhelmshaven

German Liaison Office

for Defense Materiel

USA/Canada

DtVStRu USA/CA

Berlin Office of BWB
Part 2 Germany

2-19

Chapter 5

THE PLANNING, PROGRAMING,

BUDGETING SYSTEMS

of need into definable requirement. The final

plan is the Bundeswehr Plan (Bundeswehrplanung), which provides the military needs to

include military equipment and weapons systems. A project must be scheduled in the

Bundeswehr Plan to become a part of the annual

program. This becomes the basis for the annual

budget estimate.

The Bundeswehr Plan is prepared in December

by the Federal Ministry of Defense. The Ministry of Finance provides the budget guidelines in

late December to the cabinet. From December

until March, the Armaments Directorate and

Services develop the budget needs and prepare

a consolidated budget for military systems and

equipment. The FMOD Budget Directorate then

submits the draft budget to the cabinet. The Ministry of Finance reviews the Draft Defense budget and the Federal Cabinet’s coordination is

obtained. Finally in July, the cabinet approves

the budget and submits it to the Parliament for

its review process. The FMOD portion of the

budget process takes approximately eight

months. (See Figure 9.) This is a relatively stable

process with few changes occurring in the budget of the weapon system programs once the

government has committed to a program.

Military planning is done in a series of strategic

and tactical documents that lay out the armed

forces planning for a period of 5 years—midterm, and 15 years—long-term. The overarching

document is the Defense Policy Guidelines,

(Verteidigungspolitische Richtlinien—VPR).

This document describes the current and foreseeable (15 years) political, economic, and military conditions, to include risks and threats. It

then describes the defense policy and structure

necessary to address these issues. Its goal is to

provide defense planners with stable financial

and structural strategic assumptions. The

Defense Policy Guidelines are prepared by the

Planungsstab (Planning Staff) of the BMVg and

endorsed by the Federal Minister of Defense.

From this document are derived the Military

Strategic Objectives (Militarpolitische Zielsetzung) which provide a framework for the

development of concepts, mission definitions

and a set of goals necessary to accomplish them.

The next document is the Bundeswehr Concept

(Bundeswehr-Konzeption) which prioritizes

tasks needed to accomplish the military strategic concepts and the design of the forces necessary to meet mission needs. The Planning Guideline then translates the threat-oriented statements
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Figure 9. Federal Ministry of Defense – Typical Flow of Budget

Programme Negotiations

Consolidated Budget

Estimate Armaments

Directorate/Services

to Budget Directorate

Budget Guidelines

Distributed by

Ministry of Finance

Draft Budget

Prepared

MOD Budget

Directorate

Cabinet Approval

of Budget

Draft Defense

Budget Integrated

into Draft Federal

Budget by Ministry

of Finance with

Cabinet Coordination

Cabinet Approval

of Budget

Bundeswehr Plan

Prepated by

FMOD

Dec Dec Dec–Mar

Jul Jul Apr–Jul Mar–Apr
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Chapter 6

THE ACQUISITION

MANAGEMENT PROCESS

for cost, schedule and performance. The governing document for the development of a

program is contained in the “Directive for the

Planning, Development, Procurement and,

Acceptance of Defence Materiel and Data Processing Projects” (Bestimmungen für die

The basic requirement for new military systems

and equipment comes from the military services

as described above. The annual program, which

is prepared each year as part of the budget process by the Directorate General of Armaments

for the Services, provides the program targets

Figure 10. EBMat Weapons Systems Development Process

• Tactical Concept

Document:

Tactical/Technical Requirement (RRF)

Document:

Final Report (ASB)

Pre-Phase

Definiiton Phase

Development Phase

Procurement Phase

In-Service Phase

• Final Specificaitons

• Selection of the Prime Contractor for the

Development Phase

• Clearance for Production of Ships

• Certificate of Functional Readiness and

Operational Safety

• Certificate of Logistic Support Capability

• Certificate of Technical Qualification

• Design Freeze

• Certificate of Operational Use

Document:

Military, Technical and Economic

Requirement (MTWF)

• Selection of the Prime Contractor for the

Procurement Phase

Document:

Approval for Introduction into Service

(EFG)
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Planung, Entwicklung und Beschaffung von

Wehrmaterial und Datenverarbeitungsvorhaben

(EBMat).

Figure 10 depicts the EBMat weapons systems

development process. It consists of five phases

beginning with the Pre-Definition phase and

continuing through the In-service phase. At the

end of each phase, and to reduce risks, a decision and approval is required as to whether and

how, the program is to be continued.

Pre-Phase

During the Pre-definition phase the military need

is verified by the Services. The Tactical Concept comprehensively describes the equipment

shortage and the military requirement. An early

market evaluation is performed and national and

foreign alternatives are considered as part of this

phase. This evaluation is conducted by the

FMOD/BWB with both the military and industry participating. In 1998 the EBMat process was

revised with new principles for acquiring equipment. The new principles place increased

emphasis on the affordability of systems and

equipment and for streamlining the process. A

priority list of materiel alternatives is given. They

are:

• Recommend no action, thus accepting an

equipment gap,

• modification and extended use of materiel already in service,

• purchase or integration of available materiel

(civilian, commercial and from other armed

forces), and

• new development (national or international).

 Once the alternatives have been defined and the

economic impact estimated, then the Staff

Requirement (Tactical/Technical Requirement,

Taktisch/technische Forderung-TTF) is prepared

and that phase is concluded with a proposal or

the selection of a tactical-technical solution. The

Bundeswehr Chief of Staff is the approval

authority for Tactical Concepts that have importance for more than one service/international

cooperation, and exceed the cost ceiling of 24M

DM for development and 50M DM for procurement. For projects that have political or economic

importance and exceed 20M DM for development and 50M DM for procurement the FMOD

executive group receives an informational notice.

For Information Technology (IT) projects the

Pre-definitional phase document for completion

is called the Organizational Staff Requirement.

The Ministry staffs, along with the Armament

Division, then review the TTF. Once this is

approved the program is introduced in the

Bundeswehr Plan.

Definition Phase

The next phase, the Definition Phase, is the point

that project management responsibility is

delegated to the BWB. During this phase the

final specifications will be completed by the

BWB. Industry is usually involved at this point,

but care is taken to ensure that activities performed during this phase do not prejudge a

subsequent competitive contract award.

It is also during this phase that the project

manager and team working groups are established to include all those responsible for

technical-engineering issues at the BWB. These

working groups are vital partners for cooperation with industry. The military services will

assign a project officer from the support command to represent the service branch priorities

within the project managers’ working groups.

Joint project conferences are held for joint

decision making and coordination talks between

the BWB and the service branch. (See Figure

11.)
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The Definition Phase is finished with the

completion and approval of the “Development

Baseline” (Militarisch-Technisch-Wirtschaftliche Forderung, literally translated as “MilitaryTechnical-Economic Requirement”). For complex programs, or projects of political importance (e.g., cooperative programs), or where the

development cost estimate will exceed 20 million DM, or procurement cost will exceed 50

million DM, the executive level FMOD approval

is required.

Development Phase

The next phase is the Development Phase. The

selection of the prime contractor occurs during

this phase. The development contract will define

the contractor’s responsibilities, including the

generation of materiel baselines, service and

logistics capability. Its initial operational

capability and logistic supportability trials will

be performed in this phase. While the BWB will

conduct the development efforts, the Armed

Services are responsible for certifying to the

systems logistics supportability and for the

successful completion of operational testing and

“Approval for Service Use.” The development

phase is concluded with approval of the document “Approval for Production” (Einführungsgenehmigung-EFG).

Procurement Phase

The next phase is the Procurement Phase, which

includes all activities necessary to execute series

production, to include selection of the contractor for the procurement phase. It is concluded

with the delivery of the production equipment

Figure 11. The Definition Phase

Directorate General

of Armaments

Directorate General

of Armaments

Program Manager Program Officer

Technical Supervision/

Project Supervision

(Controlling)

Technical Supervision

(Controlling)

Requirements and

Military Aspects)

BSB/Service

Office Level

MOD

BWB

Reporting

Armed Service

Command/Office

of the Single

Manager*

Reporting

Management

Organization Reports

and Data

Maintenance Project Conference

Management Organization Elements

Reports

and Data

Maintenance

Directives Directives

Working Group

of the

Program Manager

Working Group

of the

Program Officer
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-24

to the military and preparation of a Final Report

by the BWB.

In-Service Phase

With the first delivery of equipment, the InService Phase begins. The user now takes

responsibility for the equipment, assigning an

in-service manger responsible for ensuring the

operational capability of the system or equipment. The Services prepare for initial operational

capability by setting up at their service schools

systems/equipment specific training, maintenance and field operations, and core units of

school personnel for the training of field user

units’ personnel. The service schools are usually the first to receive production equipment.

The support and logistics commands go through

the sometimes lengthy process of system/

equipment documentation (maintenance manuals,

spare parts list, etc.) to integrate the new system/

equipment into the services’ inventory. While

primary responsibility rests with the Services,

the BWB continues to provide engineering and

logistical support. BWB will buy the spare parts,

conclude repair contracts and develop and

incorporate changes for equipment deficiencies

and operational improvements. Of course, in

some cases the changes can be significant

enough to begin the EBMat process all over again.

The individual phases described above provide

a structured approach for producing equipment.

Simplification of the process can often occur

with overlaps between development and production allowed, when appropriate, if risks remain

within acceptable limits. Programs will progress

through the various phases at different speeds

depending upon the technology and speed of

development.

Designation of Programs

There are three categories of systems/equipment:

Category 1 includes those systems with a value

greater than 20M DM in development and

greater than 50M DM in production. These

systems require approval by the Bundestag.

Category 2 (2-20M DM for development, 5-50M

DM for production) receives approval with the

Armed Service Command within the military

services. Category 3 programs are lower dollar

programs for items with a development cost of

less than 2M DM and 5M DM for production.

Category 1 is considered a major program. The

FMOD will designate a complex program or a

program, which involves a cooperative effort

with other countries as a major program.
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Chapter 7

DEFENSE ARMAMENTS

WORKFORCE

and International Program Management. Most

of the training is performed on-the-job with

various short courses or seminars available on

special acquisition topics, such as value engineering and earned value. There is a typical

acquisition oriented career path for both the military and civilian workforce. Practically every

civilian entering this career path already has, as

a minimum, the equivalent of a Bachelors

degree. For acquisition personnel equivalent to

a GS-13 or field grade officer rank on up it is

mandatory to have the equivalent of a Master’s

degree. The military receive acquisition-related

training on-the-job, and at their schools, including the two Bundeswehr Universities in Munich

and Hamburg. At least one German civilian

university, the Friedrich-Alexander University

at Erlangen-Nürnberg, offers course and

seminars in defense economics and acquisition

topics.

The program managers come from the BWB.

The involved service Support Commands appoint a staff officer as the program officer to

work as part of an Integrated Project Team with

the BWB. On the side of the Field of Armament

(Rue = Armament Division, BWB, Support

Commands) basic acquisition education is done

at the Federal Academy for Defence Administration and Military Technology located in

Mannheim. The basic education for the engineers/technicians is a seven-month program,

which is part of an overall two-year post-graduate course of study. Further education—aimed

at the various program managers—civilian as

well as military—is currently a four-week course

entitled “Program Management for the Armament Sector.” Examples of major subjects taught

by the Academy are: Program and Project Management; Acquisition Process; Equipment

Design and Engineering; Contracting; Procurement; Government-Business Administration;
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Chapter 8

THE PROCUREMENT

PROCESS

education.5 The “regulations” governing procurement for the BWB is contained in a series

of documents, which describes the terms and

conditions for the various types of contracts.

They are listed in Figure 12.

Procurement of military equipment and technical services is centralized within the BWB for

efficiency. Annually, it responds to 40,000 to

60,000 procurement requests to place contracts

for research and development, studies, initial and

follow-on production of defense material, equipment, fuels and other items. Additionally, the

individual services buy the following items most

logically procured locally—food, consumables,

operations and maintenance of military bases.

There are several types of contracts (or pricing

mechanisms) used by the BWB, but the most

frequently used are fixed price and cost reimbursement, although the preference is to use

“...with regard to price and performance, your

products have to meet Bundeswehr requirements

better than those of your competitors.” Friedrich

Steinseifer, retired TRADOC Deputy Director,

captures the philosophy of the FMOD’s procurement policies. The goal is to achieve the market

price for military equipment based on a fair,

transparent and open competition. The Armaments-Related Economic and Legal Affairs

Division sets the procurement policy for the

FMOD. The Bürgerliches Gesetzbuch or civil

code is the governing law for all BWB contracts.

Based upon Roman Law and the Napoleonic

Code, German civil law is codified, unlike the

more common practice in the U.S. and the

United Kingdom, of judicially-created law. Thus

the regulations governing acquisition are

relatively few in numbers and not subject to a

great deal of interpretation. It is interesting to

note that of the approximately 150 contracting

officers in the FMOD almost all are lawyers by

Vol/A – General Terms for Placing Contracts (VOL/A)6

Vol/B7 – Terms and Conditions for Placing Public Contracts, Part B

ZVB/BMVg – Supplementary Conditions of the Ministry of Defense to Vol/B

ABBV – General Terms and Conditions for Procurement Contracts of the Ministry of Defense

ABEI – General Terms and Conditions for Ministry of Defense Development Contacts with

Industrial Firms

ABR – General Terms and Conditions for Ministry of Defense Research Contracts with Industrial

Firms

AAB – General Terms and Conditions for the Delivery of Supplies, Goods and Services

Figure 12. Types of Procurement Contracts
Part 2 Germany

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fixed price. Fixed price falls into two categories. In the first category where risk is low and a

comprehensive calculation of the price is supported by the contractor, the price is set at the

beginning. Where risk is higher, such as early

in the first production of a new item, the “fixed

price” is set as a ceiling. Should the cost be less,

then payments will be restricted to the amount

spent. For very high risk programs a Cost Plus

contract will be used which will cover the development and production costs, but will limit

the contractor to a fixed profit.

The BWB, for highly complex decisions, uses a

formal, and transparent, evaluation procedure

to make the decision on the selection of the winning company. The preferred method of acquisition is through a formal process of Public Competitive Bidding. Since this does not always lend

itself to buying weapon systems, other methods

are used. For those items where a high level of

quality is demanded or for other technical reasons,

Restricted Bidding is used. When Restricted

Bidding is used, a select number of companies,

chosen under formal procedure, will be

requested to submit bids. The winning company

will be selected based upon its technical competence, efficiency and reliability and economic

factors. Finally, in some cases, the BWB will

non-competitively select a contractor because

of its special expertise or technical capability.

In every case where a sole source approval is

required, the Federal Office for Economics

(Bundesamt für Wirtschasf) located in Eschborn,

will be involved in sole source approval. This

office may nominate qualified firms (in coordination with the Contact Advisory Agencies of

the Länder). These Advisory Agencies will have

conducted market research on behalf of the

public customer to determine the availability of

sources. The Advisory agencies provide:

• absolute neutrality in selection (thus fair and

equal treatment);

• regional economic conditions considered; and

• even distribution of orders

To ensure fair treatment of companies in the

selection process, protests of awards will use the

European Union procedures, i.e., an independent group will evaluate the merits of the protest.

In some cases, the Western European Armaments

Group will be used as the forum for the protest.

This is an indication of the increasingly important role that European award and information

procedures are playing in Germany.

After the contract has been awarded by the BWB

to a contractor, the BWB also will manage the

contract. For matters of audit the BWB has the

authority for aeronautical and naval equipment,

as stipulated by contract clause, to audit contractors’ records. For other types of equipment

the individual Länder will perform the audit.

The Federal government also has designed

several socio-economic programs for award of

contracts to small businesses, companies in the

eastern Länders and for other firms that hire the

disabled to include handicapped and the blind.

These programs allow acceptance of other than

the lowest prices. The guiding principles for

placing Bundeswehr contracts further oblige the

procurement authorities that for large contracts

the selection criteria for the prime contractor will

include the involvement of small business firms.

This obligation also aims at creating new jobs,

economically important in view of the current

unemployment rate of over 11 percent.
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Chapter 9

TRIALS AND OPERATIONAL

SUITABILITY

the BWB project manager to ensure contractual

requirements are being met. The military service

schools and users will conduct the operational

capability and logistics supportability trials to

ensure the equipment meets the service requirements. The military will establish a test team

made up of warfighters and engineers for each

system or piece of equipment being procured.

They will verify system performance. If all tests

are accomplished satisfactorily a “Certification

of Operational Use” is provided. A final trial

report is also prepared, identifying any deficiencies. This plan will be forwarded to the State

Secretary for Armaments. What happens when

deficiencies occur? While problems may occur,

and have, once the system has met contractual

requirements it will be acquired and entered into

the inventory. Deficiencies that have been

identified will become the service responsibility to budget and plan for future modifications

to correct the deficiency during service life

extensions.

In the past few years, the trend has been to combine these trials in so-called “integrated trials.”

This kind of direct cooperation between contractor, BWB and the military services often

results in quicker delivery of equipment at less

cost and increased quality.

The organizational structure for conducting

testing within the German system is different

among the services. The Army and the Air Force

Support Commands conduct tests by creating

“test teams” for each new piece of equipment

that has passed testing by the BWB. Once the

tests are complete the team will be disbanded.

The Army Support Command, Office of Armament/In-Service Management Divisions Policy

Doctrine and General Activities has responsibility for troop testing. The testing scenarios are

agreed to between ASC and BWB during

program conferences. The Navy has a standalone organization within the Naval Support

Command, the Commandotruppenversuch,

located at Eckerforde in northern Germany,

which has responsibility for planning and conducting trials prior to fleet use. This organization will develop a test plan (truppenvesruch

plan) during the development process.

Every weapons system or piece of military

equipment acquired by the BWB goes through

a series of trials—engineering trials, technical

testing, troop trials and logistics trials—to ensure

its capable for service use. These trials start with

the contractor’s trials as it develops the system.

Technical-engineering trials are performed next

at the BWB Test Centers under the auspices of
Part 2 Germany

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and the Ministry of Foreign Affairs play a role

in the consideration of a cooperative program.

The Armament Organization and the Bundeswehr participate in a variety of bilateral and multinational defense development and procurement

activities. Over the years there have been a variety of forums where cooperative programs have

been addressed. One of the earliest ones was the

FINABEL, founded in 1958 between army

chiefs of France, Italy, the Netherlands, Belgium

and Luxembourg. Later Germany, Great Britain, Spain and Portugal and Greece joined. The

current major NATO armament forums provide

Germany with additional opportunities to participate in cooperative programs. The NATO

committees are:

• NATO Armaments Committees,

• NATO Naval Armaments Group (NNAG),

• NATO Air Force Armaments Group

(NAFAG), and

• NATO Army Armaments Group (NAAG).

Germany is also a key participant in European

Armament Committees. These include the Western European Armament Group (WEAG), the

Western European Armament Organization

(WEAO), and the OCCAR (Organisme Conjoint

de Cooperation en Matière d’Armement) Joint

Armament Structure. Germany is also a participant in a number of bilateral programs.

Chapter 10

MULTINATIONAL ARMAMENTS

AND ARMAMENT SALES

“Armaments Cooperation also is an integral

element of political cooperation and joint military planning. Moreover, armaments cooperation offers the best possible use of economic and

technological resources.”8 Notwithstanding

changes in the political and military situation in

Europe over the last ten years—the fall of the

Berlin Wall, the Warsaw Pact disintegration and

the developments in central Europe—cooperative armaments programs continue to be a key

part of the Bundeswehr armament planning.

Recent budget cuts, smaller quantities of equipment being bought, technological advances and

costs all contribute to the need to continue armaments cooperation. By some estimates 70

percent of the major Bundeswehr programs have

been cooperative programs.

The export market is also important for the

defense industry. For example in the land weapons industry sector the military spends about 5B

DM per annum while the international market

sales are about ten times the home market.

The Office of International Armaments Affairs

in the FMOD Directorate General Of Armaments has overall responsibility for armaments

cooperation. In the BWB responsibility for

international armaments cooperation is assigned

to the BWB project manager. The service staffs

will assign their own international armaments

affairs office to the project. The major players

are the military users, armaments and procurement authorities and industry. With the magnitude of funds involved in armaments cooperation,

both the Ministry of Economics and Technology
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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The basic German policy on arms sales is that

such sales must be in the vital national interests,

to include political security considerations. The

Government will not approve the sale of equipment where it will contribute to civil war, human

rights violations, or contribute to armed conflicts in a region. The political principles covering the arms sales are outlined in the “Political

Principles of the Federal Government for the

Export of War Weapons and other Military

Equipment” issued 28 April 1982. Currently, arms

exports to NATO countries are not restricted.

This includes countries such as Sweden, Switzerland, Austria, Finland, Japan, and Australia,

and New Zealand which are treated as NATOlike. Export to a third category of countries is

permitted only in exceptional cases.

The Grundgesetz, Article 26, provides the constitutional foundation for German arms export

policy. Article 26 states, “Weapons designed for

warfare may be manufactured, transported or

marketed only with the permission of the Federal Government. A Federal Law will regulate

details.” The War Weapons Control Act and the

Foreign Trade and Payments Act provide the

procedures and policies for arms exports. This

Act was passed in 1961 and prohibits nuclear,

biological and chemical sales. Conventional

weapons sales (production, purchase, and transport) require approval to be obtained from

various ministries to include, the Ministry of

Defence, the Ministry of Foreign Affairs and the

Federal Export Office prior to action. The War

Weapons List, an annex to the regulation,

includes 62 items, such as, rockets, missiles and

tanks. Equipment is included only when it has

gone past the research stage and becomes a

prototype.

The Foreign Trade and Payments Act—passed

in 1961— covers other equipment, such as, sport

and hunting weapons, chemical, certain machine

tools and plants for the production of defense

equipment and other military equipment. The

Federal Export Office (BAFA – Bundesausfuhramt), in coordination with NATO COCOM,

maintains an Export Control list for these types

of items. This office, part of the Ministry of

Economics and Technology, is the licensing

authority. BAFA has responsibility for:

• Foreign Trade and Payments Act, Foreign

Trade and Payments Regulation, EC-DualUse Regulation,

• Control of the export of armaments and dualuse goods (include technology),

• Granting of export licenses (to include

nuclear),

• Decision on applications for International

Import Certificates, and

• Participation in EU bodies and international

export control regimes.

However, if the equipment has a military use,

then the Armaments Division will be the approving authority. For political assessment of these

export applications the Ministry of Foreign

Affairs and the Ministry of Defense will always

be involved.
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Chapter 11

THE DEFENSE

INDUSTRIAL BASE

two categories. Large shipyards owned by two

companies—the Thyssen Group with shipyards

in Hamburg and Emdenand, and the Preusaag

Group with a shipyard in Kiel. Smaller shipyards

are located in Lemwerder, Bremen, and Wolgast.

In the Aerospace sector there are five companies that are considered the major suppliers of

equipment to the Bundeswehr. They are:

• Alcatel Air Navigation Systems GmbH,

• Allied Signal Aerospace GmbH,

• Bodenseewerk Gerätetechnik GmbH,

• Daimler Chrysler Aerospace, and

• Deutsches Zentrum für Luft und Raumfahrt

e.V. (DLR).

The German electronics industry employs over

860,000 people and is one of the largest in the

country and the third largest in the world, trailing

only the US and Japan. The leading companies

in this sector are:

• Siemans AG Defence Electronics Group,

• STN Atlas Electronicsik GmbH,

• ESG Electroniksystem und Logistic GmbH,

• Diehl GmbH Luftfahrt Elektronik, and

• AEG Elektronische Röhren GmbH.

The German defense industry is privately owned

and has been from the beginning.9

 For a variety

of reasons—political and economic—the German defense industry is not separable from the

commercial industry. The economics of the size

of the defense budget and the political concern

of a highly visible defense industry have contributed to the defense industry remaining part

of the overall German industry. The strength of

most of these businesses is in their commercial

operations and defense production accounts for

a limited percentage of their sales revenue. In

1998 over 100,000 (see below) people were

employed in these industries10. This reflects a

decrease of 57 percent from the end of the cold

war. The defense industry can be broken down

into several different sectors—Land, Naval,

Aerospace, Electronics and Software. Each sector has at least two-to-six prime producers. In

the land sector, for example, five companies are

the leaders in providing systems and equipment.

They are:

• Henschel Wehrtechnik GmbH,

• Krauss-Maffei Wehrtechnik GmbH,

• KUKA Wehrtechnik AG,

• Mak System GmbH, and

• Wegmann and Co. GmbH.

The German naval shipyards have depended

upon the sale of exports to keep them in business. The German ship industry can be fit into
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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The German industry has been hit hard by the

significant decrease in procurement deutschmarks spent. In 1991, Germany spent 6.1billion

deutschmark. By 1998 this had dropped to 2.3

billion DM. This has led to considerable discussion of mergers and consolidations. Restructuring has primarily occurred in the aerospace

sector. In 1995, DeutscheAerospace became

Daimler-Benz Aerospace, which includes about

80 percent of German industrial capabilities in

aerospace. At the same time, European governments have taken several initiatives to integrate

the defense market, including the formation of

two new organizations—Western European

Armaments Organization (WEAO) and the Joint

Organization for Cooperation in Matters of

Armament (OCCAR)11 —to improve armament

cooperation. Cooperative programs have long

been viewed as the impetus for cross-border

defense cooperation at the industry level. Several

defense firms, however, have initiated crossborder mergers that are not tied to government

cooperative programs. While much discussion

has taken place, national sovereignty issues and

complex ownership structures have inhibited

defense industry consolidation across national

borders.
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Chapter 12

FUTURE OF DEFENSE

ARMAMENTS

BWB will continue to downsize, but slowly, with

continual emphasis on the need to work

collaboratively with European nations, NATO

and the United States. The excess of defense

firms in Europe will impact European Union and

German efforts at lowering the cost of weapon

systems. With defense budgets that will continue

to decline, and more than 750 defense contractor in Europe, which is three time the current

number in the United States, mergers will

continue. Daimler-Chrysler Aerospace is an

example of the possible transatlantic mergers.

In conjunction with industry efforts six European nations including Germany pledged to

support industrial consolidation. German industry will continue its downsizing, with less than

100,000 personnel supporting the defense needs

of the Bundeswehr

Internationally, NATO will continue to be a keystone of the German defense framework, along

with the Western European and European

Unions efforts in structuring a more European

security policy and collaboration in the development of defense equipment. A significant step

was taken in this direction when the European

Nations, as part of the European union, appointed

Javier Solana as the Secretary General of the

European Union council of Ministers and High

Representative for the Common Foreign and

Security Policy of the Union. This increases the

probability of future cooperative projects being

undertaken within the structure of OCCAR and

significant European harmonization of security

policy.

The German military has seen significant

changes in the last ten years with its restructuring and downsizing in personnel and budgets.

What will be the status of the acquisition system in the year 2005. Change is a certainty. Seeing a need for change the FMOD chartered a

commission on “Common Security and the Future

of the Bundeswehr” to develop a long range plan

for the future of the Bundeswehr. It is expected

they will report out in the fall of 1999.

What is the overall political/military environment the commission is looking at? First, the

mission has changed. Faced with the Soviet and

Warsaw Pact threat the defense of the nation was

the primary focus of Bundeswehr for the last 30

year. Now the Bundeswehr must prepare for humanitarian missions and to regional threats, such

as Kosovo. The Bundeswehr created the Rapid

Reaction Forces to respond to the new mission

requirements. But futures equipment needs will

need to reflect this change. As an example the

need for a rapid transportation of personnel

would indicate that a Future Large Aircraft

would become a priority for acquisition. Secondly, the Bundeswehr will respond under the

auspices of the United Nations, NATO or the

Organization for Security and Cooperation in

Europe (OSCE). Internally, the general political environment will continue to put pressures

on the defense budget. Adequate money will

probably not be available to meet the overall

modernization needs of the Bundeswehr.

Within this framework the Bundeswehr acquisition system will remain relatively stable. The
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-34

FURTHER READINGS

See BWB Homepage at:

http://www.bwb.org/english/index-e.htm

See Bundeswehr Homepage at:

http://www.bundeswehr.de/
Part 2 Germany

2-35

ENDNOTES

1. German civilians were 234,000 in 1990.

Current plans for 2000 is to be at 141,000.

2. Bundestag members and equally many delegates from the Länder form the Federal

Convention.

3. Federal Government consists of the

chancellor, cabinet and ministers.

4. As this chapter is being written additional

organizational changes are planned but not

yet implemented.

5. Kaitz, Dr. Edward and Dr. Kurt R.

Jankowsky “The Effects of a Scale-Down

In Defense Budgets, Vol II German Industrial Organization,” DSMC Press, 1995,

Page 6-17.

6. Provides guidance, similar to the Federal

Acquisition Regulation in the United States,

to the BWB procurement specialist.

7. Verdingungsdordnung für Leistungen

(VOL/A&B), Zusätzliche Vertragbedingungen (ZVB).

8. Klaus Bosse and Wolfgang Hermann

Directors of Rü III in CPM Forum Series,

“Defence Armament and Logistics in Germany,” Published by CPM Communication

Presse marketing GmbH, Sankt Augustin,

Germany 1998, page 24.

9. Some Länder and Städt have become shareholders in shipyards and aviation industry.

10. Statistics office BWB.

11. In French – Organisation Conjointe de Cooperation d’Armenment (OCCAR).
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

2-36

GLOSSARY

 Aktiengesellschaft Corporation, Public Limited Company

Allgemeine Bedingungen für Beschaf- General Terms and Conditions for Procurefungsvertraege des Bundesministeriums der ment Contracts of the Ministry of Defense

Verteidigung (ABBV)

Allgemeine Bedingungen für Entwick- General Terms and conditions for Ministry

lungsvertraege mit Industriefirmen (ABEI) of Defence Development Contracts with

Industrial Firms

Allgemeine Bedingungen für Forschung General Terms and Conditions For Ministry

mit Industriefirmen (ABR) of Defence Research Contracts with

Industrial Firms

Allgemeine Auftragsbedingungen (AAB) General Terms and Conditions for the

Delivery of Supplies, Goods, and Services

Bestimmungen für die Planung, Entwicklung Directive for the Planning, Development,

und Beschaffung von Wehrmaterial und Procurement and Acceptance of Defence

Datenverarbeitungsvorhaben, (EBMat) Materiel and Data Processing Projects

Bundesakademie für Wehrverwaltung and Federal Academy of Defence AdministraWehrtechnik tion and Technology

Bundesamt für Wehrtechnik und Federal Office for Military Technology and

Beschaffung (BWB) Procurement

Bundesamt für Wirtschasft Federal Office for Economics

Bundesausfuhramt (BAFA) Federal Export Office

Bundesministerium der Verteidigung– Federal Ministry of Defense (FMOD)

(BMVg)

Bundeswehr Federal Armed Forces

Bundeswehr-Konzeption Bundeswehr Concept

Bundeswehrplanung Bundeswehr Plan

Bürgerliches Gesetzbuch Civil Code

Einführungsgenehmigung–EFG Approval for Production

Gesellschaft mit Beschraenkter Haftung Private Limited Liability Corporation

(GmbH)
Part 2 Germany

2-37

Grundgesetz Basic Law/Constitution

Hauptabteilung Rüstung Directorate General of Armaments

Heer Army

Heeresamt Army Office

Heeresfuehruengskommando Army Support Command

Kommandobehoerde fuer Ausbildungs- und Training, Development and Doctrine

Einsatzgrundsätze Command (TRADOC)

Länder Federal States

Luftwaffe Air Force

Luftwaffenamt Air Force Office

Luftwaffenunterstützungskommando Air Force Support Command

Marine Navy

Marineamt Navy Office

Marineunterstützungskommando Naval Support Command

Militaerisch-Technisch-Wirtschaftliche Military-Technical-Economic RequireForderung ment–Development Baseline

Militarpolitische Zielsetzung Military Strategic Objectives

Planungsstab Planning Staff

Rüstungsbereich (Rü) Armament Department

Taktisch/technische Forderung-TTF Tactical/Technical Requirement

Verdingungsdordnung für Leistungen Terms and Conditions for Placing Public

(Vol/B) Contracts, Part B

Verdingungsdordnung für Leistungen Terms and Conditions for Placing Contracts,

(VOL/A) Part A

Verteidigungspolitische Richtlinien—VPR Defense Policy Guidelines

Wehrtechnisch Dienststelle (WTD) Bundeswehr Technical Center

Wehrwissenschaftliche Dienststelle (WWD) Bundeswehr Research Center/Institute

Zusätzliche Vertragbedingungen Supplementary Conditions of the Ministry of

(ZVB/BMVg) Defense to Vol/B
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Part 3 United Kingdom

3-1

PART 3

UNITED KINGDOM
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-2
Part 3 United Kingdom

3-3

Chapter 1

HISTORY AND TRADITIONS

the three key components in the legislative process. The monarch’s role is to sign or give Royal

Assent to all legislation passed by both

Houses of Parliament. She opens

and dissolves

Parliament

and she

makes

treaties

with foreign states,

creates peerages and makes

top appointments in the civil service, the armed

forces and the judiciary. But all these powers

are exercised in name only and she is now constitutionally bound by convention to take advice

from the Prime Minister.

Many would argue that the sovereign’s position

is only ceremonial, and while the government

is in office and supported by a majority in the

House of Commons, that is essentially correct.

However there are situations when, if a general

election produced no overall majority, her role

would become more significant. This is because

one of her constitutional tasks is to appoint the

Prime Minister, traditionally the leader of the

party with the majority of seats in the House of

Commons. Since 1945 this has been a straightforward task, but there is no constitutional

convention which lays down what the Queen

should do if this is not the case.

For the visiting tourist, the Houses of Parliament are an important stop on the tourist map.

Splendid and imposing, the gothic architecture

conjures an impression of tradition and maturity. But its workings are far from clear even to

the average United Kingdom citizen. The Palace of Westminster, has a long history which

stretches back to before the Norman Conquest

in 1066, when Edward the Confessor established

his palace on the site and it remained the

monarch’s main residence until Henry VIII

(1491-1547). The word “parliament” derives

from the French word “parler,” to speak or talk

and from the Middle Ages monarch’s summoned

advisers to discuss affairs of state. After the reign

of Henry VIII, the monarch moved away from

the Palace of Westminster and the buildings were

set aside for the needs of the two Houses of

Parliament and for the law courts.

While the term “parliament” can be used to

describe the buildings, it more importantly

describes two key components of the United

Kingdom constitution. The first is the House of

Commons, an elected body of some 651 people,

representing constituents in the United Kingdom. The second is the House of Lords with a

membership of Archbishops and Bishops,

Hereditary peers, Life peers and Judicial life

peers. They represent no one but themselves. The

final component is of course the monarch.

The Monarch

The monarch is an important part of Parliament

as we have already mentioned, indeed one of
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-4

Since the 18th century monarchs have progressively distanced themselves from politics and

for many this has allowed the sovereign to remain a key element of the British way of life.

Any “meddling” in politics may be deemed unacceptable and threaten the role of the crown in

our parliamentary democracy.

The Prime Minister

The Prime Minister is an elected member of the

House of Commons and since 1945 has been

the leader of the majority party in the same

house. He or she is the head of the government.

Unlike other countries, the Prime Minister is not

the Head of State, nor Commander in Chief of

the Armed Forces. Those titles remain with the

Sovereign.

The House of Commons

The House of Commons is one of two chambers of Parliament. It is often referred to as the

elected House, to distinguish it from the House

of Lords, which

is not. Parliamentary elections take place

when parliament has been

“dissolved” either by Royal

Proclamation, or

because the

maximum term between elections, 5 years, has

expired. On average the time between elections

is less than the mandated period, as Prime

Minister’s and their government often seek

political advantage by seeking elections earlier.

The British method of voting at General Elections (Governments seeking re-election) is by a

“first past the post” principle on the basis of

single member constituents. In this process

individuals cast a single vote for a candidate.

The candidate who wins the most number of

votes is then elected as the Member of Parliament (MP) for that constituency. For the more

recent elections to the Scottish Parliament the

Welsh Assembly and the European elections, a

form of proportional representation has been

used.

Selection of candidates for election is undertaken

at local level although increasingly central party

control is being strengthened over the process

of shortlisting.

The House of Commons has a very important

part to play in the law-making process. It is here

that most “bills” are introduced, debated and

undergo a structured process of “readings” and

committee work before they are passed to the

House of Lords and then to the Queen for

signature. It is at this point that the “Bill”

becomes an “Act” and part of statute law. On

defence matters, the House of Commons will

debate the Annual Statement of Defence

Estimates, the formal approval of funds to the

defence arena, but will have no formal say on

individual acquisition programmes.

The House of Lords

This unelected second chamber consisting of the

four main groups of individuals has an important part to play in scrutinising all legislation

and has the power to refer contentious legislation back to the House of Commons with amendments. It may also initiate legislation, in which

case the bill is then passed to the Commons for

scrutiny. In more recent years its role has been

questioned, firstly because it is unelected and

secondly because historically there are far more

individuals in the House who support the

Conservative Party than any other political

grouping. On the other hand it has a substantial

number of members who are not members of

any party, known as “cross benchers.” While the

House of Lords can disrupt and delay the passage
Part 3 United Kingdom

3-5

of a bill, the House of Commons does have the

power to invoke the Parliament Acts of 1911

and 1949 to ensure that bill passes to the sovereign for final signature, in spite of continuing

Lords opposition.

It should be added at this stage that the future of

the House of Lords is under much discussion at

the moment and a Royal Commission has been

established to make proposals for a more representative second chamber, which either way will

dispense with the “hereditary peer” principle.

Some form of elected or appointed “second

chamber” is likely to be introduced.

The Committee Structure

The committee structure in the House of

Commons is confusing and complicated. In

essence there are three types. The first are

Committees of the Whole House, which as their

name implies, consist of all members of the

House of Commons. They are responsible for

examining the text of bills clause by clause and

seeing how or where it can be improved. At one

time all bills were examined in this way, but

more recently only three types of bill have been

examined by this particular committee. Firstly,

straightforward and uncomplicated bills which

can be dealt with very quickly, secondly, bills

which are considered to be urgent and need a

swift passage, such as the Prevention of Terrorism Act 1974. Finally those which are deemed

to be of significant constitutional importance.

The second group of committees are those

referred to as Standing Committees. These deal

with all routine government and private

members bills. They are formed for each new

bill and dissolved when their work has been

completed.

The last group, the Select Committees, are

formed and selected from among the membership of the House of Commons. Each department

will have its assigned permanent Select Committee to examine expenditure, administration

and policy. They have powers to send for

individuals, papers and records and report

formally from time to time having completed

their investigations. There are some seventeen

in number. One of these is the Defence Select

Committee, chaired by an MP from the governing party. They take a keen interest in all defence

issues and report and comment on acquisition

programmes, particularly when they go wrong.

Whilst their reports can be damning, government ministers are in no way obliged to act on

any recommendations they may make.

The Cabinet

The cabinet is an essential component of the

“Executive” and is responsible for the formulation of all government policy. It traditionally

meets every Thursday and it is here that the dayto-day business of government is carried out.

The cabinet works on the basis of “collective

responsibility.” While cabinet allows individual

ministers to represent their departments and put

their point of view across to other cabinet

members, all decisions are taken collectively and

articulated as such.

The cabinet has responsibility for the general

direction and control of government business and

is responsible to Parliament for the performance

of the government. It always consists of the

Prime Minister who is chairman, the Chancellor of the Exchequer, the Home Secretary, the

Foreign Secretary and other ministers that the

Prime Minister appoints. While the total figure

can vary between different governments, it normally totals around 30 individuals at Secretary

of State or Minister level.

This is not the only forum in which decisions

are taken and increasingly smaller committees

are formed for specific activities. A War cabinet

was established during the Falklands and Gulf
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3-6

Wars with a reduced and more selective group

of advisors.

The Civil Service

The roles and responsibilities of the Civil Service

have been undergoing some subtle changes over

the last decade. Essentially they are the public

administrators for national and local government. They are politically impartial and the more

senior members of the Civil Service do have a

very close relationship with their ministers.

While the traditional view is that

Civil Servants are concerned

only with advising ministers on

policies and executing those

policies once ministers and

parliament have agreed,

they do wield considerable influence. The continuity they provide is seen

as a key asset with well

established lines of communication to other

departments and their

Civil Servants. The clear

distinction between

“policy” on the one hand and “administration”

on the other, is becoming more blurred and it is

now recognised that the decisions taken by Civil

Servants include an element of policy making

within a framework established by Ministers.

Parliament and Public Finance

The term public finance is used to describe the

process by which the State raises funds to meet

the Government’s planned expenditure

programme and the methods to account for the

moneys spent by the state. As such, all public

revenue and expenditure is controlled by the

Treasury, who can do nothing without the

approval of Parliament.

Since 1993, the Chancellor has provided the

House of Commons with a “Unified Budget”

statement annually in September of each year.

This outlines proposals for both raising money

and spending it. It provides details of expenditure for the next three years for each government department. (A financial year runs from 1

Apr -31 Mar). Details are published in a series

of “White Papers,” one for each Government

department, and the figures quoted constitute

cash ceilings to which the Government departments must work. Formal announcement takes

place on “Budget” day in the House of Commons when the Chancellor makes his statement.

This is followed by a series of debates in the

House of Commons after which a formal vote

is taken, sealing parliamentary approval. There

are often many debates about the content of the

budget, but rarely will the government be

defeated in a vote, although the last Conservative administration was forced to make some

changes as a result of an MP rebellion.

Within the Ministry of Defence, the Secretary

of State for Defence is responsible to the Government and Parliament for Armed Forces and

their expenditure. To assist him he relies upon

the Chief of Defence Staff (CDS) a military

person, selected on merit from any one of the

three Services. There is also a Permanent Under

Secretary (PUS), a career civil servant, who is

the principal Accounting Officer of the Ministry and responsible for the long term financial

planning and budgetary control of the defence

programme. This will be covered in more detail

in the next section.
Part 3 United Kingdom

3-7

CHAPTER 2

THE MILITARY OF

THE UK – ORGANISATION

the means by which it is conducted. Under current arrangements he is supported by two

Ministers of State, one for the Armed Forces,

dealing with operational and policy issues, and

one for Defence Procurement. There is also a

Parliamentary Under Secretary (PUS) who deals

with personnel issues and estate business among

other matters.

The Secretary of State and his three Ministerial

colleagues are thus at the head of the Ministry

of Defence and are accountable to Parliament

for all defence matters on a day-to-day basis.

Parliament exercises this oversight through

debates, departmental Select Committees,

namely the House of Commons Defence Committee (HCDC), oral and written questions, and

enquiries from individual MPs. The House of

Commons Public Accounts Committee holds the

Department to account for public money through

its Accounting Officers.

Functions

The MOD’s purpose is to enable its Ministers

to discharge their responsibilities for Defence.

It has three functions:

• As a Department of State it formulates policy

of all sorts for Defence matters, directs the

implementation of that policy, participates in

wider policy-making in Government, and

supports ministers in their accountability to

Parliament.

Introduction

There are three separate Armed Services into

which individual Servicemen and women are

recruited and to which they belong throughout

their military careers. Defence, however, is a

coherent activity, which is increasingly managed

on a Tri-Service basis. The central machinery

for achieving this is through the concentration

of policy-making in the Ministry of Defence

(MOD) Headquarters in Whitehall, with military and civilian staffs working in integrated

hierarchies.

The Defence Council

The formal legal basis for the conduct of defence

in the UK rests on a range of powers vested by

government statute in the Defence Council under

the chairmanship of the Secretary of State for

Defence, and on Parliament’s voting of public

money for defence purposes. Under the Defence

Council there is a Board for each Service, the

Admiralty, Army and Air Force Boards. These

Service Boards exercise a wide range of formal

and statutory powers relating to the administration of their Service and its personnel, e.g., flying regulations for the RAF and regimental

matters for the Army.

Ministers and Parliament

The most senior government minister for

defence matters is the Secretary of State for

Defence who is responsible for the formulation

and conduct of defence policy, and for providing
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-8

• It incorporates the highest level Military

Headquarters, which gives military advice

upward to the Government, and strategic

direction downward to Commands.

• It procures equipment for the Armed Forces.

Departmental Aim

The aim of the MOD is to define the strategy

and maximise, within the resources allocated,

the defence capability required to:

• Deter any threat to, and if necessary defend,

the freedom and integrity of the United Kingdom and its dependent territories, including

the provision of support as necessary for the

civil authority in countering terrorism.

• Contribute to the promotion of the UK’s wider

security interests, including the protection and

enhancement of freedom and democratic institutions, and the promotion of free trade.

• Promote peace and to help maximise the UK’s

international prestige and influence.

Integration

The MOD produces two different but equally

vital sorts of integration. First, it integrates the

Political and the Military. It links the roles and

missions of the Armed Forces to the Government’s wider foreign and security policy. This

is sometimes labelled as politico-military or

“pol-mil” business. In terms of operations, this

means dealing with the grand-strategic and

military-strategic levels of planning and direction. In terms of the management of Defence it

means translating legislative, financial and public standards and constraints into policy and

practice for the equipping and day-to-day running of the Armed Forces. Second, it brings

together the three individual Services to work

together for common good of Defence, not for

individual Service interests.

Figure 1. The Military Organisation Related to Government

Parliament

Prime Minister

Cabinet

S of S

PUS/CDS

Defence Council

Overseas Policy

and Defence

Committee

Command Headquarters

Single Service Staffs

Formations/Units

Defence Procurement

Agency

Central Staffs

(Policy)
Part 3 United Kingdom

3-9

Structure

Over the last 10 years significant integration of

the three Services at MOD level has produced

an organisation which is known as “purple” (representing the colour mix of the Army’s brown,

the RAF’s light blue and the Navy’s dark blue).

The development of the Department to deliver

the defence overview and integration has

revolved around:

• Strengthening the integrated Central Staff in

relation to previous single-Service arrangements, while streamlining organisations and

procedures to minimise duplication of effort.

• The MOD’s “Head Office” concentrating on

policy-making, while delegating executive

responsibilities and the direct control of

resources to Commands which are both

geographically and organisationally separate

from London.

• Further integration is still taking place particularly with such aspects as logistics and

acquisition.

The MOD top level organisation is given in

Figure 2 and shows that the Secretary of State

has two principal advisers:

• One military, the Chief of the Defence Staff

or CDS.

• One civilian, the Permanent Under Secretary

of State, or PUS.

Neither of these is subordinate to the other. They

share responsibility for much of the Department’s business and reflect the inescapable

duality of the civil and military aspects of

defence in a democracy.

The CDS is the professional head of the Armed

Forces in the United Kingdom and he is selected

from any Service and is the “best man for the

Figure 2. MOD Top Level Organisation

Ministers

Secretary of State + 3

Single

Service

Staffs

DPA

CDP

CAS

CGS

CNS

“THE EXECUTIVES”

VCDS

CSA

2ND PUS

“Central

Staff”

CDS PUS
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-10

job.” He is the principal military adviser to the

Secretary of State and the Government. The

chain of command for the planning and conduct of military operations flows from the

Cabinet and the Secretary of State to CDS, and

from him down to operational commanders at

various levels.

The PUS is the Government’s principal civilian

adviser on Defence. He has the primary responsibility for policy, finance and administration in

the Department and co-ordinates the provision

of advice to Ministers. He is the MOD’s Principal Accounting Officer and is thus personally

accountable to Parliament for the expenditure

of all public money voted for Defence purposes.

VCDS and 2ND PUS

CDS and PUS each have a deputy: the ViceChief of the Defence Staff (VCDS) and the 2nd

PUS. Together VCDS and 2nd PUS are the joint

heads of the Central Staff, which is the heart of

the Ministry of Defence. This forms a very

strong central axis which is both Tri-Service and

military-civilian in character.

Single-Service Chiefs of Staff

Under the CDS, each of the three Services has

its own Chief of Staff. The Chief of the Naval

Staff (CNS), Chief of the General Staff (CGS),

and Chief of the Air Staff (CAS), are the professional heads of the Royal Navy, the Army

and the Royal Air Force respectively. (The Royal

Marines come under the Royal Navy). While

they have (in general) no command responsibilities, they are responsible for their Service’s

overall fighting effectiveness, efficiency and

morale so that it delivers the military capability

which Defence policy requires. At the same time

they contribute their wide military experience

to the development of policy and management

on a Defence-wide basis as members of the Defence Council and other key bodies. The singleService staffs, which work directly for the three

Chiefs of Staff in London, are relatively small

because many areas of expertise have been concentrated in the Central Staff, on which the three

Chiefs can draw.

Chief of Defence Procurement

The Chief of Defence Procurement (CDP), is

the head and Chief Executive of the Defence

Procurement Agency (DPA) formerly known as

the Procurement Executive, which is responsible

for the development and acquisition of weapons systems. The DPA is the largest purchasing

organisation within the Government.

Chief Scientific Adviser

The Chief Scientific Adviser (CSA), is usually

a distinguished scientist or engineer brought into

the Civil Service on a fixed-term appointment

(usually a minimum of five years). His task is to

help ensure that scientific and technological

considerations are given full weight in decisionmaking and will have considerable influence on

the research work mainly undertaken in the

Government owned Defence Evaluation and

Research Agency (DERA).

Main Committees

The thirteen posts described so far, Ministers,

Civil Servants and Military, form the Defence

Council. The nine non-Ministerial members of

the Defence Council form the Finance, Planning and Management Group (FPMG) which is

now the Department’s corporate board. It is

responsible for directing a number of key

processes, in particular the annual re-costing of

the Defence programme and the Departmental

planning process. The PUS chairs the FPMG,

although the CDS may take the chair for some

business. In 1999 certain re-organisations,

largely because of the changes needed to institute new acquisition processes, are making some
Part 3 United Kingdom

3-11

changes (mainly to titles) to this top-level

structure.

The Chiefs of Staff (COS) Committee is chaired

by the CDS and is the main forum in which the

collective military advice of the Chiefs is

obtained on operational issues and Defence

policy. It is the MOD’s principal crisis management committee. The PUS attends the COS

Committee. A number of other senior committees bring together formally the various strands

of Defence business. Those that impact on

acquisition are:

• The Equipment Approvals Committee (EAC),

chaired by the Chief Scientific Adviser,

makes recommendations to Ministers on the

procurement of major equipment and itself

authorises procurement within financial

delegations granted by Ministers. It consists

of CSA in the chair, CDP, VCDS, Chief of

Defence Logistics and 2nd PUS. This membership reflects the views of the Services as

users of the equipment, those of the DPA who

will be responsible for acquiring it, and those

of the Central Staff, which is responsible for

policy and resource allocation.

• The Navy Board, the Executive Committee

of the Army Board and the Air Force Board

Standing Committee are sub-committees of

the Service Boards of the Defence Council.

Each is chaired by the Service’s Chief of

Staff. They deal with the management of their

Service and the development of singleService doctrine.

• The Procurement Policy Board, chaired by

one of CDP’s executive board members, considers procurement policy on a particular and

a general basis. It reviews progress against

performance targets on contracts and is the

forum through which new policy proposals

for procurement are adopted.
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3-12

Chapter 3

THE STAFFS

things are critical to the success of the Central

Staff: one is civil-military integration, the other

is the role the military staff officer is expected

to play.

Central Staff Components

The Central Staff is organised into several major

blocks or areas. The main one concerned with

acquisition is:

• The Systems area, under the DCDS (Systems), is responsible for identifying the

equipment capabilities needed by the Armed

Forces, and for formulating the Operational

Requirements, or specifications, for the military equipment. It also manages the Applied

Research Programme.

Other areas (using titles current in mid 99 but

being changed) which have some connection

with the acquisition process are:

• The Resources, Programmes and Service

Personnel area formulates policy on service

personnel issues and financial systems and

regulations, and runs the MOD’s resource

allocation process, known as the Long Term

Costing (LTC). It is led by the DUS

(Resources, Programmes and Finance) and

the DCDS (Programmes and Personnel).

• In the autumn of 1999 the Systems and Programming area will be merged under a DCDS

(Equipment Capability).

• The Policy/Commitments area is responsible

for the formulation of Defence policy in the

THE CENTRAL STAFFS

The Central Staff, headed jointly by the VCDS

and the 2nd PUS, is the policy core of the

Department. It is over 2,000 strong and located

mostly in London. Under Ministers, the Central

Staff is responsible for the three fundamental

aspects of Defence policy and planning:

• To establish the Government’s security and

defence aims and what they imply for the

missions and tasks of the Armed Forces.

• To establish what sort of military capability

and equipment will best achieve these aims.

• To establish what resources are necessary to

sustain the Government’s policy and how they

can best be allocated.

Within the MOD structure civilian and military

staff are integrated in single hierarchies wherever

this best meets the need. The seven officers and

officials in the Central Staff at the three-star or

“deputy” level and their staffs work flexibly

together in support of the needs of all members

of the Defence Council. Of the seven, three are

military (Deputy Chiefs of the Defence Staff or

DCDS) and four are administrative civil servants, (Deputy Under-Secretaries or DUS).

Below them many civilians have military superiors and vice versa. It is this central staff area

where, in 1999, that changes, mainly to titles,

are taking place to accommodate changes

brought in following a major government

defence review in 1998. One of the results already implemented was to create a new post,

the Chief of Defence Logistics (CDL). Two
Part 3 United Kingdom

3-13

widest sense, both long and short-term, and

for the actual or potential commitment of

British forces to crises, operations and exercises. The civilian Policy Director and the

military Deputy Chief of the Defence Staff

(Commitments) (DCDS[C]) lead this area.

• The Scientific area, under the DUS (Science

& Technology), provides scientific advice to

the MOD HQ, especially to the Systems area,

and manages the Corporate Research

Programme. Some posts straddle these areas

or operate independently in the Central Staff.

The Chief of the Defence Logistics (CDL)

provides a single focus for logistics issues,

both in relation to the support of operations

and on wider value-for-money questions

throughout Defence.

Civil-Military Integration

Integration is based on working efficiency and

the premise that political-military business needs

political-military staff. The MOD’s civilians

bring to bear policy-making, financial and

administrative skills, as well as an understanding built up over many years of political and

Parliamentary considerations, which is essential

in a Department of State. Military officers are

trained, at considerable cost in time and money,

to be expert professionals and commanders; they

are sent to the Ministry of Defence to provide

the essential knowledge and experience, which

these military skills bring. Both sets of skills

are considered by the UK to be vital to the good

management of Defence.

The “Purple” Approach

All military posts in the Central Staff are

regarded as Tri-Service or “purple” posts, even

if they deal only with business specific to a single

Service or are always filled by one Service in

particular. When officers join the Central Staff

they therefore have to adopt a Defence-wide

perspective. They do not stop belonging to their

Service but their job is not to promote its interests in a narrow sense. It is to ensure that the

Central Staff is able to reach a balanced overall

view on any issue. In many cases their work may

be closely focused on single-Service business,

for example at working-level in the equipment

areas, but more often it is broader.

Defence Intelligence Staff

The Central Staff works very closely with the

Defence Intelligence Staff (DIS), which is the

most important of the Departmental support services collocated with the MOD HQ. The tasks

of the DIS are to give policy-makers and planners throughout Defence and commanders in the

field an accurate view of world developments,

timely warning of impending crises and

informed reporting on areas where British forces

are or may be deployed. It analyses material

from a variety of sources, including open literature and classified reports. Its assessments range

from studies of weapons systems held by

potential opponents, to analysis of the influences

at work in any part of the world where the United

Kingdom has important interests. It thus provides essential inputs to identifying capability

shortfalls. The DIS is a mixed organisation of

military officers and civilian research staff,

scientific staff and linguists, headed by the Chief

of Defence Intelligence (CDI).

Resources for Defence

The Government allocates money to the MOD

and the Armed Forces each year, as to other

Departments, in the process known as the Public Expenditure Survey (PES). In the spring,

MOD tells the Treasury the likely cost in cash

of the programmes it wishes to carry out over

the next three financial years. Detailed discussions take place between officials and the

Treasury over several months, and final decisions

are taken collectively by Cabinet Ministers. The
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-14

Chancellor of the Exchequer announces the

results for all departments in his budget

statement in late November or early December.

The budget set for the first year (the “Estimates

Year” starting the following April) is a fixed cash

sum. The cash totals for the second and third

years are firm plans that form the basis for the

following year’s PES round when they are

reviewed in the next annual negotiation.

The Long Term Costing

To provide forces and infrastructure to deliver

the required military capability, the MOD constructs a plan and programme. These objectives

and targets give expression to Defence Policy,

to objectives and force levels, equipment, logistics and personnel support, which can be

afforded within the cash, allocated in PES. Each

year the previous year’s plan and programme

are rolled forward and revised to take account

of changes in policy, resources and circumstance.

This process of resource allocation within the

MOD is known as the Long Term Costing (LTC)

and is shown in Figure 3.

The LTC looks forward four years for operating costs and ten for equipment, rather than the

three of PES. The four-year plan is known as

the Short Term Plan (STP) and must be costed

as accurately as possible identifying any tradeoffs and slippages to keep within the resources

allocated. It does not start with a blank sheet of

paper each year but with the programme, which

the Secretary of State approved the previous

year. So the costing exercise is essentially a recosting of the four-year period. The equipment

plan merely identifies rough order costs for the

longer-term equipment programme and is

known as the Equipment Plan (EP). Both the

STP and the EP are issued for re-costing in April

each year in the form of the Departmental Plan.

This is an internal, classified document that sets

out a range of management and performance

objectives that the MOD must meet, and the

force levels and readiness requirements for the

Figure 3. Defence Strategic Planning, Programming and Budget

Equipment Plan

Short Term Plan

Short Term Plan Year ONE

Sep-Oct

Cost Options

Finalise Plans

Oct-Jan

Create Budgets

Apr-Sep

Set Planning Assumptions

Negotiate the Plans

Create and Review Baseline

Strategic Plan 30 years

10 years

4 years

1 year
Part 3 United Kingdom

3-15

Military Tasks. It goes to the single-Service

Chiefs of Staff and Top-Level Budget (TLB)

holders, who in turn have their own management

plans which set out in increasing levels of detail

the specific outputs required from each Command and management area. In this way, the

programme assumptions are passed down the

budgetary chain to more than 1,000 individual

budget holders and to the project directors of

equipment programmes.

The assumptions are then re-costed by budget

holders and project directors. At each level, two

key issues are addressed:

• First, is the programme tautly costed in a way

that maximises value for money? Each budget holder must show how he or she could

manage his activities within previously agreed

resources. In other words, they must show

how any cost growth in particular areas can

be offset elsewhere.

• Secondly, the budget holder must illustrate

how reductions in his or her budget can be

achieved. This identifies how there might be

compensation for unavoidable cost growth

elsewhere in the programme, creating the

headroom for enhancements to be introduced.

A key requirement is to identify efficiency

savings to contribute towards meeting the

Department’s efficiency savings targets.

Budget holders are also given the opportunity

to propose enhancements, which they would like

to see, added in their areas. The costings are

progressively aggregated up the budgetary

hierarchy and closely scrutinised by each level

of management. Minor changes to the

programme, both upwards and downwards, are

incorporated at this stage. The process also highlights particular problem areas, which need to

be studied further. Ultimately, draft plans and

re-costed budgets are submitted to 2nd PUS. The

relevant Service Chief of Staff is responsible for

ensuring that TLBs’ bids for his Service’s operating costs are tautly costed and reflect agreed

Departmental requirements.

The central assessment of the full re-costing

begins in earnest in December each year,

following the Chancellor’s announcement of the

new three-year plans for public expenditure. The

new cash plans are used to calculate a ten-year

benchmark against which to judge the re-costed

programme. The savings measures offered by

budget holders and potential enhancements are

prioritised against key policy and military

objectives in the light of the Government’s

decisions in PES on the overall resources to be

allocated to Defence. This assessment allows a

view to be taken across all three Services and

all of the MOD. That view will decide the

particular areas of concern that need addressing, the particular military capabilities that need

enhancing, and the best package of savings

measures to provide the headroom to make

enhancements and offset cost growth.

The 2nd PUS and VCDS consult the Service

Executive Committees and the Procurement

Board before the FPMG decides what is to be

submitted to Ministers. Final decisions on the

content of the programme are taken by the

Secretary of State. The result is a long-term plan

and costings that set objectives and match policy,

commitments and resources. It forms the basis

of the request to Parliament to vote Estimates

provision for the new financial year; and for the

allocation of cash to budget holders and the

setting of objectives down the management

hierarchy. It also provides the programme

assumptions on which the Department bases its

next PES bid and LTC cycle.

The LTC process is run by the civilian staff

working for the AUS (Programmes) in the Central Staff, in concert with the military staff under

the ACDS (Programmes). These include the

single-Service Resources & Programmes
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-16

branches and their sister military Plans &

Programmes directorates. While part of the

Central Staff, they support their own Service’s

Chief of Staff, including the carrying out of his

responsibilities for the overall financial management of his Service’s TLBs It is worth repeating that whilst the functions described above are

not expected to change post mid-99, the titles

and responsibilities of those involved may well

do so.

THE NON-CENTRAL STAFFS

The non-central staffs are effectively the users,

the Services. Each of the Services has a Command Headquarters that deals with the day-today running of the Service. These are broadly

operational and support commands and each of

the Services has adopted organisations that best

fit its needs of providing front-line forces. Each

Command HQ will have as its head a Commander in Chief (CinC) who will be a three or

four star officer. He is also known as the Principal Administration Officer (PAO)1

 to describe

his responsibilities and accountability as budgeting as a TLB for the provision of front line

forces and support to those forces. In terms of

the acquisition process, such responsibilities

have included the provision of in-service support, modifications, upgrades and training as

well as providing the funds for the more usual

operating costs that would be expected.

The adoption of Integrated Logistic Support

(ILS) as a philosophy and a policy for all acquisition has enabled the in-service costs for the

PAO to be given due priority during the early

phases of the acquisition cycle. The PAO in fact

provides both the budget and the manpower to

the DPA for the staff in the project team that

will deal with ILS.

CENTRAL STAFFS RESPONSIBILITIES

IN THE ACQUISITION PROCESS

Responsibility for Equipment Requirements

Within the framework established by the LTC,

the procurement of major equipment proceeds

on a step-by-step basis. A replacement equipment must always be justified from basic

principles by showing that a gap exists in our

capability and demonstrating the military value

of filling it in the context of Defence Policy and

the planning assumptions about the sort of

operations to which British forces might be

committed.

Within the Central Staff, the Operational

Requirements (OR) branches in the Systems area

are responsible for the formal statements which

define the characteristics required of new equipment. These staff are currently (in 1999) being

reorganised into Capability Management (CM)

areas responsible for defining capability gaps

within their defined area. They describe these

capability gaps in User Requirement Documents

(URDs) which express the function and desired

performance in broad terms. The URD will have

the benefit of the results of feasibility studies,

usually involving both the Defence Evaluation

and Research Agency (DERA) and industry. The

URD is the authoritative statement of the requirements to fill the capability gap.

The OR branches work very closely with

colleagues elsewhere in the Central Staff and

others outside it. The Services who will operate

and maintain the equipment, the DPA’s technical and project management experts, DERA and

industry, all make important contributions.

Equipment Approvals Committee,

Scrutiny and Approval

The requirement is ultimately the responsibility

of the Equipment Approvals Committee (EAC),
Part 3 United Kingdom

3-17

which makes recommendations to Ministers on

the largest projects (defined as in excess of

£400M total procurement cost) and authorises

others within its own delegated powers (£100M-

£400M). Below this figure the EAC delegates

responsibility to two and one-star officers for

the remainder.

The scrutiny, whether by EAC or delegated by

them, is a careful comparison of the relative cost

and operational effectiveness of alternative

solutions to the requirement. It will start with

the option of doing nothing and look at potential

trade-offs such as upgrading an existing system

rather than buying a new one, or buying a few

relatively expensive systems or more, cheaper

ones. Systems are assessed against a wide range

of scenarios because of the many possible uses

for the Armed Forces in today’s uncertain

strategic environment. Scrutiny is made of the

cost of operating a system through its entire life,

which means taking into account reliability,

maintainability and the people needed to man,

sustain and support the system. This process is

known as a Combined Operational Effectiveness

and Investment Appraisal (COEIA).

In addition to the COEIA, many other issues

are examined. What is the best procurement

route, develop a new system, collaboratively or

nationally, or buy one “off the shelf?” What risks

are attached to each option? What are the implications for British industry? The LTC process

addresses whether or not a particular new system

is affordable and where it stands in relation to

Defence-wide priorities. Normally a project will

not proceed unless there is provision for it in

the LTC.

The EAC, or its delegated authority, will expect

convincing answers to these questions and more,

before it decides to allow a project to go on to

the next stage. Very recent changes, covered in

later sections, mean that the scrutiny process is

now reduced to two major approvals. It may need

to establish a consensus among differing views

held by the various interests represented and

proper trade-off decisions made. For example,

it may be necessary to reconcile the desire to

have new equipment brought into service as

quickly as possible with the need not to cut

corners. It is also part of the EAC’s process to

ensure that lessons learned from experience are

applied to all projects and acquisitions.

The Central Staff includes a number of scientists and engineers who provide objective

scientific advice in support of policy-making,

planning, programming, and equipment procurement. They ensure that the potential of science

and technology is recognised and exploited,

particularly in support of the equipment

programme and operations.

DEFENCE EVALUATION AND

RESEARCH AGENCY (DERA)

DERA provides the majority of the support in

the research and evaluation of technology areas

for the Central Staff. DERA changed its status

and was launched as a trading fund in Apr 95

which means it effectively operates as an

independent government business. Although no

longer part of the MOD, DERA undertakes

research and provides advice on scientific and

technical matters to help exploit advanced technology in the defence services. They manage

both Applied Research and Corporate Research

in packages known therefore as the ARP and

the CRP. The latter is the long-term work sometimes known as “blue skies” research where the

end result is unclear. The ARP exploits the CRP

research and works on applications to specific

platforms. This work is funded by the MOD and

managed by DERA Science staffs. Some of the

research work is further sub-contracted to

universities or other research organisations.

Increasingly DERA are also exploiting their

new-found commercialisation to undertake
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-18

organisation with Agency status, which means

they are allowed more autonomy of operation

and have to operate as would a commercial

business.

The new organizational structure for the DPA

stood up on April 1, 1999. The DPA was previously called the “Procurement Executive,” and

traces its structure and values back to its roots

in the Admiralty, War Office and Air Ministry.

The Chief of Defence Procurement is also the

Chief Executive and has two deputies, a

Deputy Chief Executive (DCE) and a Deputy

Chief of Defence Procurement (Operations)

(DCDP[Ops]). There is an Executive Board consisting of six Executive Directors and the DCE.

Each of the Executive Directors has responsibility for managing the procurement of different systems or types of defence equipment and

there are 10 Support Directors managing groupings of similar types and ranges of equipment.

They are in fact grouped into 11 Peer Groups

where similar types and systems are grouped

regardless of land, sea and air specialisation. The

grouping of projects within peer groups has tried

to keep similar operational roles or functions

together, hopefully to match a similar reorganisation for the new Capability Groups

within the Central Staffs which has yet to be

decided. Within each of these Peer Groups, the

job of managing procurement projects rests with

Project Managers, who head integrated management teams incorporating technical, contracts,

finance, quality control and logistic support

expertise. Figure 4 shows the DPA organisation.

The Executive Directors deal with all procurement issues, including contractual matters, and

technical issues, quality assurance and intellectual property rights. DPA also provides oversight for procurement policy in the military

services that buy local and base related items.

They do have common services to draw on for

human resources, commercial policy, certain

technical services, secretariat, facilities and

research for companies in a wide range of areas.

DERA has a turnover of some £1 billion per

annum, still overwhelmingly sourced from

Ministry of Defence customers, and employ

around 8,700 scientists. DERA does not look

after any nuclear research however. It has two

overseas offices in Brussels and Moscow and

operates from 15 different sites throughout the

country.

DEFENCE PROCUREMENT AGENCY

(DPA)

Organization

The Defence Procurement Agency is the single

biggest purchaser of manufactured goods in the

United Kingdom. DPA buys over £5 billion of

new systems, equipment and initial logistics

support for the Armed Forces each year. It manages more than 13,000 contracts with a staff of

approximately 5,500 personnel. These contracts

cover the acquisition of a variety of items ranging from the purchase of submarines to small

spare parts for a field radio. In 1997 the DPA

moved to its current location at Abbey Wood,

north Bristol.

Procurement of defence equipment is an important and specialised task. It is the responsibility

of the DPA in the MOD and is overseen by the

Minister of State for Defence Procurement. The

DPA is led by the Chief of Defence Procurement (CDP) who is accountable to Parliament

for the spending of the money that has been

allocated for equipment procurement and logistic support. This Accounting Officer responsibility covers not only the DPA but also the expenditure of the three single-Service Logistics Commands that procure a wide range of stores and

consumables for in-Service equipment. The

DPA has recently undergone a series of major

organisational changes designed to create a

slimmed-down, fully integrated, more efficient
Part 3 United Kingdom

3-19

information technology and financial planning. The organisation is evolving and will no

doubt change as the benefits and challenges of

operating as an Agency develop.

DEFENCE PROCUREMENT AIMS

AND METHODS

The aim of UK defence procurement is stated

as: “to buy equipment for the Armed Forces that

meets their requirements and timescales with the

best value for money.”

Every year the Ministry of Defence spends

around £12 billion on goods and services. No

other organization in the United Kingdom

spends more on a wide range of acquisitions

from military equipment to food, stores and

clothing.

Competition is fundamental to achieving value

for money and is used wherever possible. MOD

does not simply accept the cheapest bid, but that

which provides the best overall value for money

taking account of all the relevant factors. The

entire life of a piece of equipment is considered

because support costs over that lifetime can far

exceed the cost of its procurement . Competition

obtains keen offers but taut contract terms are

required to ensure that the value is delivered.

Where possible a single prime contractor is

selected and, with the aid of clear specifications,

made responsible for delivering a complete

system that meets the requirement. Firm (i.e.,

cash) or fixed prices (i.e., varying with inflation

or other indices) are used wherever possible to

ensure that the contractor carries financial risk.

Where competition is either not possible or

sensible, MOD policy is “No Acceptable Price

– No Contract” (NAPNOC), which is designed

to ensure prices are fully agreed before a contract

Figure 4. The Organisation of the DPA (as of 1 Apr 99)

The DPA Executive Board

Chief of Defence Procurement (CDP) and Chief Executive (CE)

+ Deputy DCP (Operations) and Deputy CE

+ 6 Executive Directors

+ 1 Non-Executive Member

IPTs grouped into 11 “Peer Groups” of similar equipment or

functions—each with its own Support Director

Common Services

• Technical Services

• Human Resources

• Key Supplier Management and Commercial Policy

• Specialist Procurement Services

• Secretariat

• Facilities and Information Technology

• Finance and Planning
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-20

is let. Where longer contracts need interim payments, they will be made only against the

achievement of clearly defined performance

milestones or acceptable delivery. Frequently a

proportion of the payments will be retained until

the equipment has been in service for a period

and the MOD can be sure that it has met the

specification.

Over recent years, a series of initiatives have

been introduced to improve the management of

defence procurement. These include improved

risk assessment and management, integrated

logistic support planning, enhanced consideration of reliability and maintainability, streamlined contractual procedures, improved communications and consultation with suppliers, and

more systematic consideration of defence

industrial factors.

The DPA is also open to innovative proposals

from industry under the Government’s Private

Finance Initiative, where it can be shown that

the introduction of private sector finance and

management expertise can yield efficiencies, for

example in training and support. Such contracts

have been let for simulation training where the

contractor provides the complete service from

building and equipping the facility, to the provision of training and maintenance staff for a

long-term contract, perhaps for 30 years.

An International Approach

Foreign contractors are free to bid for the

majority of MOD business, as prime, or as subcontractors. However, some security considerations, international obligations, and a number

of other special factors are taken into account

before deciding whether work can be placed

overseas. Offsetting some of the value of the

contract with reciprocal orders or manufacturing

in UK might be a deciding factor in competing

bids of equal value. Certainly UK, as do other

countries, prefers dealing with UK registered

companies if only to simplify contractual and

legal procedures. Many foreign companies

therefore set up collaborative consortia and

partnerships, registered in the UK, as a way of

operating more simply.

The Anglo-French Reciprocal Purchasing

Agreement gives a particular focus to crossChannel purchases. Features of it have been

adapted in a wider initiative to open the European defence equipment market; this is now

being taken forward under the aegis of the Western European Union Armaments Group

(WEAG) within the Western European Union

(WEU). The UK is an active participant in

WEAG initiatives such as the proposal to

develop a European Armaments Agency.

Because defence equipment is increasingly

complex and expensive, the needs of the Armed

Forces may sometimes be better met through

collaborative ventures with other countries.

There are many potential advantages in collaboration, including standardisation with allies,

increased inter-operability, the sharing of development costs, economies of scale in production

and efficient use of national resources. As the

cost of developing very advanced defence equipment grows, the pressures on defence budgets

throughout the NATO alliance grow too. This is

heightening the need for collaboration, particularly in Europe but also in the USA. However,

collaboration is not an end in itself, but simply

another way of achieving value for money;

furthermore, collaborative projects must be

managed as effectively as national projects.

Defence Export Services Organization

(DESO)

The DESO is a key part of the DPA. Defence

exports have a vital role in sustaining the health

of the British defence industry and keeping its

costs down. They also have an important wider

role in maintaining and developing the UK’s
Part 3 United Kingdom

3-21

international equipment relationships. Under the

Head of Defence Export Services, DESO exists

to help British companies to market and sell their

defence products and services overseas. It

mounts defence equipment exhibitions, such as

the combined Royal Navy and British Army

Equipment Exhibition. DPA project teams work

closely with the DESO in considering the export

potential of equipment. Government authority

from the Foreign Office must be obtained before

defence equipment can be exported to another

country. As other countries do, UK has a list of

countries to which it forbids export of defence

equipment. DESO is effectively an Agency in

their own right within the DPA, situated in

London. Their actual place in the new DPA

organisation is still being determined.
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3-22

Chapter 4

ACQUISITION2 – INTRODUCTION

Much of the change is still being developed and

it will be several years while the new system

settles down.

The AOR report identified certain aspects of the

previous system that needed to be changed:

• The arms-length relationships resulting from

the separation of requirement definition,

research, procurement management and

through-life support.

• Under-resourced early project stages.

• Lack of sufficiently flexible strategies within

the procurement and logistics organisations.

• Lack of delegated authority in management

of projects.

• Ineffective and mutually incompatible incentives between MOD and its contractors and a

lack of internal incentives for its staff.

See Figure 5 for the high-level recommendations

that were therefore made.

SMART PROCUREMENT

The Smart Procurement Initiative (SPI) has the

following aim—“To enhance defence capability by acquiring and supporting equipment more

effectively in terms of time, cost and performance.”

It embraces a number of initiatives and builds

on the best practice in some existing projects.

A formal division of the acquisition, or procurement cycle, into phases, with a formal decision

point between each one, was introduced to the

Ministry of Defence following a review of the

procurement cycle in the mid-1980s. It became

known as the Downey Cycle after the senior civil

servant that headed the review. Experience

showed that whilst risk was greatly reduced, procurement of major equipment was still often over

budget and took far too long, often coming in to

service many years late. In 1998, the newly

elected Labour Government instituted a major

review of defence known as the Strategic

Defence Review (SDR). It included a fundamental review of how the MOD procured its equipment and sought proposals on how to do it faster,

cheaper and better. The review has become

known as the Smart Procurement Initiative

(SPI). It included a fundamental review of the

acquisition organisation under The Acquisition

Organisation Review (AOR). It introduced a

modified acquisition cycle3

, aimed at improved

evaluation of risk and at reducing the interruptions to the flow of project work. This is achieved

by redefining the phases to increase effort early

in the project life cycle whilst reducing the number of phases and formal approval points. Also

the associated submissions were to be less

bureaucratic than those produced before.

Thus SPI is a major change for UK procurement practice which changes the structure, the

process and the procedures. It will be therefore

more robust in the face of less predictable threats

and tasks, increasingly complex and diverse

defence equipment, a rapidly changing industrial structure and new Treasury performance

targets for time and cost of defence procurement.
Part 3 United Kingdom

3-23

Its key elements are:

• A through-life “systems” approach,

• Improved requirement management tradeoffs,

• Partnering arrangements with industry,

• New procurement techniques e.g. incremental

acquisition,

• Sharper procurement timescales, and

• Contracts up to five years priced in cash and

longer-term contracts to use output price

indices.

In order to support these initiatives, an SPI

programme has been initiated which is driving

changes in the organisation based on these key

concepts:

• A single integrated project team bringing

together all stakeholders and involving

industry except during competition phases,

• A clear customer within the Ministry of

Defence for the project, and

• A streamlined approvals process.

Strategy

Clear segmentation of spending

More flexible approach

Processes

Revised front-end process

Streamlined approvals and

oversight

Integrated Project Teams

(IPTs)

More effective positive and

negative incentives

Organisation

Clearly defined customer

Restructured acquisition

organisation

Figure 5. High-Level Recommendations
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

3-24

Chapter 5

THE NEW ACQUISITION CYCLE –

KEY FEATURES

ment, the procurement and the support of military equipment from concept to disposal. The

phases are shown in Figure 6.

Value For Money

Value for money is a central theme of the

Government’s approach to procurement of

defence equipment in particular. As part of that

aim competition continues to be MOD’s main

tool in achieving value for money in procurement. The integration of Industry into project

team activity will vary during the procurement

cycle, according to the competitive situation in

each phase. Where competition is not a realistic

option, and particularly where high value and

important projects are being managed, a form

of long term partnering4 is likely to be appropriate.

Introduction

The new acquisition cycle reduces the numbers

of formal approval points and reduces the number of phases. The most fundamental change,

however, was the establishment of Integrated

Project Teams (IPTs) where responsibility and

accountability were given much greater prominence. The work of an Integrated Project Team

has particular focus on the customer and the

IPT’s activity aims to achieve a seamless flow

of responsibility from the start to the finish of

the acquisition process.

This section describes the phases of the new

acquisition cycle and introduces the principles

behind the work to be achieved in each of them.

The word acquisition is used to embrace all the

activities associated with defining the requireFigure 6. The Procurement Phases

Concept Assessment Demonstration Manufacture In

Service

Initial

Gate

Main

Gate

Acceptance

Contract ISD
Part 3 United Kingdom

3-25

Concept

The objective of the concept phase is to identify

which options for a given mission should be

developed further; eliminating those options not

worthy of further investigation. Survey and demonstration of technologies is taken from the

Applied Research Programme (ARP) along with

high level Operational Analysis.

Broad evaluation of the options to meet a capability gap will be carried out by the Capability

Working Groups (CWGs) (to be discussed later)

formed by the Capability Manager (CM) to oversee the definition of the requirement by applying the principles of Systems Engineering (i.e.

an integrated process). As equipment options

emerge, an embryonic IPT will be formed to

make preliminary through-life costings to go

with the draft User Requirement Document

(URD) with a shortlist of viable options, for

presentation as the case for the first formal

approval known as Initial Gate Approval.

Initial gate

At the Initial Gate, the approving authority, the

EAC, approves the resources necessary for

Assessment, recognising that the significant

expenditure entailed requires formal approval

of a mission need and the scale of resources to

be consumed. The approving authority also notes

the preliminary through-life costing as a reasonable scale of investment for the proposed

capability, subject to the verification to be

achieved in Assessment.

Assessment

Operational analysis is completed embracing

comparative analysis of alternative options. The

objective of the assessment phase is then to

down-select to a single technological option for

demonstration, with technical risk from sub-systems reduced to acceptable levels. Technologies

for all sub-systems may be demonstrated including those that require integration from the

research programme.

Indicative procurement and life cycle costs will

have been set at the start of the Assessment

phase. During Assessment, operational performance trade-offs are undertaken on an iterative

basis to determine the optimal balance between

whole-life cost, performance and time. At the

end of Assessment, the aim is to identify the

best value for money solution and firm costs for

acquisition and ownership through its life.

The approval submission then contains the Performance Requirement, consisting of:

• Systems Requirement Document (SRD),

• Key Performance Parameters, and

• Tradable Requirements.

All requirements are linked to mission needs.

Only the Key Performance Parameters are

absolute, all others are tradable during the later

Demonstration phase. Output requirements will

be specified, but not the implementation or technical details.

The approvals submission also contains cost and

time boundaries, a procurement and throughlife support strategy and a plan for managing

the remaining risk, all of which are important

sub-sets of the developing Through-Life

Management Plan (TLMP).

Up to 15 percent of project costs can be spent

up to the end of assessment; this will usually

allow iterative risk reduction if needed. A key

change from previous practice is, that rather than

pressing ahead to Full Development to meet a

pre-determined in-Service Date (ISD), the IPT

will be encouraged to focus on those activities,

including, if necessary, main or sub-system
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development, which will be key to reaching a

position where both MOD and the selected

contractor(s) are satisfied that they have a solid

basis on which the project can proceed.

Main Gate

The major review point is the Main Gate that

determines commitment to an individual project.

It is established at the end of the Assessment

phase. At this point, the IPT and the customer

jointly submit to the approving authorities,

recommendations on whether the project should

continue to Demonstration and Manufacture. In

addition they present recommendations as to the

firm parameters which should be established for

the project going forward, i.e. a firm Equipment

Programme funding line, a firm total cost for

any infrastructure and assets and associated

equipment whole-life costs, a firm in-service

date and a finalised performance-based requirement. At this point, projects not providing an

acceptable balance between performance,

whole-life cost and time should be cancelled.

Once Main Gate approval has been granted,

further reference to the approving authorities

post Demonstration should only be needed in

exceptional circumstances if:

• the project goes outside the agreed boundaries

on performance, cost and time.

• wider affordability or other issues have arisen

in the interim that could alter or undermine

the original decision.

The approvals process itself aims to be as simple

as possible in order to ensure that Main Gate

preparation is carried out insofar as possible in

parallel with on-going development work during

the Assessment phase. In cases where the

recommendation is to proceed to Demonstration, the IPT has authority to continue with

preparatory work for the Demonstration phase

while waiting for approval; funding for this

activity will have been sought at the initial gate

(so that the cost of the decision-making period

is visible).

Demonstration

The objective of this phase is to down-select to

a single contractor and place a contract for

remaining development and production. Technical risk from an integrated solution will have

been reduced to a level that the contractor is

willing to assume and the project manager is

willing to transfer.

Further performance trade-offs will be undertaken throughout the Demonstration phase to

refine and finalise the solution, and to establish a firm capitalised asset value and best estimates of support costs. Design to cost principles

are usually employed—a significant change

from previous practice—using requirements

management to maximise performance at a fixed

cost.

Demonstration of integration capability will be

made by physical models, prototypes, computer

models or proven contractor ability. Development will be started and some operational trials,

in field or synthetic environments, may be

carried out.

Manufacture

Manufacture delivers the solution to the military task. The remainder of full development is

completed and the production run is carried out.

Throughout the previous phases techniques of

working in closer partnership with the industrial supplier will have been used that involve

the latter as part of the Integrated Project Team.

This will include identifying incentives for

identifying and sharing cost reductions that do

not prejudice the performance requirements that
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have been agreed. Closer partnerships between

MOD and industry are difficult to deliver but

are seen as key factors in successful delivery of

Smart Procurement Initiative (SPI). During the

manufacture phase it will become clear whether

these arrangements are working, or have worked,

successfully. During manufacture, the manufacturer and the user carry out trials of the equipment against acceptance criteria. Equipment

acceptance by the customer marks the entry to

the in-service phase and the completion of the

Capability Manager’s role as customer for the

equipment as currently defined.

In-Service Date

The date on which the capability is available to

the relevant Commander-in-Chief (CinC) is possibly the most significant milestone in the

equipment’s life. At this point effective support

to the front line must be available, and sustainable, as identified and agreed in the equipment

support plan.

The appropriate CinC now becomes the IPT’s

customer for availability and activity levels for

the equipment. It should be noted that this customer activity is different from that of the

Capability Manager; the latter has to define the

requirement and accept the details of the form

the capability is taking. Once in service the

capability is not only defined but in being, apart

from any upgrades or incremental acquisition

that the capability manager still requires.

IPT control transfers to the Defence Logistics

Organisation (DLO) as soon as development,

technical risk-reduction and acceptance into

service are complete. This point will vary

depending on the type of equipment and the

number of units being produced. For example,

for a project involving the production of a large

number of units (e.g. 500 missiles) it would be

entirely feasible to transfer the project to the

DLO once a small number have been successfully

produced. However, in the development of a new

class of submarine, with production of only three

units, transfer will not occur until the last unit

had been manufactured and completed in-service

acceptance trials. To manage this variability, the

point of transfer between the DPA and the CDL

will be agreed by the MOD central staffs and

the Single Service at the beginning of the

Demonstration phase and will then be visible

from the earliest stages within the Through-Life

Management Plan (TLMP).

In-Service

Equipment support management planning will

have been carried out by the IPT and transfers

with it as the IPT transfers into the CDL

organisation. The designated equipment support

branch, which was part of the IPT from the initial

concept phase, becomes the IPT lead. The size

of an IPT is considerably smaller by this stage

than at the peak of procurement activity. A number of equipments may be routinely managed in

a group. The initial transfer will be as an IPT,

typically led at one-star level for a large project,

which will report to the senior level of equipment support management; continuity of

management, expertise and personnel will be at

a premium for this transfer.

Subsequently IPT activity may reduce, subject

to any upgrade activity and the size and responsibility will reduce correspondingly; for certain

equipment the CDL may rationalise the smaller

team into an existing equipment support

management grouping.

The existing IPT will also be responsible for

incremental technology acquisition, minor upgrades, and refits according to the project’s

TLMP and will require additional project

management resources with the Defence Procurement Agency (DPA) or elsewhere, as

required. For major modifications that significantly change the capability of the equipment,
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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a parallel IPT with overlapping membership and

led by the DPA will be formed for the Concept

and Assessment phases. Once a firm decision to

proceed has been taken at the end of the Assessment phase, this IPT should be formally

integrated into the original IPT.

Disposal

The IPT will be responsible for drawing up and

carrying out plans for the disposal phase. Disposal needs to be by the most efficient and effective means and will comply fully with national and international safety and environmental legislation. Disposal may mean onward sale,

recycling or destruction of all or part of an equipment.
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Chapter 6

THE APPROVALS PROCESS

• At the Initial Gate, have the proposals identified a full range of options, the scope for

potential trade-offs, and the necessary risk

reduction activities?

• At the Main Gate, has the best option been

selected on the basis of cost-effectiveness

analysis? Have the whole-life costs, the time

and the performance trade-offs been

optimised, and has risk been reduced in order

to proceed within much narrower parameters?

• Have all the controls and constraints of policy,

doctrine, defence resources, industrial issues,

etc. been reflected in the plans?

The Business Case format means that the written approval documents required to establish a

satisfactory audit trail are quick to produce and

easy to gain agreement to at working level

A Business Case has three parts. The first two

parts, together representing the case for taking

the project further, are a customer focus where

the Capability Manager takes the lead, and a

supplier focus where the IPT leader takes the

lead. For an Initial Gate submission, it might be

expected that the customer focus is the more

significant part, with the opposite being true at

the Main Gate. The third part of the Case is an

independent review of the project written by the

scrutineers, examining the soundness, costeffectiveness and affordability of what is being

proposed.

General

There are two approval points. There is the Initial

Gate between the Concept and Assessment phases,

and the Main Gate at the end of the Assessment

phase (see Figure 7 on page 3-31). The responsibility for preparing approval submissions rests

with the Capability Manager (customer) and the

IPT team leader (supplier). The requirement and

technical scrutineers, while maintaining their

independence, are attached to the IPT team at

key stages and maintain sufficiently close contact at other times to enable their queries to be

raised and resolved in early project phases, rather

than in the preparation for Main Gate.

The Capability Manager (for the Central Customer) and the IPT Leader (for the current and

future suppliers, Chief of Defence Procurement

(CDP) and Chief of Defence Logistics (CDL))

jointly produce a Business Case for approval.

Their proposals are subjected to independent

requirement and technical scrutiny. The Requirement and Technical Scrutineers (who have

delegated responsibility from 2nd PUS and Chief

Scientific Adviser (CSA) respectively) review

the Business Case to satisfy the following

questions:

• Is there an equipment capability need and is

it being satisfied by a cost-effective and

affordable investment?

• Is this proposal the best way of ensuring that

the most cost-effective, whole-life solution

will be properly procured and supported inservice?
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Chapter 7

SMART REQUIREMENTS

The intention is to define user requirements for

a capability, e.g., air defence, rather than a system, and to allocate those requirements to system options identified by Capability Working

Groups (CWGs) and developed by Integrated

Project Teams (IPTs), under the direction of

Capability Managers. A through-life “system of

systems” approach will be followed, and the

capabilities of existing systems will be improved

in relation to changing user demands.

Change of Culture

Smart Requirements has involved a change of

culture. Instead of writing requirements in

descriptive prose and in lengthy documents, the

requirements are “atomised” or broken down

into their essential constituent parts, to produce

a set of user or systems requirements. For

example an “atomised” requirement document

seeks to list requirements as defined attributes,

such as “Locate targets approaching at 50 feet

at 250 miles distance.”

Overview

The key features of Smart Requirements, are:

• A complete and consistent Requirement is

defined but is split into User and System

Requirements Documents (URD and SRD)

reflecting user needs in the former and refining requirements on the system to fulfil those

needs in the latter.

• The URD is updated as necessary throughout the life of the system to reflect both evolving user needs and changing assumptions.

Introduction

In conjunction with the implementation of the

Smart Procurement Initiative (SPI), the MOD

is adopting a new method of capturing, engineering and managing requirements based on

the principles of System Engineering i.e. an

integrated and holistic approach. It is called

Smart Requirements. The key objectives are to

introduce a through-life, evolutionary requirements process, which will integrate all stakeholders of requirements and facilitate the

delivery and sustainment of affordable and

effective Defence systems. The staffs that deal

with requirements are the CMs and their CWGs.

The key stakeholders, however, are still the

Operational Requirements (OR) staffs in each

particular Capability area. SPI has involved a

major change in the process of defining requirements and seeks to ensure a consistent approach

across projects by using a Smart Requirements

model.

Context

The pre-1999 procurement process tended to be

solution focused, with early attention paid to the

characteristics of the equipment to be procured.

Many procurements proceeded purely on the

basis of an assumed solution, resulting in a concentration on equipment performance rather than

the actual needs of the user. Smart Requirements

moves the focus to the needs of the users by

defining “what the users of a particular future

system will need” to include the requirement

for whole systems through-life, rather than just

initial procurement.
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However, the URD will be baselined as necessary in order to allow project approval to

take place. In particular, a baselined version

of the URD, known as the Higher Level-URD

(HL-URD) will form the Statement of Mission Needs, which will allow the development

of equipment options at Initial Gate Approval.

• The SRD will be developed up to second

approval stage, Main Gate, where it will be

baselined for approval. Thereafter, it will be

updated only as a result of trade-off decisions

agreed between the Customer and the IPT

leader, or later when required as the basis for

in-service upgrades.

• At Initial or Main Gate approval, the user and

system requirement can be presented in an

appropriate depth and scope from the underlying information base in a suitable format.

Such documentation would be in the nature

of a “snapshot” of the instantaneous state of

the overall project requirement and would be

uniquely defined and configured.

• Each user or system requirement is specified

in terms of a single, unique and unambiguous statement or “atomised” requirement.

User requirements include a statement of how,

in general terms, the requirement will be verified. Each system requirement also includes

defined acceptance criteria

• The linkage between “atomised” user and

system requirements has to be maintained by

the IPT. System requirements are used as the

basis of the contract with the supplier, and

the supplier and the IPT must maintain the

Figure 7. Relationship to Acquisition Phases and Approvals

Milestone

Activity

Requirements

Information

Documents

Prepared by

Initial Gate Main Gate Contract

Placement

ISD

Concept Assessment Demonstration Manufacture In

Service

URD

HL-URD

SRD

System Design

Statement of

Mission Need

Equipment

Options in

Initial Gate

Dossier

Baselined SRD

in Main Gate

Dossier

Contract

CWG/

Embryonic

IPT

CWG

IPT
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linkage between the system design. This

allows the impact of changes in the user

requirement to be traced to the affected

system requirements and system design, and

to enable trade-offs in system requirements

and system design to be traced back to user

requirements. Linkages within the URD and

SRD also have to be identified, in order that

interactions can be monitored.

Relationship to the Acquisition Process

Figure 7 shows how the URD (including the

baselined HL-URD) and SRD fit into the acquisition phases and approval gates and how the

production of user and system requirements

maps onto the acquisition phases.

Some System Design work may take place at

an early stage, based upon the HL-URD, in order

that equipment options can be identified and

costed for initial Gate Approval. After Main

Gate, a potential contractor will bid against the

SRD, and the SRD will form the basis of the

contract. The prime contractor designs the system and, in conjunction with the IPT, maintains

the audit trail back to the SRD and URD. The

final product is accepted against the criteria

specified in the SRD. The URD is maintained

after the equipment enters service to allow the

performance of the system and potential upgrades to be assessed against the evolving user

requirement.

Approvals

The approvals process must interact with Smart

Requirements. Initial and Main Gate approvals

will be supported by baselines of the URD and

SRD which will be submitted as part of the Business Case for the project.

SUPPORT FOR OTHER

EXTERNAL PROCESSES

General

The Requirement database will support many

other external processes: system design, contracting, acceptance, operational evaluation, and

others as shown at Figure 8. To ensure a consistent approach, these outputs should be provided

from the URD and SRD, following the Continuous Acquisition and Logistic Support (CALS)

philosophy of “enter data once, use many times,”

from a requirements database.

Figure 8. Support for External Processes

Requirement

Information

Approvals

OA/Research

System

Design

Contracting

Acceptance

Operation

Support

Disposal

Requirements

Database
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leading to acceptance may be undertaken at

levels beneath the system requirements. Integration into the operational environment and

acceptance into service will be conducted against

the URD and associated verification criteria.

Where it is not possible on the grounds of costeffectiveness to test every requirement, key

requirements and acceptance criteria are

identified.

ORGANIZATION

The Capability Working Group (CWG) provides

the forum for requirements capture, review,

conflict resolution and achieving a common

understanding across stakeholders.

Requirement Ownership, Change

Authority and Management

The CM owns both the URD and the SRD. However, ownership of the latter will be implemented

through the Requirements Manager in the IPT.

Contract

By Main Gate, the Requirement is fully defined

and verified, and able to form the basis for

contracting for full system development and

production. By this stage the Requirement must

include measurable and achievable acceptance

criteria against all contracted system requirements. The complete Requirement should form

part of the ITT. This allows suppliers to appreciate the context of the requirements and to

propose trade-offs. Once agreed, the SRD will

be baselined for use as a contractual document

and this version not amended further until

subsequent implementation phases or system upgrade (though a live version of the Requirement

is likely to continue to be amended to reflect

changes).

Integration & Acceptance

Finally as shown by Figure 9, the delivered system will be accepted against the SRD. Acceptance is hierarchical and many of the tests

Figure 9. System Design, Contract and Acceptance

User

Requirement

System

Requirement

System

Design

Acceptance

into Service

System

Acceptance

Verification

Acceptance Early

Iterations

System

Integration

People

Support

Equipment

Feedback on Cost,

Risk, and Feasibility

Trade

Offs

Integration

into

Operational
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The CM’s primary responsibility is to represent

user needs and he therefore focuses on this

element of the requirement. Management of the

requirement information can be conducted

within the IPT, or contracted out to DERA or

industry, but ownership and change authority

still rests with the Capability Manager.

REQUIREMENT INFORMATION

User Requirement Document

The URD consists of a general description containing background information followed by

specific capabilities and constraints.

The URD will be produced and maintained by

the CM organisation with reference to the

CWG as required. Steps specific to the User

Requirement are shown in Figure 10, although

it is iterative and not strictly sequential. The SRD

is stated in a series of uniquely numbered,

“atomised” text statements with attributes.

Requirements are stated in plain text for precision and to ensure that they can be understood.

Context Documents

On occasions, there is need to place requirements

into context in order to aid understanding of

them by industry and to support the scrutiny and

audit process. Details such as mission profile,

operating requirements, quantitative support

factors, a description of the equipment being

replaced (if any) and the existing support available for the new system may be required. This

information is provided in the form of Context

Documents.

Figure 10. Engineering the User Requirement

Capture User

Requirement

Identify

Users

Review User

Requirement

Identify

Constraints

Establish

Scope/Contexxt

Capabilities/Activities

Effectiveness

Constraints

Threat

Environment

Related Systems

Doctrine

Constraints URD

Identified

Capability

Need(s)

Specify & Structure

User

Requirement

Provide

Feedback on

System Viability

Develop

Concept

of Use
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Chapter 8

THE INTEGRATED PROJECT TEAM

(IPT)

worth emphasising the exact interpretation of

the terms answerable and accountable. They are

defined as follows:

• Answerable: Responsibility to the customer

for meeting agreed cost and performance

targets and milestones within agreed expenditure resources (as set by the approvals

authority) through the provision of equipment

acquisition and support functions.

• Accountable: Responsibility to the line

manager (in the DPA) for propriety and professionalism, efficiency and effectiveness, in

the delivery of these functions.

The astute reader will therefore realise that the

IPTL has two masters!

Key Features

There are several key features of the IPTs. Core

functions such as project management, commercial management, finance, contracts and logistics, are included in the IPTs in order to ensure

an integrated approach at all times. There is only

one project team, which starts work as an

Embryo Integrated Project Team (EIPT) in the

concept phase and which will remain responsible for its project and move from the DPA to

CDL with the project.6

 Team leaders will have

total accountability and are expected to serve

with projects for four to five years or longer to

establish continuity.

General

The Strategic Defence Review5

 studies identified clearly the need to move from a functionally based management and reporting structure

to a project based organisation based on Integrated Project Teams. This project based

organisation is founded on IPTs, bringing

together all stakeholders and involving Industry (except during competition phases) under a

team leader able to balance trade-offs between

performance, cost and time within boundaries

set by the approving authority. A second major

change identified was the need for a clearly defined

customer/supplier relationship. Together, these

changes allow IPTs to deliver consistency and

continuity throughout the project life cycle, and

ensure close and effective involvement of all

major stakeholders in key decisions.

The key objective of moving from a functional

structure to a project based structure is achieved

by bringing core members of the IPT under the

line management of the IPT Leader. Functional

links to policy setting authorities outside the IPT

remain, and members draw advice from these

authorities, but the Team Leader alone is

answerable to the Customer for the provision

of equipment capability at an agreed cost and

performance and delivered on time. Furthermore, the Team Leader is accountable to the

head of the parent organisation for the propriety of the team’s actions and for meeting other

Accounting Officer requirements. This is a major

change for UK procurement practice and it is
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organisation to determine the strategy for, and

outputs of, the subsequent Assessment phase and

the resources that will be required. This enables

estimates of total projected equipment throughlife costs to be put forward for “Initial Gate”

approval. Operating costs will form a vital component of this submission so the Team Leader

will need to develop a clear plan of how the team

will be made up and how inputs from the various

members will vary over the life of the equipment and agree this with the customer and other

key stakeholders.

The IPT Leader will consider the need for

collocating the team, as many of the members

will be located in different parts of the country

and headquarters. Generally, to ensure the close

communication essential for effective team

working, the IPTL seeks to bring the core

members together. However, where elements

of the team need to be located at production

or evaluation sites, or at times of transfer into

service, geographical separation may be

necessary; special communication systems are

then provided.

Membership of an IPT

The membership of an IPT will be assembled

to bring core specialist knowledge and expertise

including:

• Requirements management,

• User knowledge,

• Project Programme Management,

• Project Engineering and Technological

Expertise,

• Equipment Support Management,

• Commercial Management,

How the IPT Functions

As a result of SPI, the MOD central staffs assume

a more clearly defined role as the “customer”

for the defence equipment programme before

such equipment enters service. Equipment capabilities are “supplied” by integrated project

teams, which operate under procedures and

managerial oversight supplied by the DPA until

the equipment enters service.

IPT Leader

The Integrated Project Team Leader (IPTL) is

expected to have strong leadership and management skills and may be appointed from any of

the core membership areas. The appointment

will be made sufficiently early to allow the

IPTL and his EIPT to be fully engaged in drawing up the estimates and targets to be set or

approved at any stage so that he or she can then

be answerable and accountable for achieving

them. The Customer/Supplier relationship (see

Chapter 10) is a key feature of the acquisition

process and there must be a high degree of

interaction with the Capability Manager through

the life of the project. The IPTL will normally

be selected by the line management area where

the IPT lies and the customer, with other senior

stakeholders being consulted as appropriate.

Selection considerations will include the nature

and particular phase of the project. Continuity

and stability of leadership (and membership) of

the IPT, particularly across approval gates and

key phase changes, will be critical to success.

Leaders of IPTs are likely to be competitively

selected from a pool of candidates from inside

and even occasionally outside MOD.

Establishment of an IPT

Individual IPTs are formed during the Concept

phase to pursue a specific solution to a requirement. One of the key functions of IPT during

this phase is to work with the Customer
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• Finance Management including Secretariat

skills, and

• Industrial (in the role of supplier – according

to project stage).

Each of these core functions will not necessarily be provided on a full-time basis, it depends

on the needs and size of the IPT. The relative

contributions needed in each area will vary

during differing phases of acquisition and are

tailored according to the type of procurement

involved. For example, an incremental enhancement programme will involve concurrent

application of procurement and in-service

management skills.

Industry is a key stakeholder and provides core

membership of the IPT. Arrangements will vary

through the equipment cycle. Clearly, commercial confidentiality and impartiality needs to be

fully respected and demonstrated at all times.

More detail is covered in Chapter 9 – The Role

of Industry. DERA also provides significant inputs in the research, assessment, testing and

project support areas not usually as member of

the IPT but tasked by it to supply specific inputs. The MOD’s research programme is a key

contributor to the equipment acquisition process,

informing the Capability Manager and the IPT

of the availability and practicality of specific

technologies and research programmes. Facilitating technology pull-through from the Applied

Research Programme will be a critical task for the

IPT during early phases or incremental enhancement, and input from those staff managing the

ARP is essential to achieve this. For example the

application of Night Vision Goggle technology

into the aircraft cockpit is such a case.

The IPT also needs to draws on more specialist

subject matter expertise, either through team

membership, perhaps part-time, or as a service.

This “associate” membership may therefore

include:

• DCDS(S) scientific staff, particularly in

support of operational analysis (OA),

• Specialist Procurement Services, such as

safety, reliability and maintainability and

quality specialists, and

• The Service user unit, training unit and trials

units, and any in-service specialists such as

transport units.

Attached to the IPT on a part time basis, but

reporting separately, will be technical (the Chief

Scientific Adviser’s Scientific staff) and financial scrutineers, providing oversight at IPT level.

The scrutineers role is twofold. First, it is to

support the project manager in assessing and

managing technical risks, and in preparing documentation and analysis for the EAC. Second, it

is to provide an additional level of independent

oversight which includes alerting the team leader

and, with the team leader, the approving

authorities to any breach or potential breach of

approval.

The Scope of the IPT

IPTs will be grouped in a variety of ways. In

some cases it will be by equipment capability,

such as a warship with all its systems, or an aircraft type, or by industrial equipment grouping,

such as radar or communication equipment. The

grouping of small equipment requirements into

a single and logically structured IPT is currently

presenting the MOD with its greatest challenge.

Nevertheless the IPT should ideally have one

Capability Manager as the customer for its work.

In Service Date (ISD)

At the ISD date the transfer of the IPT from

DPA to the Defence Logistics Organisation

(DLO) will occur. ISD is not always well defined

and the IPT needs to agree a clear definition

with the customer for each project.
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Chapter 9

THE ROLE OF INDUSTRY

• The need for UK products to be competitive

in world markets.

Of course at the same time there is a continued

emphasis on cost reduction, but now accompanied

by a readiness to allow Industry an appropriate

share of the benefits from the process.

The key elements therefore in the relationship

of industry to the acquisition cycle are:

• To involve Industry from the earliest phases

of projects, actively encouraging their

participation in the trade-offs between time,

performance and whole-life costs that are the

central activity of the IPT’s role up to the

“Main Gate,” either in its own right or supporting the central customer in the concept

phase. Also encouraging Industry to come

forward with innovative approaches which

will save costs in later phases and possibly

provide wider benefits such as improved

export potential.

• To improve Industry’s understanding of

MOD’s needs and constraints and to reduce

the number of iterations required to reach a

satisfactory proposal from Industry. Similarly

to improve MOD’s understanding of the

capabilities of Industry and how the procurement process might stimulate improvements

in competitiveness in the supply chain.

• To provide other benefits such as reducing

risk, introducing teamwork between industry and MOD, more flexibility in approach

and in contracting and to ensure value for

money.

General

Under SPI there is a fundamental change in how

relationships between MOD and Industry are

conducted during the equipment acquisition

cycle. The key is a change in the openness and

interactiveness with which day-to-day dealings

are conducted, moving away from the “arms

length” approach introduced in the mid 1980s

towards joint methods of working, symbolised

through Industry’s involvement as members of

the IPT. While some of the changes in SPI can

be seen as an evolution of the previous practices, the relationship with Industry requires a

major culture change on both sides which it remains to be seen whether it can be delivered. It

poses a special challenge for the project team

since new ways of working are needed, with trust

and openness on both sides and the commitment

to work for the best interests of each other, but

within the constraints of government funding.

The Government has continued to emphasise the

need for “partnership without cosiness.” It has

drawn attention to three common interests of

the MOD and Industry, in competitiveness to

meet the following:

• Military threats, particularly those new weapons that British forces could face when

deploying into the new scenarios envisaged

by the change in defence policy from the

SDR,

• The dissatisfaction of the taxpayer and

Treasury with cost over-runs and poor value

for money,
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The intended style of operation is to be open

and interactive, aimed at Industry helping MOD

to acquire the optimum performance, whole-life

cost and time balance, taking account of technology, know-how and manufacturing processes

in prospect within Industry. A Code of Conduct

can be drawn up between MOD and Industry

summarising the ways in which they will work

together to assist the process and help foster a

working environment of real co-operation. Such

codes of conduct, or “charters,” are usually nonbinding in the legal sense, but they do provide a

useful reference framework for the parties to

operate towards one another. To encourage cooperation further down the supply chain, prime

contractors are expected to enter into similar

arrangements with their principal suppliers.

Some situations, however, will require greater

formality and the embodiment of partnership

arrangements in legally binding agreements.

Typically this will be where the parties wish to

embody features such as longer-term security

of contract, sharing arrangements for efficiency

gains/cost reductions and joint management of

risk.

• To keep in mind the Government’s commitment to achieving European industrial integration, while not creating barriers to defence

trade and co-operation with the USA.

• To try and speed up the overall procurement

cycle time, particularly decision-making,

recognising there is ultimately a cost to MOD

when companies operate inefficiently while

MOD moves through decision phases.

• To continue to recognise Industry’s intellectual

property and to encourage the generation of

new ideas that will assist MOD

• To provide more efficient procedures for

collaborative projects.

Involvement

Industry can be involved in an IPT in essentially

two ways:

• participation by individuals from potential

suppliers (whether primes or sub-contractors),

and

• temporary attachment or other involvement of an individual as part of the team,

possibly even the team leader, but who is not

a potential supplier to the particular project.
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Chapter 10

CUSTOMER SUPPLIER RELATIONSHIP

BETWEEN THE CAPABILITY

MANAGER AND THE IPT

Role of Customer in IPTs

A crucial feature of IPTs is that acquisition staff

(Operational Requirements {OR} staff in the

“purple” Central Staffs) are included as members of the IPT during Assessment and Demonstration. This is necessary to ensure both

continuity of knowledge about the specifics of

the capability need and requirement, and the

availability of skills within the IPT to develop

and deepen the requirement as the project cycle

progresses. The role of OR member(s) of the

IPT during Assessment and Demonstration is:

• To support the IPT team leader in further

developing the initial top level requirements

document during Assessment, and in making

the necessary performance/cost/time trades

as the project develops both in Assessment

and Demonstration.

• To provide a working level interface between

the IPT and capability area, so that the IPT

can access its broader expertise in requirements

definition as needed.

• To ensure that the views of the central

customer are fully understood within the IPT

and that the central customer is kept fully

informed of any issues arising as the work of

the IPT progresses. This is an informational

role only; the basic line of customer/supplier

accountability runs from Capability Manager

to IPT team leader, and it is for the Capability

General

One of the central themes identified in the Strategic Defence Review analysis of MOD procurement was the need to achieve greater clarity in

internal customer supplier relationships. The

successful formulation of a single, central defence customer, the Capability Manager, in

MOD headquarters, and the clear definition of

the relationship between this central customer

and the integrated project team is seen as critical to achieving the full potential of Smart Procurement.

A single MOD Centre customer directs integrated project teams. There are some fundamental principles to this relationship:

• It provides the customer with real control of

the acquisition process.

• It aims to ensure that all stakeholders (external

as well as internal) are fully and appropriately

involved.

• It allows a smooth and seamless progression

throughout the project life cycle.

The relationship between the customer (the CM

in the Systems Area) and the supplier (the IPTs)

is formalised in Customer Supplier Agreements

specific to each project and to each phase of the

project.
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Given the crucial importance of ensuring continuity of knowledge throughout the project life

cycle, it is recognised that it is important to

ensure that individual OR members of IPTs

maintain their involvement for as long as

possible, consistent with wider constraints of

career moves.

Change of Customer

A significant change occurs at the transition

between the Manufacture and In-Service phases.

The identity of the customer will change. This

means that the relevant Single Service becomes

the customer of the IPT, which in itself will

have transferred to the Defence Logistic

Organisation’s (DLOs) control, for all ongoing

support activities and for incremental technology acquisitions, minor upgrades and refits

according to the project plan. The Capability

Manager, however, still acts as the IPT’s

customer for significant enhancements of

capability.

Manager to take up any issues directly with

the IPT team leader.

• To keep the Capability Manager briefed on

the work of the IPT and act as the Capability

Managers’ desk officers for that project.

• To keep the IPT team leader informed of

Concept Developments which may have

implications for the project.

The appropriate level of OR membership for any

individual IPT depends on its specific circumstances and life-cycle stage, and is agreed

between the central customer and the IPT team

leader. For larger projects, membership of at

least one OR person up to and including

Manufacture is desirable. Wherever practical,

the OR team member is collocated with the rest

of the IPT.
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Chapter 11

INCREMENTAL ACQUISITION

Whilst Incremental Acquisition should now be

considered in formulating the acquisition strategy for all projects, it is particularly beneficial

(frequently essential) to the acquisition of Command Information Systems (CIS). The timescale

of incremental delivery for CIS is much shorter

and the functionality is largely provided by

COTS products.

Incremental acquisition, planned from the outset, is quite distinct from the application of MidLife Upgrades/Updates (MLUs) to existing

equipment. These will continue to be necessary

on some equipment and will be dealt with

through the normal operation of the new acquisition cycle and arise when it is decided, after

examining all available options, that a requirement for additional capability is best satisfied

by the upgrading of existing in-service equipment. These activities are planned, approved and

conducted as projects in their own right.

The Through-Life Systems Approach to equipment procurement which is central to SPI,

recognises that it can be more effective to adopt

Incremental Acquisition particularly for rapidly

evolving technologies such as software and

electronics and for platforms hosting a range of

weapons and other systems. Incremental

Acquisition is based upon the timely delivery

of a baseline requirement followed by planned

upgrades to increase capability incrementally

through manageable steps, allowing for continuous cost versus benefit evaluation, risk reduction

and responsiveness to technology maturation and

operational feedback.

Incremental Acquisition has been accepted as

an important feature of the Acquisition Process

as a result of SPI. Its objectives are to:

• replace the current MOD acquisition process

by one based on acquiring military capability progressively, at lower risk, and with

optimisation of trade-offs between military

effectiveness, time and whole-life cost.

• cut the time taken for key new technologies

to be introduced into the front-line, where

needed to secure military advantage and

industrial competitiveness.

Incremental Acquisition provides for equipment

capability to be upgraded in a planned way, from

the initial delivery of a specified minimum

acceptable performance (the baseline requirement) to eventual achievement of required

performance, thereby:

• reducing the risk inherent in introducing large

improvements in capability through a single

major technological step.

• allowing systems to be developed and put into

service that incorporate evolving technology

as it becomes available.

• in the very fast moving technologies, such as

software intensive projects, allowing systems

to be developed with an open architecture to

take maximum advantage of new opportunities; it avoids the need for early commitment

to an approach which has often resulted in

the delivery of obsolescent equipment.
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Group, and the existing IPT. Only then may a

modification to the URD, the SRD and the

TLMP be created and approved. This will

usually be considered to be an extension of

capability and may be approved under delegated

powers for the cost concerned. If an existing

system is approaching the end of its life cycle,

one consideration will be whether to continue

to up-grade or move to a new system. This issue

will also be dealt with by the Capability Manager but may require the formation of a new

IPT.

In an Incremental Acquisition project, it is vital

that the perceptions of both the end-user and

the supplier are properly managed. The initial

standard of equipment to meet the baseline

requirement is not in any sense a prototype

(unless specifically scheduled as a Technology

Demonstrator); it must be robust, supportable

and operable. Some, perhaps even most, of the

elements of capability will be as demanding as

the ultimate build standard. There will be other

elements that can and should be delivered

quickly utilising currently available technology

and updated subsequently. The Capability

Manager and the IPT Leader jointly assess the

right balance between getting a new technology fielded quickly and achieving normal

standards for the “Fightability,” reliability and

supportability in the baseline equipment.

Incremental Acquisition procedures are still

being developed (as at Aug 99) and there are

considerable challenges to be addressed particularly during the early phases of Concept and

Assessment. For instance the logistic support for

different build standards with the right type and

standard of spare and in the right quantities, will

be very difficult.

The Through-Life Systems Approach also

recognises that many future systems should

either, be planned for a short replacement cycle

or be designed from the outset in a way that will

facilitate subsequent upgrading or modification

e.g. through modular design, open system

architectures and common interface protocols.

Therefore even if Incremental Acquisition in its

most complete form is not adopted for a project,

this aspect needs to be addressed at a very early

stage in the project and covered appropriately

as the URD and SRD is progressively refined

and the project develops its Through Life

Management Plan (TLMP).

For some projects, depending upon risk and

financial considerations, the acquisition is split

into Phases where each Phase may include

planned increments within it. The Main Gate

approval endorses both acquisition of the

baseline capability and the incremental acquisition strategy for the planned subsequent Phase.

Authority for increments beyond the baseline

requirement are normally delegated by the

Approving Authority to the customer and IPT

Leader, subject to an overall control on cost and

an acceptable, cost-effective, increase in

capability at each increment.

As the equipment or system develops through

its life cycle, new opportunities or requirements

for improvement will occur during the

incremental stages. In addition, the connection

between the project and relevant ARP work

continues after Main Gate in order to ensure

early insertion of newly available technologies

into the upgrade packages. All of this needs to

be assessed in the context of the whole equipment Programme by the Capability Manager,

supported if necessary by a Capability Working
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Chapter 12

SUPPORT MANAGEMENT

Defence Standard 00-60, which the IPT is

required to tailor to suit the equipment

programme, prescribes the application of ILS

within the MOD. The application of CALS

techniques is expected to benefit the support

management activity of CDL in particular.

SUPPORT ACTIVITY IN

SPECIFIC PHASES

Concept Phase

In the Concept phase only indicative costs and

support options can be identified. Prior to forming an IPT, CDL will contribute to Concept work

to ensure that no opportunities to consider novel

support or equipment options are overlooked

whilst also ensuring that decisions at this early

stage make sensible use of the early WLC

estimates.

Initial Gate

At the Initial Gate, the approving authority,

which includes CDL, will note the preliminary

through-life costing although at this stage accurate

prediction of support costs will be difficult.

Assessment

At the end of the Assessment phase, ILS work

will have contributed to operational performance

trade-offs to determine the optimal balance

between (through life) cost, time and performance. Through-life costs will have been established and an informed judgement on the solution, together with its support package, can be

Introduction

The Smart Procurement Initiative (SPI) gives

an emphasis to applying effort in the early phases

and decisions made on Whole Life Costs (WLC).

The 1998 Strategic Defence Review, with its

implementation of SPI and the creation of a triService Chief of Defence Logistics, reinforced

MOD’s commitment to the application of Integrated Logistic Support (ILS) as the Business

Process for achieving reductions in Whole Life

Costs (WLC).

The commitment that WLC is used as the benchmark for costing a new programme ensures that

key investment decisions are based on a total

cost of ownership. To reduce the risk associated

with those key decisions, improved definition

and accuracy of the predicted in-service support costs are needed, drawing on better historic

data. The project WLC and procurement

timescales must be fixed at the Main Gate

approval. Thereafter, any increases identified in

predicted WLC during Demonstration, risks a

reduction in capability. Similarly, an underestimation, and subsequent under-funding of inservice support costs, leads to a reduction in

activity and thereby military capability. Consequently, through-life support costs need to be

predicted as accurately as possible throughout

the programme requiring emphasis on ILS in

the early phases, to provide initial estimates. As

the programme develops, the Logistic Support

Analysis(LSA) will provide more accurate data

but must be updated progressively as better data

becomes available.
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Manufacture

During the Manufacture phase, the first elements

of the support package, including training, are

delivered. Much of the detail of the ILS

programme is finalised during this phase. The

success of the procurement and support strategy in relation to expected in-service costeffectiveness, as well as confidence in the

contractor will become clear. Opportunities for

closer partnering arrangements with the

contractor during in-service support (e.g. Contractor Logistic Support {CLS} arrangements)

also become apparent.

In-Service Date

During manufacture, when the majority of the

system is still to be delivered, line management

of the IPT switches to CDL who provides all

subsequent support.

made. Affordability of a project will have been

determined by the availability of funding to meet

the through life support costs.

Main Gate

At Main Gate approval, a firm funding line and

through-life costs as well as firm supportability

and in-service dates will be presented.

Demonstration

During the Demonstration phase ILS work contributes significantly to the decision on the

preferred contractor, as where competitors’

solutions prove to be equal in performance,

support aspects might then be the deciding

factor. At the entry to Demonstration, project

timescales and costs are fixed, and subsequently

capability is traded. Maintenance policies will

emerge, remaining support risk will be managed,

and through-life costs will be being refined.
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Chapter 13

PERSONNEL

• IPT Leaders are selected through an approved

competitive recruitment, selection and

evaluation process.

• The IPT Leader is responsible, taking into

account the customer’s obligations and

instructions, for constructing the IPT and then

instituting subsequent changes to its composition to meet the developing needs of the project.

• The IPT Leader is responsible for setting the

levels of performance related to rewards for

his team within his delegated powers.

• A wide variety of new training opportunities

are being made available. The IPT Leader is

responsible for ensuring that the IPT as a

whole is trained and motivated so that its aims

and objectives may be achieved.

• An Acquisition Personnel, Training and

Development team is being set up centrally

to provide Human Resources, Training and

Development support to IPT Leaders.

• Throughout all training there will be a

presumption of jointery between the Civil

Service, Military and Industry and all training

will be competence-based.

The acquisition process changes brought about

in 1998, recognised the need for major changes

in the personnel and training areas. In particular there needed to be considerable investment

in people and in their training in order to deliver

the new acquisition process. The Integrated

Project Team Leader’s direct line responsibilities and accountability were going to increase

and therefore much improved methods of training in the right skills and processes were needed

for them and their team members. In addition

there were organisational changes and the

management of change to be dealt with to deliver

the benefits of SPI.

Key Elements

The key elements in the acquisition process for

personnel and training are:

• An Acquisition Management stream is being

introduced and developed with long-term

sustainability, career paths and an endurable

culture of change. As at mid-99 it is unclear

how many personnel this will involve and

what the career structure will be.

• An Acquisition Capability Framework (i.e.

competence set) has been developed and will

be introduced.
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Chapter 14

BRITISH DEFENSE INDUSTRY

the public and was auctioned to existing companies. BAe came up with the winning bid in

1987 and slowly integrated RO into its overall

business. The surviving naval dockyards, at

Devonport and Rosyth, were initially placed

under private management with the government

maintaining ownership but in the 1990s both

were fully sold off. The only significant Government-owned defense plants in 1999 were the

Atomic Weapons Establishments at Burghfield

and Aldermaston, with both being managed under contract by a private firm, Hunting Engineering. Britain’s major defense electronics

company emerged as the General Electronic

Company (GEC) with a complex structure of

defense subsidiaries.

From 1983, under the leadership of the then

Secretary of State Michael Heseltine, Britain

emphasized competitive tendering as the central

means of awarding contracts. The Government

argued that competitive pressures stimulated

British firms to become more efficient and

competitive on world markets. Certainly the UK

tended to hit its export target of orders worth $8

million a year during the 1990s. Also, undeniable was that individual companies closed plants

and restructured workforces in an effort to survive in an era of falling British defense equipment spending. From the late 1980s around

200,000 jobs were cut from British defense

industry, leaving about 400,000.

The privatization moves of the government

initially brought more defense firms into play

but, once the stress on competitive tendering

proceeded, the number of British firms in most

sectors began to decrease. Even by the 1980s

The capabilities of Britain’s defense industry can

be traced back to the mobilization of the society

as a whole for war during the 1939-1945 period.

While the UK was a major recipient of U. S.

military aid during the Second World War, it also

was a major producer of its own aircraft, ships,

armored vehicles and munitions. After 1946 the

priority became to rebuild civil industry, but the

outbreak of the Korean War prompted a further

revival of British military development and production sustained in part by American funding.

Since then, Britain has maintained a broad base

of military industrial capability, including in the

nuclear propulsion and weapons areas. Britain

has not sought to develop its own ballistic

missiles since the late 1950s, but has otherwise

sought to keep an across-the-board defense

industrial capability. At the end of the Cold War

the Government could still claim that Britain

imported only about 10 percent of its defense

equipment needs. A further 15 percent was procured through collaborative development and

production programs such as the Tornado aircraft,

with 75 percent coming from indigenous sources.

Since the Conservative regime that came to

power in 1979, British governments have

believed that the most cost-effective way of sustaining British defense industry has been to place

it in private hands and to subject it to competitive forces. Thus previously state-owned firms

such as British Aerospace (BAe) and Rolls

Royce were launched on to the stock market in

the first half of the 1980s. British Shipbuilders

was broken up into a series of independent yards,

some of which were bought under management

buy-outs. The main munitions and guns manufacturer, Royal Ordnance, could not be sold to
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firms to bid for contracts. For Britain’s emerging requirement for two aircraft carriers, only

Thomson-CSF could be induced to bid against

the powerful consortium organized by BAe-GEC.

In the restructuring, the British Government

adopted a relatively relaxed attitude with regard

to foreign firms buying into UK defense industry. By 1999 Thomson-CSF was the owner of

the simulator companies Link Miles and

Redifusion, and had a large minority share in

Pilkington Optonics. Bombardier of Canada

owned Shorts that in turn had joint venture in

missiles with Thomson-CSF. Messier-Dowty of

France, part of the state-owned SNECMA group,

had bought Dowty’s undercarriage business with

plants in the UK and Canada. Lockheed Martin

and Raytheon owned manufacturing facilities in

the UK and were treated as British firms by the

Defence Industries Council, the industry’s body

for dialogue with the government. In the latter

part of the 1990s, Lucas, with a significant aerospace business in addition to its main automotive

components activities, merged with Varity of the

US and in 1999 the American firm TRW bought

the Lucas-Varity group.

Foreign direct investment into UK defense

businesses was balanced by extensive UK links

elsewhere. The major British firms BAe-GEC

and Rolls Royce recognized their need for

overseas capability and links. Shortly before

agreeing to sell its defense businesses to BAe,

GEC added to its portfolio of US investments

by paying over $800 million for Tracor. Earlier

in the 1990s Rolls Royce bought Alison in the

US. In Europe, BAe had bought Heckler and

Koch in Germany, but joint ventures were more

common than outright ownership. Matra-BAe

Dynamic (missiles), Matra-Marconi Space, and

Thomson-Marconi Sonars were all instances of

joint ventures with British participation. In the

late 1990s two important links were built with

Italy. Westland and Agusta began to establish a

joint venture in helicopters reflecting in part their

after earlier consolidation Britain had one combat aircraft company (BAe) and one jet engine

firm (Rolls Royce). One shipyard, VSEL at

Barrow, emerged as expert in building nuclear

submarines. When RO was privatized, it moved

out of main battle tank production leaving

Vickers as the UK’s sole firm for that platform.

Government efforts to stimulate Astra as a competitor for RO in ammunition production failed,

not least because the government lacked the

volume of business to sustain two companies.

From the late 1980s the pace of consolidation

quickened as firms either went out of business

or merged with others. GEC gained a firm grip

on shipbuilding by buying the Yarrow and VSEL

yards while Harland & Wolf in Belfast, Cammell

Laird on Merseyside and Swan Hunter in the

northeast did not survive as warship builders.

Only Vosper Thorneycroft, which enjoyed success as a builder of counter-mine vessels and

other smaller naval craft, prevented complete

GEC naval domination. In electronics, by the

end of the 1990s the number of suppliers had

dropped significantly. Ferranti had gone into

liquidation early in the decade as a result of a

poor investment in the U. S.; Plessey was sold

to GEC and Siemens, with the latter selling its

share to BAe in 1998. Thorn-EMI sold its

defense electronics business to Thomson-CSF

and in 1999 there were rumors that Racal would

sell its defense businesses having failed to win

the Astor contract. Of greatest importance,

towards the end of 1998 GEC put its defense

businesses up for sale with BAe providing the

highest and successful bid. Lockheed Martin and

Thomson-CSF were also understood to have

been interested in buying but would not match

the £7.7 billion that BAe was ready to pay. The

BAe takeover of GEC’s defense interests will

be completed during 1999, once UK regulatory

authorities give the green light.

Industrial consolidation in the UK meant that

the government, still wanting to use competitive

tendering, had more often to encourage foreign
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shared commitment to the EH.101. However,

GEC’s joint venture in defense missiles, radars

and electronics with Alenia of Italy became in

need some re-negotiation in the light of the

proposed BAe takeover of GEC and the merger

in France of Aerospatiale’s missile and other

businesses with those of Matra. In Sweden in

the mid-1990s BAe reinforced its commitment

to Saab and the Gripen project by taking a 35

percent share in Saab.

Looking forward, the ‘British’ character of

defense businesses on UK territory is likely to

decline further. More businesses in Britain are

likely to have continental European or North

American owners and British-owned businesses

will have more development and manufacturing

facilities elsewhere in NATO and in the wider

world. This will raise some delicate issues should

the UK’s Smart Procurement Initiative evolve

to the point where the government seeks to build

closer relationships with its suppliers at all stages

of the acquisition cycle. But the move to

transnational defense companies presents a

series of challenges, not just to Britain but to

European, even NATO governments as a whole.

Six governments of Europe, including the UK,

are addressing most of the issues involved in

working groups arising from the Letter of Intent

of July 1998 on Measures to Facilitate the

Restructuring of European Defence Industry.

Many surviving British defense businesses are

in a strong financial and technological position

to contribute to the emergence of a more European defense industrial base. BAe and Rolls

Royce, however, are prominent among those

that are also keen to maintain and improve their

access to the UK market. Other British-based

defense firms may appear as tempting purchases for American firms seeking to build a

manufacturing and even research presence in

Europe.

The six signatories of the Letter of Intent are

France, Germany, Italy, Spain, Sweden and the

UK. The six areas where they recognize a need

for ‘common solutions’ are security of supply,

export procedures, security of information, research and technology, treatment of technical

information (intellectual property rights) and the

harmonization of military requirements.
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Chapter 15

FUTURE TRENDS

whether the short-term financial gains seen so

far, can be turned into sustained improvements

and the delivery of defence equipment faster,

cheaper and with better performance, without

at the same time increasing the risks.

Reduction of formal approval points to two,

Initial Gate and Main Gate, may well be seen as

an increase in the level of risk from the previous

Downey procurement system where there were

four or more formal approvals, It will only take

a few perceived procurement failures of cost

overran or delayed delivery, for more checks

and balances or formal approval gates to be

instituted.

As the organisational changes begin to take

effect, future trends will see a much closer

working relationship between the major

organisations, the MOD Central Staffs (the CMs

in particular) the DPA, the DLO and the final

customer, the CinC. In order to achieve the aim

of Smart Procurement—faster, cheaper, better—

closer working relationships and therefore

organisational mergers may well develop. These

may occur naturally or be forced on the

organisation as a result of the need to reduce the

risk of any procurement failures with its

perceived wastage of public funds.

It cannot be emphasised too strongly that the

changes brought about in 1998/99 by the Smart

Procurement Initiative are major changes in both

process and organisation. As at mid-99 much of

the detailed procedures have still to be developed. Whilst some changes, such as forming

IPTs and changing the requirement process have

been instituted quickly, others, such as career

structures and the transfer of some civil servants

in IPTs between DPA and the DLO, are causing

much more difficulty. Organisational changes

are another major challenge particularly in the

MOD Central Staffs area with the Capability

Managers and associated programmes, plans and

finance staffs. The formation of the tri-Service

DLO is yet another extensive change affecting

the whole procurement process. In both these

areas the organisation and the procedures are

far from clear and at the same time the MOD

and Services are making major changes to the

whole budget, finance and LTC process. Add to

this the change in status of DERA and the DPA

to different forms of agency status with the remit

to act in a commercial or business orientated

way and one can see that there is much scope

for continued change in the next five years. The

cultural change required within the MOD, the

Services and from industry cannot be underestimated. It will take some time to establish fully
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FURTHER READINGS

Defence Procurement Agency homepage http:/

/www.mod.uk/dpa/

Defence Evaluation and Research Agency http:/

/www.dra.hmg.gb/html/homepage.htm
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ENDNOTES

1. PAO can also refer to the Principal Accounting Officer, of which there is only one, the

PUS.

2. In the UK it is more usual to refer to procurement which incorporates requirement +

cost + support.

3. The cycle is a development of the previous

Downey Cycle that was mandated after the

major review by Downey of projects that had

gone wrong.

4. In the UK partnering means a close working relationship rather than a partnership

which would have legal liabilities to both

partners e.g. responsibilities for the debts of

each other.

5. The Government’s Strategic Defence

Review White Paper 1998 – Supporting

Essay 10.

6. Previously, parallel project and support

teams existed in the DPA and in CDL’s

organisation to gradually transfer the equipment support functions as the equipment

neared entry to service.
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GLOSSARY

ACDS Assistant Chief of Defence Staff

AOR Acquisition Organisation Review

ARP Applied Research Programme

Atomised Refers to equipment requirements which are written as single statements

AUS Assistant Under Secretary

Business Case The documents which together prove the need for the equipment

CALS Continuous Acquisition and Logistic Support

CAS Chief of the Air Staff

CDI Chief of Defence Intelligence

CDL Chief of Defence Logistics

CDP Chief of Defence Procurement

CDP & CE Chief of Defence Procurement and Chief Executive

CDS Chief of the Defence Staff

Central Customer The original sponsor of the equipment or shortfall in capability

CGS Chief of the General Staff (i.e., head of the Army)

CinC Commander in Chief

CIS Command Information Systems

CLS Contractor Logistic Support

CM Capability Manager

CNS Chief of the Naval Staff

COEIA Combined Operational Effectiveness and Investment Appraisal

COS Chief of Staff

COTS Commercial off the Shelf

CRP Corporate Research Programme

CSA Chief Scientific Adviser
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CWG Capability Working Group

DCD(C) Deputy Chief of Defence Staff (Commitments)

DCDP(Operations) Deputy Chief of Defence Procurement (Operations)

DCDS(Sys) Deputy Chief of Defence Staff (Systems)

DERA Defence Evaluation and Research Agency

DESO Defence Export Services Organisation

DIS Defence Intelligence Staff

DLO Defence Logistic Organisation

DPA Defence Procurement Agency

DUS Deputy under Secretary

EAC Equipment Approvals Committee

EIPT Embryo Integrated Project Team

EP Equipment Plan

FPMG Finance Planning and Management Group

HCDC House of Commons Defence Committee

HL-URD High level-User Requirement Document

ILS Integrated Logistic Support

Initial Gate The first formal project approval point

IPT Integrated Project Team

IPTL Integrated Project Team Leader

ISD In-Service date

LSA Logistic Support Analysis

LTC Long Term Costing

Main Gate The second and major project approval point

MLU Mid-life Upgrade (or update)

MOD Ministry of Defence

NAPNOC No acceptable price, no acceptable contract
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NATO North Atlantic Treaty Organization

OA Operational Analysis

OR Operational Requirement

PAO Principal Accounting Officer. The MOD’s single accounting officer.

PAO Principal Administration Officer. The senior responsible officer for a

Command

Peer Group The grouping of Integrated Project Teams within the DPA

PES Public Expenditure Survey

PFI Private Finance Initiative

Prime The contractor who is in overall charge

PUS Permanent Under Secretary

SDR Strategic Defence Review

SoN Statement of (mission) Need

SPI Smart Procurement Initiative

SRD System Requirement Document

STP Short Term Plan

TLB Top Level Budget (holder)

TLMP Through Life Management Plan

URD User Requirement Document

VCDS Vice Chief of the Defence Staff

WEAG Western European Union Armaments Group

WEU Western European Union

WLC Whole life costs

2nd PUS The second Permanent Under Secretary
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Part 4 The United States

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PART 4

THE UNITED STATES
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Part 4 The United States

4-3

Chapter 1

HISTORY AND TRADITIONS

“Each jammer created a “strobe,” an opaque wedge shape on the

U.S. radar screens, so that they looked like the spokes of a wagon

wheel. Since every such spoke was particular to each of the radar

transmitters, the controllers were able to compare data, triangulate,

and plot the position of the jammers. The Tomcats closed in quickly

while the radar-intercept officers in the back seat of each fighter

flipped the Phoenix missile seekers to home-on-jam guidance mode.

Instead of depending on the aircraft’s own radar for guidance the

missiles would seek out the noise transmitted from the badgers.”

(Red Storm Rising, Clancy, page 642.)

involved in this business. There are over 1000

large contractors and small businesses who

employ more than two million people to provide the services, equipment and

weapon

systems

needed

by the military. How

does this

system operate?

Who are the players? What management processes have been devised to efficiently produce

products and services for the DoD? This chapter

is designed to provide an introduction for those

new to the business of United States military

acquisition.

THE GOVERNMENT OF

THE UNITED STATES

“This budget is dead on arrival,” entombed

a Senate leader with the submittal of the

THE UNITED STATES

It took thousands of years of warfare to move

from stones to cannons. It has taken less than

100 years to move from the first airplane used

in battle to the technologically sophisticated

Tomcats described in Tom Clancy’s Red Storm

Rising. The last fifty years, from the end of

World War II to the present, has seen the development of weapon systems to meet the needs of

the warfighters on land, at sea, in the air and

beyond. It has consumed billions of dollars,

employed millions of people, and led to the

development of technological weapons that use

sound, bits and bytes, and electrons bouncing

around. As weapons have taken on greater complexity, the government’s approach to the

development of these systems has evolved its

own complexity. In the terminology of the

trade—acquisition has become a large, complex,

multifaceted business. The 1999 fiscal year budget for the Department of Defense (DoD) is over

$260 billion, of which $85 billion is for the

research, development and production of

weapon systems. The 1999 budget represents a

60 percent decrease in the procurement budget

since the cold war years of the 1980s. Currently

there are 149,000 military and civil servants
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Department of Defense budget by President

Ronald Reagan in 1982. In most other countries,

a budget submitted by the president or prime

minister may be discussed or debated, but then

it is voted upon and approved with few changes.

The United States political system operates differently. In the Fiscal Year 1998 budget, the Office of Management and Budget (OMB) identified a list of 254 programs or projects not requested by the executive branch that were added

to the defense budget. The opposite is just as

normal where programs are zeroed out of the

budget. Unlike the parliamentary systems in

which the party in power “runs” the legislature

and the governmental agencies, the American

presidential system has inherent in its constitution a system of political checks and balances

to prevent any one branch of government from

gaining too much power. This balance-of-power

mechanism is a key differentiator of the American political model. To understand the procurement of weapon systems in the United States’

DoD, one must understand not just the workings of the executive branch of government, but

the workings of the legislative branch. The

following provides an introduction to the framework and workings of the government to aid in

understanding the defense acquisition business.

It was more than a decade after the first shot

was fired at Concord and Lexington in 1775

before our new democratic form of government

was fully developed. From the Declaration of

Independence in 1776 through the adoption of

the Articles of Confederation in 1779, the ratification of a new Constitution in 1788, and the

ultimate creation of a new government in 1789

–the nation’s leaders grappled with the best way

to govern a country. The first set of rules to

operate the country were the Articles of Confederation. In protecting the unique interests of

each state, the Articles created a weak central

government with neither the ability to levy taxes

nor to provide for the national defense.

In 1785, delegates assembled from the 13

colonies to “fix” the Articles of Confederation.

The result was not a fix, but an entirely new

Constitution. Influenced by the ideals of the

ancient Roman Republic; the ideas of the philosophers like Rousseau, Montesque, and Locke;

and in response to the problems caused by

England’s attempts to govern the colonies, the

Constitutional Convention participants developed a federal system of government. In the

words of Thomas Jefferson, “Hear no more of

the faith of men but bind them down with the

chains of the Constitution.” This constitutional

“chain” provided for a structural separation of

powers among three branches of government –

executive, legislative, and judicial. This earliest

of written constitutions spelled out the duties

and responsibilities of each branch, with each

branch serving as a check on the powers of other

branches. The constitution also fixed one of the

problems of the Articles by providing for strong

central government and for the national defense.

The President

Article II of the United States Constitution

stipulates that the President is Commander-inChief of the armed forces. He also has the dual

role of being Head of State and head of the

government. As Head of State, the Constitution

states, “he shall receive ambassadors and other

public ministers.” Head of State duties are primarily ceremonial, such as those often captured

on television news reports. The image of the

military band playing “Hail to the Chief” while

the President escorts a world leader to a speaker

podium are typical scenes that the title “Head

of State” evokes in most Americans’ minds. The

President is also the Chief Executive; in other

words, he is charged with running the government. The Constitution invests the executive

power in the president. In the modern state, this

power is exercised over a wide range of government organizations and programs, such as those

dealing with the environment, military veterans,
Part 4 The United States

4-5

labor, foreign affairs, and national defense. To

help him in this capacity, the President nominates and appoints, with the advice and consent

of the Senate, 13 Cabinet members and over

2000 political appointees to work within the

departments and agencies of government.

Although the constitution delegates the power

of Commander in Chief of the military to the

President, the power to declare war rests solely

with the Congress. Further, even though the

president is in “charge” of the military, the power

to determine the size of the armed forces, the

rules that govern the military, and the funding

for the military forces and their equipment are

vested only in the Congress.

As Chief Executive, the President has, at times,

taken specific interest in defense acquisition problems and issues and directed specific changes.

Examples of this include the following:

• Executive Order (E.O.) 12353, in 1982,

which directed procurement reforms and also

created a Federal Acquisition Regulation;

• National Security Decision Directive (NSDD)

219, in 1986, which directed implementation

of the Packard Commission’s recommendation on management of defense acquisition;

and

• National Security Review (NSR) 11, in 1989,

which directed a review of the defense

acquisition business and a report outlining the

changes as a result of the review.

The Legislature

“Congress is so strange. A man gets up to speak

and says nothing. Nobody listens—and then

everybody disagrees.”

– Boris Marshalov, a Russian observer

after visiting the House of Representatives

“To retain respect for sausages and laws, one

must not watch them in the making.”

– Otto Von Bismarck

Contentious, confusing, complicated—the

workings of the United States Congress can be

a mystery to foreign visitors and, in many cases,

even to American citizens. During the Constitutional Convention in 1788, the delegates debated

the structure of the Congress.

States with large populations

were pitted against states

with small populations.

Each was concerned with

the fairness of the representation. Proportional

representation would

benefit the large states at

the expense of the small

states, thus putting small

states like Rhode Island

at the mercy of large

states like Virginia, which by virtue of their larger

voter constituency could control the government.

Out of this concern came the “Connecticut Compromise” which created a bicameral legislature,

or two-house system—the Senate with two

representatives from each state and six-year

terms; and the House of Representatives with

proportional representation and two-year terms.

Because of the nature of its organization, each

of the two bodies of Congress has its own character. The House of Representatives was

designed to “have an immediate dependence on,

and an intimate sympathy with, the people.”1

Elected every two years, House members campaign for re-election almost constantly. They

respond to the constantly changing views of the

electorate and are more contentious in debate.

The Senate, in which members serve 6-year

terms, tends to be more collegial and responds

less readily to the popular passion of the

moment.

U.S. CONGRESS
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Congress plays a significant constitutional role

in the management of the Department of

Defense. The Constitution gives Congress the

general power to “...lay and collect taxes, duties, imports, and excises, to pay the debts and

provide for the common defense and general

welfare of the United States...” It also gives Congress other powers, such as the following:

Clause 11 –

To declare war, grant letters of marque and

reprisal, and make rules concerning captures

on land and water;

Clause 12 –

To raise and support armies, but no appropriation of money to that use shall be for a

longer term than two years;

Clause 13 –

To provide and maintain a navy;

To make rules for the government and

regulation of the land and naval forces;

The writers of the Constitution were very concerned about the concentration of military power

within the executive branch. In the Federalist

Papers written by Alexander Hamilton and

James Madison, the role of the legislative versus the executive branch is clearly spelled out in

the following words: “...the whole power of

raising armies [is] lodged in the LEGISLATURE, not in the EXECUTIVE; ...and ... that

clause ... forbids the appropriation of money

for the support of an army for any longer period

than two years a precaution which...will appear

to be a great and real security against the keeping up of troops without evident necessity.”2

The two year restriction for the appropriation

of funds for defense indicates the strong concern the representatives had at the Constitutional Convention about the role the legislative body was to play in the management of the

military. “The legislature of the United States

will be OBLIGED...once at least in every two

years, to deliberate upon the propriety of keeping a military force on foot; to come to a new

resolution on the point; and to declare their sense

of the matter, by a formal vote in the face of

their constituents. They are not AT LIBERTY

to vest in the executive department permanent

funds for the support of an army...”3

Throughout most of its 200-year history, the

American political system has been a two- party

system—Democrat and Republican. Minor parties have played a very small role. While each

party generally has a unique ideological bent,

they are not ideology parties in the European

sense. Each party includes a wide variety of

political opinion—from liberal to conservative.

Another difference in a typical parliamentary

system is that party loyalty is critical to keeping

the government in power. By contrast, party

loyalty in the United States is very weak. It is

also not uncommon in the U.S. that one or both

houses of Congress are controlled by one party

and that the White House (the executive branch)

is controlled by another party. This is the current case with the Senate and the House controlled the Republicans while President William

J. Clinton, a Democrat, is in the White House.

Congressional Committees

Congress on the floor is Congress in exhibition,

Congress in Committee is Congress at work.

– Woodrow Wilson, 1885

There are 535 members of Congress. To efficiently deal with the multiplicity and complexity of the problems of government, Congress has

been organized into a variety of committees that

focus on specific areas of responsibility. It is in

these committees where the work of Congress

takes place. The majority party in each house

controls not only that house and its agenda but

also the committees that run the chamber. Each

committee is chaired by the majority party,
Part 4 The United States

4-7

usually a senior member of that party, with the

majority party having a majority of the seats on

the committee. Additionally, each committee

further subdivides the work and assigns it to

subcommittees. This is where much of the

discussion, hearings, and work takes place in

drafting legislation. The structure of a subcommittee parallels that of a full committee,

with the majority party chairing the subcommittee and constituting the majority of its

members.

The committees that most influence the DoD

and the defense budget are as follows:

Senate:

Senate Armed Services Committee (SASC)

Subcommittees dealing with defense issues

Emerging Threats and Capabilities

Air-Land

Personnel

Readiness and Management Support

Seapower

Strategic

The SASC is responsible for a wide variety of

policy and budgetary issues that impact the

defense acquisition business—aeronautical and

space activities associated with the development

of weapon systems or military operations;

department organizational structures; maintenance and operations of military research and

development; national security aspects of

nuclear energy; pay, promotions, and retirement;

and strategic and critical materials.

Senate Appropriations Committee (SAC)

Subcommittees dealing with defense matters

Defense

Foreign Operations, Export Financing

 and Related Programs

Military Construction

The SAC provides new spending authority for

defense programs, operations, and military

construction. It also writes legislation defining

how the monies it has appropriated can be spent.

House of Representatives:

House Armed Services Committee (HASC)

Subcommittees dealing with defense

matters:

Military Installations and Facilities

Military Personnel

Military Procurement

Military Readiness

Military Research and Development

Morale, Welfare and Recreation

Merchant Marine

The HASC has wide-ranging jurisdiction,

including scientific research and development

in support of the armed forces and control of

the strategic and critical military material. It also

oversees international arms control. Of particular interest to those involved in acquisition are

the Military Procurement, Readiness and

Research and Development subcommittees.

Through its Subcommittee on Military Procurement, the annual authorization for the procurement of military weapon systems, equipment and

nuclear energy is prepared. The Subcommittee

on Military Readiness includes authorization for

operations and maintenance (O&M), readiness

and preparedness. The HASC’s Subcommittee

on Military Research and Development has

jurisdiction over aeronautical and space activities, military research and development (R&D),

the DoD generally, nuclear energy, pay, promotions, and the strategic and critical military

material.

House Appropriations Committee (HAC)

Subcommittees dealing with defense

matters:

Military Construction

Defense

The HAC, like the SAC, provides new spending

authority for defense programs, operations, and
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4-8

military construction. It also writes legislation

on how the monies it has appropriated can be

spent.

There are various other committees, such as the

Budget Committees and the Government

Reform and Oversight Committee, with Subcommittees—National Security, International

and Criminal Justice, which have legislative

oversight of defense and government activities

which from time-to-time play a role in crafting

acquisition legislation. Two other organizations

of Congress, the Congressional Budget Office

and the General Accounting Office, also play a

role in acquisition, which is discussed later.
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Chapter 2

CONGRESSIONAL INVOLVEMENT

IN ACQUISITION

system. Figure 1 provides a list of some of the

major acts which have changed the organizational structures and policies, increased ethics

requirements and mandated education and

training requirements for the acquisition workforce. In the last five years, several news laws,

such as the Federal Acquisition Streamlining

Act, have been passed to remove many of the

burdensome laws passed by prior congresses.

As Figure 1 indicates, Congress plays a major

role by enacting major legislation for the

business of defense acquisition. Also, every year

Congress enacts, through its authorization and

appropriations legislation, changes in the

acquisition system. Some of these changes are

minor, but some have included changes that have

had a significant impact on the acquisition

business.

Congress and The Budget

“The power of the purse has always resided in

Congress: it represents its ultimate weapon in

dealing with the executive branch.”4

 In February of every year, the administration submits the

President’s budget to Congress. For the DoD,

this budget culminates three years of work to

justify the dollars needed for national defense.

The budget goes to the House and Senate budget committees which issue a Budget Resolution that provides the top line budget for DoD.

The work of drafting the legislation needed to

authorize and appropriate defense funds begins

in the proper committees and subcommittees.

The subcommittees hold hearings and then

F-14

Congress has always played a significant role

in overseeing the DoD and DoD’s predecessor

organizations. In 1809 Congress issued the first

governmentwide procurement statute mandating executive-legislative appointment of what we

today call “contracting officers.” Congress continued to play a significant role in acquisition

throughout the last century, including the

methods of procurement—formal advertising,

creating advisory boards, and dictating the sizes

and speeds of ships. Throughout World War I

and World War II for example, Congress passed

legislation to prevent unscrupulous contractors

from overcharging

the government.

The modern

era of congressional involvement in acquisition began with

the Armed Services

Procurement Act of 1947. The purpose of this

law was to standardize contracting methods used

by all of the services. As a result, the first joint

DoD regulation was created—the Armed Services Procurement Regulation (ASPR). Congress, over the years, has passed other laws

whose purpose has been to shape the

department’s acquisition policies and organizations. In the last twenty years the amount of

legislation involving the defense business has

increased. Under the Reagan administration,

with the significant increase in the defense

budget, Congressional oversight increased.

Almost every two years, major legislation was

passed to change some aspect of the acquisition
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Office of Federal Procurement Policy Act of 1983

Established a central office to define overall government contracting and acquisition policy and to

oversee the system, among other things.

Competition in Contracting Act (CICA) of 1984

Revised government policy to mandate competition and created an advocate for competition, the

Competition Advocate General.

DOD Procurement Reform Act 1985

Defense Procurement Reform Act established a uniform policy for technical data and created a

method for resolving disputes.

Defense Procurement Improvement Act of 1986

Provided policy on the costs contractors submitted to the Government for payment and on conflicts of interest involving former DOD officials.

Defense Acquisition Improvement Act of 1986

Among other things, created the Under Secretary of Defense (Acquisition & Technology)1

.

DOD Reorganization act of 1986 (commonly referred to as Goldwater-Nichols Act)

Among other items, revised the Joint Chiefs of Staff role in acquisition and requirements determination.

Ethics Reform Act of 1989

As a result of the “Ill-wind” procurement scandal Congress mandated more stringent ethics laws.

Defense Acquisition Workforce Improvement Act of 1990

Mandated education, training and professional requirements for the defense acquisition corp.

Federal Acquisition Streamlining Act (FASA) of 1994

Repealed earlier laws on acquisition, such as, the Brooks Act provisions on computer acquisitions.

Federal Acquisition Reform Act (FARA) of 1996

Revised procurement laws facilitate more efficient competition; included improving debriefings,

limiting need for cost/pricing data and emphasizing price versus cost negotiations, among other

items.

Cohen-Clinger Act of 1996

Included changes to competition practices, commercial item acquisition, and included fundamental changes in how information technology equipment is purchased.

Figure 1. Major Acquisition Acts

“markup” the bill and send it to the full committee. The full committee will debate, amend

and report out the bill to the entire House or

Senate for its consideration. After the vote is

taken by both houses, a conference committee

is established to “iron out” any differences. The

bill is then returned to both houses and voted on

a second time. If passed, the bill is sent to the

President for his signature or, if he disapproves

of the bill, for his veto.

“The exclusive privilege of originating money

bills will belong to the House of Representatives.”5

 The constitution gives the lower house,

the House of Representatives, the authority for

funding bills thus—“All bills for raising revenue
Part 4 The United States

4-11

shall originate in the House of Representatives;

but the Senate may propose or concur with

amendments as on other bills.”

The Congress has established special budget

approval procedures for approving budgets for

the various departments of government. “Every

committee wants a hand in budget making.

Hence, Congress has a two-step financial

procedure: authorization and appropriations.

Congress first passes authorization laws that

establish federal agencies and programs and

recommend funding them at certain levels. Then

it enacts appropriations laws that allow agencies to spend money. An authorization then is

like an “IOU” (I owe you) that needs to be validated by an appropriation.”6

 While there are

some exceptions to this procedure, the process

of approving the next years’ budget includes both

appropriation and authorization. The SASC and

HASC committees are the authorizors, while the

HAC and SAC are the appropriators.

This process, from the President’s budget submittal through approval by Congress and the

final signature by the President takes approximately eight months (see Figure 2). Debates,

hearings, and the committee processes, aggravated by the controversial nature of the issues,

often delay the passage of bills in Congress. To

ensure the smooth operation of government

under these conditions, Congress may pass

interim legislation, referred to as “continuing

resolutions,” that allows government agencies

to continue all existing programs, at prior-year

amounts. Such interim legislation does not

usually allow for the initiation of any new

programs. The implementation of an interim

budget has become the standard method for

operations since 1979.

Congressional Oversight

The SASC and HASC conduct their “oversight

responsibilities... primarily within the context

of the Committee’s consideration of the annual

defense authorization bill.” 7 Every spring, key

administration personnel, such as the Secretary

of Defense and the Secretaries of the Army,

Navy and Air Force, along with the senior

Figure 2. Typical Flow of Budget

Both houses pass bills

to appropriate money

to federal agencies

President’s

budget

submission

February April June/July

House and Senate

consider non-binding

budget resolutions

Legislation is

reconciled by

both houses

New

fiscal year

begins

October 1 September July/October

President signs

or

vetoes bills
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military leaders, are called to testify before the

appropriate subcommittees on the President’s

budget. The subcommittees will also have hearings with other key defense acquisition personnel

on the budget, acquisition policy and programs.

When Congress has a specific interest or concern, investigative committees will be created.

They will have hearings on specific problems

or issues which arise, or when Congress is

interested in a department’s implementation of

prior legislation. Again, government acquisition

personnel, along with industry or industry-association representatives, may be called to

testify.

General Accounting Office (GAO)

For more than 75 years, the GAO has been the

“watch dog” of Congress and a key player

involved in overseeing the acquisition system.

The GAO is headed by the Comptroller General

of the Untied States, who is appointed by the

President and confirmed by the Senate.

As the investigative arm of Congress the GAO

is frequently asked by committee chairpersons,

ranking minority members, and other members

of Congress to review programs or issues of

concern8

. Recent report topics provide an

example of the scope of GAO reviews. They are:

(1) Acquisition Planning for the Army Medium

Trucks; (2) Defense Industry Restructuring and

its savings; (3) Weapons Acquisition Systems

Planning, (4) Army Modernization plans, (5)

Defense Trade Data issues; and (6) international

cooperative programs, such as Medium

Extended Air Defense System (MEADS).

The committees often use the GAO studies and

recommendations as a basis for hearings on

problems in acquisition management and

programs. When a committee feels new legislation is necessary to correct problems in the

acquisition system, the GAO may be called upon

to provide legal advice or review proposed

legislation. In fiscal year 1998 the GAO prepared 1573 audits and evaluations for Congress,

1135 reports to congressional committees,

presented 181 formal congressional briefings,

and 256 congressional testimonies.

The GAO also has a significant role in the

procurement/contracting process. It is the bid

protest authority for any contractors who may

wish to challenge an agency’s award. In 1997

the GAO received 1087 bid protests, and ruled

in the protesters’ favor 26 times, sustaining the

department in 97 percent of the cases. It also

provides assistance to other government agencies

in interpreting the laws governing the expenditure of public funds and adjudicating claims for

and against the federal government.
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Chapter 3

THE CABINET

members of the legislative branch of government. The constitution specifies that, “No

senator or representative shall, during the time

for which he was elected, be appointed to any

civil office under the authority of the United

States, which shall have been created, or the

emoluments whereof shall have been increased

during such time; and no person holding any

office under the United States, shall be a member of either house during his continuance in

office.”

The US cabinet is currently composed of 14

department, as follows:

Department of Agriculture

Department of Commerce

Department of Defense

(Secretary, William S. Cohen)

Department of Education

Department of Energy

Department of Health and Human Services

Department of Veterans Affairs

Department of Housing and Urban

Development

Department of the Interior

Department of Justice

Department of Labor

Department of State

Department of Transportation

Department of Treasury

From time to time, other positions, such as the

White House Chief of Staff to the President, the

Director of the Office of Management and Budget (OMB), and the “Drug Czar,” have been

given cabinet-level rank. There are many other

agencies of government, such as the National

Unlike the roles of the President and the Congress, the roles of the members of the President’s

Cabinet are not created by the Constitution.

(there is no constitutionally created cabinet). The

Constitution recognized the need for ministers

and other government officials. They serve as

the advisors to the President on policy matters.

They also “run” the government by implementing the programs of the Administration. The

cabinet members are nominated and appointed

by the President with the approval (advice and

consent) of the Senate. Members of the United

States Cabinet, unlike those in other countries,

are responsible to the President rather than the

legislature. They serve at the pleasure of the

President and can be removed from their jobs

by the President for any reason.

Traditionally, cabinet members are from the

same party as the President, although, occasionally, individuals from the other party will be

selected to fill posts. A good example of this is

Secretary of Defense William S. Cohen, who is

a member of the Republican Party and was a

former Republican Senator from Maine. As is

the case in other cabinets around the world,

particularly those with coalition governments,

individuals are selected for Cabinet posts to

satisfy various factions within the President’s

party—to achieve diversity objectives, to ensure

geographic representation, and to reward

supporters. In general, however, political

appointees are chosen because they share the

same political beliefs the President has and can

carry out his agenda.

Unlike some other countries, the members of

the U.S. Cabinet cannot simultaneously be
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Air and Space Administration (NASA), that do

not have cabinet rank but nevertheless carry out

important national objectives.

To assist the politically-appointed cabinet members, the United States Government has more

than 2800 political appointees. In the United

States government, political appointees fall into

three categories—(1) Presidential Appointments

requiring Senate (PAS) Confirmation (650

positions); (2) non-career Senior Executive Service (SES) positions (restricted to 10 percent of

the Senior Executive Service, currently 650

positions); and (3) Schedule C appointees

(personnel assistants, secretaries, etc., approximately 1500).9

 In the Department of Defense

there are 243 political appointees, of which 48

require senate confirmation.10 They hold key

positions such as Secretary of Defense, Secretaries of the Army, Navy, and Air Force, and

key acquisition positions such as the

UnderSecretary of Defense (Acquisition and

Technology) and Assistant Secretary of the Army

(Acquisition, Logistics and Technology), Assistant Secretary of the Navy (Research, Development and Acquisition), and Assistant Secretary

of the Air Force (Acquisition).
Part 4 The United States

4-15

Chapter 4

DEPARTMENT

OF DEFENSE

agencies play a support role to acquisition, such

as the Defense Contracting Management Command (DCMC),

which

provides

contract

administration for the

department,

and the Defense

Contract Audit

Agency (DCAA) which provides audit support

for the services and defense agencies.

This chapter will primarily focus on the Office

of the Secretary of Defense (OSD) and the

Services since the primary role of organizing,

training and equipping the military rests with

each Service. Each service is headed by a

political appointee nominated by the president

and approved by Congress. Each Service Secretary

reports directly to the Secretary of Defense.

 OSD is the core staff that provides advice and

support to the Secretary. OSD consists of

approximately 2,000 personnel that, through the

Secretary, sets “general policies and programs”

and provides “general direction, authority, and

control” of the military departments and defense

agencies. As shown in Figure 4, the Secretary is

supported by a deputy secretary as well as several undersecretaries that have considerable

influence in acquisition. The person charged

with responsibility for acquisition matters within

the secretary’s office is the Under Secretary of

For the first hundred and fifty years, the United

States had two separate departments, the War

Department and the Department of the Navy,

managing the military business. After the end

of World War II, a variety of factors led many

senior civilian and military leaders to see a

need for a more unified structure. Specific problems during the war, such as the allocation of

resources between the services, priorities, and

command arrangements, were all felt to have

had a negative affect on the war effort. In 1947,

a single “unified” structure was created with the

passage of the National Defense Act of 1947.

However, as one observer noted, “Congressmen

have traditionally seen their ability to influence

defense policy enhanced under a decentralized

structure and have feared loss of influence under

a more centralized one...America’s defense

establishment has reflected the pluralistic and

decentralized nature of America’s national government system.” Thus, the three services were

still left with a significant amount of authority

and responsibility.

There have been changes since then, most

strengthening the Secretary of Defense and his

office11 with authority over the services.12 For

the purposes of this chapter, the department can

be divided into two elements—the warfighting

elements and the acquisition and logistics support elements. Figure 3 depicts an overall view

of the department with the warfighting elements

being the Unified Commanders for each theater.

The three major organizations involved in

acquisition within the Department of Defense

are the Army, Navy and Air Force. Other defense

THE PENTAGON
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-16

Figure 3. Department of Defense Warfighting Elements

Figure 4. Office of the Secretary of Defense (as of May 1998)

Chairman,

Joint Chiefs

of Staff

Office of

the Secretary

of Defense

Department

of

the Navy

Department

of

the Army

Department

of

the Air Force

Defense

Agencies

Joint

Staff

Unified

Command

Secretary

of Defense

UNIFIED

Regional Commands Functional Commands

U.S. European Command U.S. Space Command

U.S. Pacific Command U.S. Special Operations Command

U.S. Atlantic Command U.S. Transportation Command

U.S. Southern Command U.S. Strategic Command

Secretary of Defense

Deputy Secretary of Defense

Director,

Operational Test

and Evaluation

USD

(Personnel

and Readiness)

USD

(Comptroller)

Director,

Program Analysis

and Evaluation

Defense Contract

Audit Agency

(DCAA)

USD

(Policy)

ASD

(International

Security Policy)

Defense Security

Cooperation

Agency (DSCA)

ASD

(International

Security Affairs)

USD

(Acquisition

and Technology)

*ASD

(Command, Control,

Communication,

and Intelligence)

DASD,

C3I/Acquisition

for acquisition matters

*Serves as DoD CIO and MDA for major AIS
Part 4 The United States

4-17

Defense for Acquisition and Technology

(USD(A&T)).

The Development of

Military Requirements

As the 21st Century approaches, the Department

of Defense and the military services strive to

maintain air and space superiority, meet rapid

mobility requirements, maintain naval superiority and be a force projection army. The process to determine future military needs is

referred to as the Requirements Generation

Process. All acquisition programs must be based

on identifiable, documented, and validated

mission needs. The Joint Chiefs of Staff (JCS)

is the organization responsible in DoD for setting

requirements policy. For large dollar programs,

referred to as Major Defense Acquisition Programs (MDAP) or Acquisition Category (ACAT)

I programs, the JCS is the approval authority

for the requirement. For smaller dollar programs,

referred to as ACAT II and III programs, the

individual services develop their own requirement in coordination with the other services and

defense agencies.

To provide approval of a requirement that could

result in an ACAT I program, i.e., to validate

the mission need, a forum called the Joint

Requirement Operational Council (JROC) was

created. The Vice-Chairman of the Joint Chiefs

chairs the council with the Vice-Chiefs of the

military services as voting members (see Figure 5). For programs that fall under the automated management information system programs, the JROC reviews and decides whether

to be the validation and approval authority. If

the JROC passes, the Assistant Secretary of

Defense for Command, Control, Communication and Intelligence (C3I) becomes the approval

authority. While the JROC is primarily involved

in requirements approval, it also participates in

the Defense Acquisition Board (DAB) to ensure

that the program is meeting the military needs.

The JROC is a change from the historical way

of the military services deciding military requirements and the next generation of weapons. The

JROC has also opened the capability for the

warfighting, unified commanders to play in this

process. Prior to the JROC meetings, a lower

level board, the JROC Review Board, previews

the requirements documentation to work out

concerns and to frame matters for the JROC.

Figure 5. The Joint Requirement Operational Council (JROC)

• Validate and approve ACAT I/ID

• Recommend lead service to DAB

• Validate key performance

parameters in the ORD

• Approve the ORD

• Delegate ORD approval authority

MNS

ORD

Vice Chief of Naval Operations

Army Vice Chief of Staff

Marine Corps Assistant Commandant

Air Force Vice Chief of Staff

MAJCOM Req

Vice Chairman JCS
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-18

The Military Departments

Requirements Processes

To develop a weapon system is expensive. A

major weapon system will require billions of

dollar to develop and field. When the services

look at shortfalls in meeting mission requirements, they first will evaluate changing military

doctrine or tactics (referred to as non-materiel

solutions) as the first choice. If a non-materiel

solution does not work, then buying an existing system commercial or non-developmental item (NDI) is the preferred solution. By

policy, the last choice for a military service is

the development of a new weapon system.

Prior to beginning the requirements generation

process, the department develops a series of

military planning documents—part of the long

term planning process which provides strategic

military planning guidance. This is captured in

a series of documents beginning with the

National Military Strategy (NMS). The development of military requirements, and the planning, programming and budgeting system all

reflect a direct linkage with this strategic planning process. The Defense Planning Guidance

(DPG), the Chairman of the Joint Chiefs of

Staff’s “Joint Vision Capabilities Plan,” the unified Commanders’ “Commanders in Chief

Integrated Priority Lists (CINC IPL),” and other

joint and service long range plans all provide

the framework for the requirements generation

process to operate. The Services’ long-term technology plans use this guidance for planning their

investment of R&D dollars to maximize their

effectiveness.

The Requirements Generation Process begins in

the services, and each of the military services

has taken a different approach to managing this

process. The Army and Navy have a centralized

process while the Air Force’s process is more

decentralized. However, each service determines

mission needs as a result of ongoing assessments

of current and projected capability. Assessment

of identified deficiencies, such as occurred after

Desert Storm, has led to the establishment of

new requirements and new programs. The Joint

Direct Attack Munitions (JDAM) was such a

program. During ideal weather conditions, for

an air war, it was noted that there were still many

days when missions had to be called back

because of the lack of a capability to find targets.

The JDAM was required to meet that mission

hole, i.e., provide all weather, accurate, and low

cost capability to attack a broad spectrum of fixed

and relocatable targets. In this case an identified deficiency. Besides establishing new operational capability or improving an existing

warfighting capability, mission needs can also

be used to reduce costs or enhance the logistics

performance of systems. Requirement changes

can occur in the order of doctrine, training,

leader development, organization, soldiers, and

materials.

The two main documents used to capture

requirements are the Mission Needs Statement

(MNS) and the Operational Requirements Document (ORD). The MNS provides, in broad, nonsystem specific, operational terms, the

warfighter’s need. The concept is to provide, in

a brief document (five pages), the user’s need,

which will become the basis for a material

solution. Once MNS is validated, it starts the

acquisition process looking at possible solutions

for the MNS. The ORD becomes more specific

and provides the operational parameters, such

as speed, durability, reliability and precision

among other items, to include thresholds (minimums) and objectives (desired outcomes). It is

solution-oriented and based upon the best alternative choices. The ORD is a living document

and will evolve as a program matures. The ORD

is the link between the MNS and the acquisition

process.
Part 4 The United States

4-19

Service Requirements Organizations

Department of the Army13

In the Army, the Training and Doctrine Command (TRADOC) has the central responsibility

for developing and approving all warfighting

requirements. Within TRADOC, this is accomplished both at the headquarters level and

through the various branch schools. Besides

training, the Army’s branch schools have responsibility for doctrine and requirements development. Each school has a combat development

division, staffed by representatives of the proponent branches, such as artillery, infantry or

ordnance. While requirements may evolve from

a variety of organizations, such as major commands, field commanders, TRADOC schools,

and others, the Army branch schools, such as

the Air Defense Artillery School, Fort Bliss, Tx,

will define, document and defend requirements.

(See Figure 6.) The schools are responsible for

preparing the ORD and the MNS.

The Army uses Integrated Concept Teams (ICT)

to improve development of requirements. The

ICT is made up of members from TRADOC,

Army Materiel Command (AMC), other Army

commands, other military services, academia,

industry, and others. The ICT may be a tier-one

or tier-two ICT. HQ TRADOC tier-one ICTs

are established for requirements documentation

where there are multiple proponents, joint

service impacts or high management interest/

visibility (HQDA, OSD, or Congress).

Tier-two ICTs are established and conducted

under the guidance of school commandants or

center commanders. These ICTs are used to

develop or refine a warfighting concept operation unique to a single proponent, or to determine and document branch or function unique

mission needs and requirements. The ICTs are

responsible for developing the MNS and the

ORD for the branch school. After the ICTs

develop the requirements documents (MNS and

ORD), they are approved by the commandant

of the proponent TRADOC school or center and

then forwarded to TRADOC Headquarters for

issue resolution and approval by the TRADOC

Commanding General.

They are then forwarded to Headquarters Army,

Deputy Chief of Staff for Operations and Plans

Figure 6. TRADOC Centers/Schools

Air Defense Artillery Center Air Defense Artillery School

Armor Center Armor School

Aviation Center Aviation School

Aviation Logistics School

Field Artillery Center Field Artillery School

Chemical and Military Police Centers Chemical School

Military Policy School

Infantry Center Infantry School

Ordnance School

Combined Arms Center Combined Arms Center

Transportation Center Transportation School

Signal Center Signal School

Engineer Center Engineer School

Intelligence Center Intelligence School

Quartermaster School
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-20

(DA DCSOPS) for review and evaluation. The

Army level review will focus on issues raised

by other services, the joint staff and OSD.

Changes are recommended to TRADOC for

incorporation. DCSOPS is also responsible for

resourcing the approved requirement by means

of the Planning, Programming, and Budgeting

system, after which the process is transferred to

the materiel developers and the acquisition

community to develop and field the capabilities.

Department of the Navy

The Navy has centralized the requirements

development process at the headquarters level.

The Deputy Chief of Naval Operations (DCNO)

for Resources, Warfare Requirements and

Assessments (N8) is responsible for the Requirement Validation Process. He also is the validation and approval authority for requirements that

do not require JROC approval. Nicknamed N8,

the Chief has several divisions that are the prime

organizations responsible for developing the

MNS and ORD for their areas of responsibility.

They are divided into the different missions of

the Navy—Expeditionary Warfare, Surface

Warfare, Air Warfare, Submarine Warfare, and

Special Programs Division (limited access

programs). (See Figure 7.)

Requirements can be generated from a variety

of sources, such as the fleet, the shore establishment, or by one of the OPNAV requirement

divisions. While the requirement may have come

from somewhere else, the N8 OPNAV divisions

will become sponsors of the requirement and

review/coordinate/develop a MNS. N8 will validate and approve for ACAT II, III and IV MNS.

The warfare divisions also have responsibility

for reviewing, coordinating and preparing the

Figure 7. Navy Requirements Organizations

Air Warfare

Division

(N88)

Expeditionary

Warfare Division

(N85)

Fiscal Management

Division

(N82)

Programming

Division

(N80)

Special Programs

Division

(N89)

Surface Warfare

Division

(N86)

CINC Liaison

Division

(N83)

Assessment

Division

(N81)

Submarine

Warfare Division

(N87)

Assistant DCNO

R. WR & A

Resources, Warfare Requirements

and Assessments

(N8)
Part 4 The United States

4-21

ORD. The CNO validates and approves delegated Major Defense Acquisition Program

ORDs. N8 approves all others.14 The warfare

divisions are the program advocates and have a

responsibility for providing fiscal sponsorship

of the program. The Requirements Officer (RO)

is the program sponsor and provides the key

interface between OPNAV and the acquisition

management structure. Marine Corps requirements are managed through this process and

funded by appropriate warfare sponsor.

Department of the Air Force

In the Air Force, the requirements process is

decentralized with the major operational commands, such as the Air Combat Command at

Langley AFB, VA, having responsibility for

developing requirements (see Figure 8). Each

command has a Director of Requirements (DR)

who, as part of their modernization reviews,

identifies deficiencies, evolving threats or technological opportunities, and generates requirements. The operational command’s DR will

write the MNS and the ORD, will prioritize

programs, and then will advocate within the Air

Force budgeting process for money to fulfill their

needs.

In the Headquarters, Air Force, the Deputy Chief

of Staff for Air and Space Operations (AF/XO),

and specifically the Directorate of Operational

Requirements (AF/XOR), reviews and coordinates MNS and ORDS. AF/XOR guides those

programs requiring approval and validation

through the JROC process. The Chief of Staff is

the approval authority for all MNS and ORDs

for ACAT II and III programs.

Within the Air Force, a forum similar to the

JROC, the Air Force Requirement Operational

Council (AFROC), reviews MNS, ORD and

other requirements documents for joint issues,

validity, interoperability with allies, and other

items. The process is designed to emphasize the

capability needed to meet Air Force needs,

versus a specific design solution. To develop

effective requirements documents, it is critical

to understand deficiencies across all Air Force

mission areas and to consider Joint Warfighting

Mission Areas.

Figure 8. Air Force Major Requirements Organizations

Air Combat Command Air Force Special Operations Command

Air Education and Training Air Intelligence Agency

Air Force Inspection Agency Air mobility Command

Air Force Materiel Command Air National Guard

Air Force Personnel Center Air University

Air Force Recruiting Service Center Army and Air Force Exchange Service

Air Force Rescue Coordination Pacific Air Forces

Air Force Reserve Command US Air Force Academy

Reserve Officer Training Corps United States Air Forces in Europe

Air Force Safety Center Air Force Space Command

Air Force Services Agency
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-22

Chapter 5

DEFENSE ACQUISITION

STRUCTURE

of Defense, Richard B. Cheney, chartered the

Defense Management Review which further

refined the acquisition structure to its current

arrangement.

Under Secretary of Defense

(Acquisition and Technology) (USD(A&T))

Out of the above efforts, the popularly coined

“acquisition czar” position was created. Officially titled, the Under Secretary of Defense

(Acquisition and Technology)16 or the Defense

Acquisition Executive (DAE), the “acquisition

czar” was given overall responsibility for the

policy and management of the acquisition system. Similar positions were created within the

Services. To create the “short lines of command,”

the Program Executive Officer (PEO) structure

was created with four levels of management. The

lines of command between the Service Acquisition Executive and the program manager was

limited to two (see Figure 9).

In cases of major defense acquisition programs

or programs involving Command Control and

Intelligence programs the PM reports through

the Head of the Component to USD (A&T) or

ASD (C3I) respectively. USD (A&T)’s authority was strengthened when Congress determined

that USD (A&T) would take precedence over

Service Secretaries in acquisition matters. It also

ranks number three within the DoD hierarchy.

This, along with the ability to have program

funds withheld, provides USD (A&T) with

significant leverage over the services.

At the beginning of the 1980s, the United States

found itself with what some have termed the

“hollow military.” To correct the situation, the

incoming Reagan administration had, as one of

its goals, strengthening national security by

increasing the defense budget. As defense budgets increased, so too did Congressional scrutiny. Several scandals, mostly centering on overpaying for spare parts, developing expensive

requirements for coffee pots and toilet seats on

aircraft, and buying $450 hammers, created an

impression in the American public’s mind of a

system out of control.

With increased public concern about the weapons development process and wasted taxpayer

dollars, President Reagan tapped former Deputy

Secretary of Defense and founder of HewlittPackard, David Packard, to chair a Blue Ribbon

Commission on Defense Management. The

panel issued their report in June 1986 recommending significant changes within the department in the management of acquisition programs. They called for the department to

“establish unambiguous authority for overall

acquisition policy, clear accountability for

acquisition execution, and plain lines of command for those with program management

responsibilities.” Included in those plain lines

of command were to be “short lines of command.” The President issued National Security

Directive 21915 to implement the panel’s recommendations. Congress followed suit with the

passage of the Goldwater-Nichols Act, which

created changes in the management of the

acquisition business. In 1989 the new Secretary
Part 4 The United States

4-23

The current USD (A&T) is the Honorable

Jacques Gansler. In addition to setting acquisition policy he has a large portfolio of responsibilities. These include responsibility for research

and development, advanced technology, test and

evaluation, production, logistics, military construction, procurement, international cooperative programs, economic security, and atomic

energy. In the international community, he is the

equivalent of the Armament Director and

represents the department at the Four-Power

Conference along with other major international

forums. Another important role is that of the

Senior Procurement Executive (SPE), responsible for management and direction of the

procurement system, including implementation

of unique procurement policies, regulation and

standards.

Office of the Under Secretary of Defense

(USD) (Acquisition & Technology)

The staff of the Under Secretary consists of

various functional offices which provide advice

and assistance on technology, procurement,

testing and other areas. Figure 10 depicts the

USD (A&T) organization. See Appendix C for

a listing of organizational functions. The Assistant Secretary of Defense for Command,

Control, Communications and Intelligence

(C3I) works with USD (A&T) on acquisition

matters for information systems. The office of

USD (A&T) is primarily a policy making

organization with oversight of the acquisition

organizations within the Services and agencies.

Other OSD organizations involved in acquisition: USD (A&T) is the primary acquisition

organization within OSD. Several other offices,

Figure 9. Acquisition Program Reporting

Program Manager

(Col/LtCol/Civilian Equivalent)

Service

Acquisition Executive/

Chief Information Officer

(Assistant Secretary or Equivalent)

Program Executive Officer

(General Officer/SES Civilian)

MDA Defense Acquisition

Executive

USD(AT&T)

SAE

PEO

PM

SAE CIO

MDA

DoD Chief

Information

Officer

ASD(C3I)

CIO

Note: Some PMs report direct to SAE

PEO

PM

ACAT ID

Programs

ACAT IAM

Programs

(see note) (see note)
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-24

however, play critical roles in oversight of acquisition, or provide guidance to USD (A&T),

or have a key role in determining the resources

available for acquisition programs.

Under Secretary of Defense (Comptroller) is

the principal advisor and assistant to the Secretary and Deputy Secretary of Defense for

budgetary and fiscal matters (including budget

formulation and execution, and contract audit

administration and organization) and administers the planning, programming, and budgeting

system. In addition, the USD(C) is the Chief

Financial Officer of the Department of Defense.

Director, Operational Test and Evaluation

(DOT&E) sets the policy and standards for

operational testing and analyzes operational test

results. DOT&E has oversight responsibility for

operational testing within the services.

DoD Inspector General (IG) serves as an

independent official for conducting audits and

investigations relating to programs and operations of the department. The IG is responsible

for identifying problems, deficiencies, fraud and

abuse in the management of programs and

identifying the need for corrective action.

Assistant Secretary of Defense (C3I) sets

policy for the management of command, control,

communication, intelligence and information

management systems and software for the

department. He is the Department’s Chief

Information Officer (CIO) and provides oversight

and policy to govern the development,

acquisition, and operation of information technology (IT) and information systems. ASD (C3I)

chairs the Defense Acquisition Board (DAB) for

Major Automated Information Systems.

General Council is the chief legal adviser on

acquisition issues and legislation. Coordinates

on significant legal issues, including litigation

involving the DoD. Acts as lead counsel for the

Department in all international negotiations

conducted by OSD organizations. Maintains

the central repository for all international

agreements negotiated by DoD personnel.

Defense Logistics Agency (DLA) is a central

combat support agency for the department. DLA

provides worldwide logistics support for the

missions of the military departments and the

Unified Combatant Commands and other Federal agencies, foreign governments, international

organizations, and others as authorized. Provides

materiel commodities and items of supply that

are common to the military services. Within

DLA is the Defense Contract Management

Command, the single organization responsible

for worldwide contract management.

Defense Contract Audit Agency (DCAA) performs contract audits and provides accounting

and financial advice to DoD procurement

organizations and others, such as NASA. These

services are provided in connection with

negotiation, administration, and settlement of

contracts and subcontracts.
Part 4 The United States

4-25

Figure 10.

Office of the Under Secretary of Defense (Acquisition & Technology (with OASD(C3I))

Under Secretary of Defense

(Acquisition and Technology)

Director,

Defense Research

and Engineering

Principal Deputy

USD(A&T)

Director,

Strategic and

Tactical Systems

DUSD

Science and

Technology

DUSD

Acquisition

Reform

Def Adv

Research

Projects Agency

DUSD

Environmental

Security

DUSD

Industrial Affairs

and Installations

Ballistic Missile

Defense

Organization

Director,

Defense

Procurement

DASD

C3ISR &

Space Systems

Director,

International

Programs

Defense

Logistics

Agency

DUSD

Logistics

DUSD

Advanced System

and Concepts

Director,

Acquisition

Resources and

Analysis

Assistant Secretary

of Defense

Command, Control,

Communications and

Intelligence (C3I)

Director,

Small and

Disadvantaged

Business

Utilization

DASD

Security and

Information Ops

DASD CIO

Policy and

Implementation

DASD

Intelligence

Director,

Special

Programs

Executive

Director

Science Board

Director,

Systems

Acquisition

(Acquisition Program

Integration)

Director,

Test, System

Engineering and

Evaluation

aaaaaaaa

Acquisition

matters
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-26

Chapter 6

SERVICE ACQUISITION

ORGANIZATIONS

Within this basic structure, each of the services has organized to meet its management and

mission needs. The Army and Air Force have

Major Commands, headed by four-star generals,

which have acquisition and logistics responsibilities—Army Materiel Command and Air

Force Materiel Command. These commands

manage the personnel, resources and processes

involved in acquisition and logistics support of

the operational forces. The Navy eliminated its

Materiel Command in the 1980s and has four

subordinate Naval Systems Commands, two

headed by three-star admirals, with responsibility for the acquisition of systems and providing

logistics support to the fleet.

At the service headquarters level, each Service

has established offices with responsibility for

oversight and direction of the acquisition system, and for providing acquisition and contracting policy, and budget preparation. The role of

information technology in weapon system

development and management of information

within the services is recognized by establishment of Chief Information Officers. In the Air

Force the CIO is located within the acquisition

organization; while in the Navy and Army it is

in a separate organization, but works with the

acquisition organization on common issues. The

CIOs have responsibility for information technology policies, procedures, standards, to

include software policy and practices, and for

the development, acquisition and fielding of

information technology and systems within their

service.

The Services—Army, Navy and Air Force—are

separate departments within DoD, required by

statute to train, organize, and equip their respective military organizations. Thus, a significant

responsibility of each Service is the acquisition

of military equipment to meet the needs of the

warfighter. Closely allied with the structural

division of responsibilities is the department’s

management philosophy. Since the creation of

DoD, the philosophy has been to centralize

policy-making at the OSD and Service headquarters level, with decentralized execution of

programs at field level organizations. As seen

above, OSD is primarily a policy-making organization, although it plays a key role in program

management through the PEO structure for

Major Defense Acquisition Programs and in its

oversight role through the Defense Acquisition

Board (DAB).

All three Services have organized based upon

OSD direction and congressional mandates.

Each Service has a single, full-time Service

Acquisition Executive (SAE), an “acquisition

czar,” at the Assistant Secretary level.17 The

SAE18 has responsibility for making acquisition

policy and managing the acquisition system

within their respective department. Each of the

Services has created a streamlined organization

required by the 1989 Defense Management

Review which includes the Program Manager

(PM), the Program Executive Officer (PEO), and

the Service Acquisition Executive (SAE)—

although each is managed slightly differently.
Part 4 The United States

4-27

THE ARMY ACQUISITION

ORGANIZATION

The Army’s19 Acquisition Executive is the

Assistant Secretary of the Army, Acquisition,

Logistics and Technology (ASA (ALT)). He is

responsible for policy and management of both

the acquisition and logistics systems. The headquarters’ organization consists of six major deputies that provide support and advice to the

Assistant Secretary. They include a Principal

Military Deputy who is also the Deputy for

Acquisition Career Management; Deputies for

Logistics; Research and Technology; Procurement; Plans, Programs and Policy; Systems

Management and Horizontal Technical Integration; and a Director for Assessment and Evaluation. The acquisition workforce education and

training responsibility is assigned to the Deputy

Director, Acquisition Career Management, who

reports directly to the principle military deputy.

With the recent emphasis on privatization, a

Director for Competitive Sourcing has been

added. The Army’s CIO is separate from the

ASA (ALT). CIO responsibility is vested in the

Director of Information Systems for Command,

Control, Communication and Computers who

reports directly to the Secretary of the Army.

The mission areas of Combat Service Support

and Ammunition are assigned to Army Materiel

Command for management, but the individuals

are dual hatted as the “Deputy for” as part of

the ASA (ALT) staff. Medical Systems are not

assigned to the Army Materiel Command. They

are separately managed by the Army Medical

Research and Materiel Command at Fort

Detrick, Maryland. The Deputy Assistant Secretary for Chemical Demilitarization oversees

the U.S. chemical weapons destruction program.

The Army currently has seven Program Executive Officers as a line organization reporting

directly to the SAE, covering program areas,

such as, missiles, support systems, aviation and

others. The Army’s PEO organizations range in

size from 50 to 100 personnel and are located at

the AMC subordinate commands, such as

AMCOM in Huntsville, Alabama. There is also

a PEO for Reserve Component Automated

Systems. Three Direct Reporting Program

Managers (DRPMs) manage the Joint Tactical

Radio System, Biological Defense, and Chemical Demilitarization, respectively. Figure 11

shows the ASA (ALT) organizational structure.

Appendix C provides a functional description

of each office.

Army Materiel Command

The Army Materiel Command (AMC), a major

command, located in Alexandria, Virginia,

employes about 65,000 military and civilian

employees and is the Army’s principal materiel

developer. AMC provides management of

numerous maintenance depots, inventory control

points, arsenals, ammunition plants, laboratories, test facilities, and procurement operations—

much of it in general support of the acquisition

mission of the department. In addition to its

logistics and maintenance responsibilities, AMC

headquarters has responsibility for providing the

resources for the education and training of the

acquisition workforce, ensuring manpower support for program offices and Program Executive Officers, and development and maintenance

of acquisition processes. Within the headquarters

of AMC there are three offices primarily involved

in acquisition: the Deputy Chief of Staff for

Research, Development, and Acquisition; the

Office for International Programs; and the Deputy

Chief of Staff for Security Assistance. AMC is also

the executive agent with responsibility to acquire

all ammunition for the three Services.

AMC has nine sub-organizations with specific

areas of responsibility for acquiring weapon

systems not assigned to the PEOs. In these

organizations the Program Offices develop the

acquisition strategies and approaches, select the

contractors to develop or produce the weapon

system and manage the contracts. They are:
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-28

Figure 11.

Office of the Under Secretary of the Army (Acquisition, Logistics and Technology)

Deputy for

Systems

Management

and Horizontal

Tech Integration

Deputy

for

Logistics

Director,

Program

Assessment

and

Evaluation

Deputy, ASA

Plans,

Programs

and

Policy

Deputy

ASA

Procurement

Deputy

ASA

Research

and

Technology

Command, STAMIS

Control,

and

Communication

Systems

Ground

Combat

Support

Systems

Tactical

Missiles

Director

Competitive

Sourcing

Intelligence,

Electronic

Warfare

and

Sensors

Air and

Missile

Defense

*Reserve Aviation

Component

Auto System

DRPM

Bio

Defense

DRPM

Chemical

Demil

DRPM

Joint Tactical

Radio System

Deputy for

Ammunition

and DCS,

Ammunition,

HQAMC

Deputy for

Combat

Service

Support and

DCS

RD&E,

HQAMC

Deputy for Medical Systems and CDR,

US Army Medical Research and Materiel

Command, Fort Detrick, MD

DISC4/CIO

Deputy Director

Acquisition Career

Management

Assistant Secretary

of the Army (ALT)

Military Deputy ASA(ALT) and

Director, Acquisition Career Management

Program Report

Coordination and Support aaaaaa

Program Executive Officers
Part 4 The United States

4-29

Aviation & Missile Command/AMCOM,

Huntsville, Alabama

Army Research Laboratory/ARL, Adelphi,

Maryland

Communications – Electronics Command /

CECOM, Ft. Monmouth, New Jersey

Industrial Operations Command/IOC, Rock

Island, Illinois

Soldier, Biological and Chemical Command/

SBCCOM, Aberdeen, Maryland

Simulation, Training & Instrumentation

Command/STRICOM, Orlando, Florida

Tank-automotive & Armaments Command/

TACOM, Warren, Michigan

Test and Evaluation Command/TECOM,

Alexandria, Virginia

U.S. Army Security Assistance Command/

USASAC, Alexandria, Virginia

THE NAVY ACQUISITION

ORGANIZATION

The Navy acquisition executive is the Assistant

Secretary of the Navy for Research, Development and Acquisition (ASN (RD&A)). ASN

(RDA) sets policy and manages the Navy’s

acquisition system. Six deputy assistant secretaries (covering the program areas of ships,

mine/underseas warfare, air, C4I/EW/Space,

Theater Air Defense and Expeditionary Forces)

support him. The Navy’s CIO is a separate organizations reporting directly to the Secretary

of the Navy. The Navy’s SAE is supported by

five functional directors—Acquisition and

Business Management, International Programs,

Acquisition Career Management and Acquisition Reform and Planning, Programming and

Resources. The Office of Naval Research is a

line unit that reports directly to the ASN (RDA).

Twelve PEOs, with responsibility for major

defense programs in areas, such as undersea warfare and mine warfare, report directly to the

SAE. The Navy PEO offices are located at the

Naval Systems Commands and contain about 15-

20 personnel per office. The PEO Joint Strike

Fighter (JSF), dual hatted as the Program Manager, manages a joint Navy/Air Force program.

This is an innovative Navy/Air Force management approach to increasing emphasis on joint

program management. The current Program

Manager/PEO is an Air Force general officer

and reports to the ASN (RDA). At the end of

the Air Force PM’s tour, the position will alternate to a Navy PM whose reporting official will

be the Air Force’s Acquisition Executive. Two

of the PEOs are actually Direct Reporting

Program Managers (DRPM s) for—Strategic

Systems Programs (SSP) and Advance Amphibious Assault Programs (AAAP). Figure 12 shows

the ASN(RDA) organizational structure. Appendix C provides a functional description of each

office.

Naval Systems Commands

The next level of major command in Navy

acquisition is the Systems Commands, two of

which are headed by three star admirals. Each

of these commanders has responsibility for programs not managed by the Service Acquisition

Executive. They also have the responsibility to

implement acquisition initiatives and provide the

manpower and logistics support for the Navy

PEOs and DRPMs. The PEOs and DRPM are

collocated with the respective Systems Command. The four major Navy Systems Commands

are:

Naval Air Systems Command (NAVAIR),

Patuxent Naval Air Station, Maryland

Space and Naval Warfare Systems

Command (SPAWAR), San Diego,

California

Naval Sea Systems Command (NAVSEA),

Washington, DC

Marine Corps Systems Command, Quantico,

Virginia
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-30

Figure 12.

Office of the Assistant Secretary of the Navy (Research, Development & Acquisition)

Deputies

DASN

C4I/EW/Space

Programs

(Navy CIO)

DASN

Theater

Air Defense

DASN

Air

Programs

DASN

Mine/

Undersea

Warfare

DASN

Ship

Programs

DASN

Expeditionary

Force

Programs

Director

Acquisiiton

Career

Management

Director

International

Programs

Deputy

Acquisition

and Business

Management

Chief of

Naval

Research

Undersea Submarines

Warfare

Cruise Missiles

and

Unmanned Aerial

Vehicles

Joint

Strike

Fighter*

Acquisition

Reform

Executive

Director,

Planning,

Programming

and Resources

Mine

Warfare

Space

Communications

and Sensors

Aircraft

Carriers

Tactical

Aircraft

Programs

Theater Air

Defense/

Surface

Combatants

Expeditionary

Warfare

Air ASW, Assault

and

Special Msn Programs

DD-21

Advanced Amphibious

Assault

Advanced Amphibious

Assault

Functional Directors Functional Directors

Deputies

Program Executive Officers

Direct Reporting Program Managers

*Af PEO reports to Navy

Assistant Secretaryof the Navy

(RDA)/NAE

Principal Deputy
Part 4 The United States

4-31

Within these commands are various subordinate

commands which support the acquisition system. For example, NAVAIR has the Naval Air

Warfare Center Aircraft Division (NAWC AD),

Naval Air Warfare Center Weapons Division

(NAWC WD), Naval Air Warfare Center Training Systems Division (NAWC TSD), and Naval

Inventory Control Point (NAVICP). There are

two other support systems commands: the Navy

Facilities Engineering Command, Washington.

D.C., responsible for construction and facilities

maintenance and the Navy Supply Systems

Command, Mechanicsburg, Pennsylvania,

which provides in-service logistics support.

AIR FORCE ACQUISITION

ORGANIZATION

The Air Force acquisition executive is the

Assistant Secretary of the Air Force (Acquisition)—(ASAF (A)). ASAF (A) has two principal deputies. The Principal Deputy(Acquisition

and Management) oversees the management of

Air Force acquisition programs, acquisition

reform, and acquisition training and education.

This individual currently holds the position of

chairman of the NATO Airborne Early Warning

and Control Program Management Board of

Directors. The Principal Deputy (Acquisition)

provides management direction of programs,

works the interface with the user and the Hill.

Additionally, he is designated as the Air Force’s

Chief Information Officer.

The support staff consists of mission area directors and functional directors. The four Mission

Area Directors for Information Dominance,

Global Power, Global Reach and Space and

Nuclear Deterrence provide policy, direction,

resource allocation (PPBS) (program budgets),

and oversight for programs within their mission

areas. The four functional organizations are

Contracting; Special Programs; Science, Technology and Engineering; and Management

Policy and Program Integration. There is also

the Air Force Acquisition Management Chair

located at the Defense Systems Management

College. Figure 13 shows the organizational

structure. Appendix C provides a functional

description of each office.

Air Force Program Executive Officers

(AFPEOs) are responsible for a number of

mission-related programs, which collectively

comprise the PEO’s portfolio. The current six

PEOs have portfolios grouped into areas, such

as fighters and bombers, weapons, airlift and

trainers, space, command and control, and

logistics information systems. The PEOs are a

field unit, not part of the headquarters staff, and

have small staffs, consisting of seven personnel

for each office. A typical PEO will have oversight of five or six programs, each managed by

a Program Manager, who is held responsible for

ensuring that cost, schedule and performance

aspects of acquisition programs are executed

within an approved program baseline.

For other than Major and Selected programs

(ACAT IIIs), the commanders of AFMC Product Divisions and Air Logistics Centers perform

a PEO role. In their PEO role they are referred

to as Designated Acquisition Commanders

(DACs). These DACs are also established in a

direct reporting line between their subordinate

program managers and the SAE. In their role as

center commanders, they report to the Air Force

Materiel Command commander. Figure 14

shows this relationship.

Air Force Materiel Command

The headquarters for AFMC, a major Air Force

command, is located at Wright-Patterson AFB,

Ohio, and employs over 100,000 personnel. Its

mission is to manage the Air Force research,

development, test, and acquisition of programs

and to provide logistics support for Air Force

weapons systems. Specifically, they perform
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-32

scientific research and depot maintenance,

provide technical support for existing weapon

systems, such as the F-16, certifying and

managing system safety, integrity and suitability for combat use. They also provides the

manpower and process support to the PEO

structure.

AFMC has management responsibility for Air

Force weapons systems “womb to tomb.”

Weapon systems with significant development

or production efforts remaining are managed

by one of four Product Centers. These centers are primarily responsible for development,

acquisition, testing, and fielding of new or

modified weapon systems. The four centers are:

Aeronautical Systems Center, WrightPatterson AFB, Ohio

Space and Missile Systems Center, Los Angeles Air Force Base, California

Electronic Systems Center, Hanscom Air

Force Base, Massachusetts

Air Armament Center, Eglin Air Force Base,

Florida

Existing weapon systems and military equipment are managed by one of five air logistics

Figure 13.

Office of the Assistant Secretary of the Air Force (Acquisition) (as of April 1999)

DAS,

Management

Policy and

Program

Integration

DAS,

Contracting

DAS, Science

Technology and

Engineering

Director,

Special

Programs

• Scientific Advisory Board

• RFP Support Office

• AF Chair – DSMC

Functional Directors

Mission Area Directors

Assistant Secretary

(Acquisiiton)

(AF SAE and SPE)

Principal Deputy Principal Deputy

(Acquisition &

Management)

Director,

Space and

Nuclear

Deterrence

Director,

Information

Dominance

Director,

Global

Power

Director,

Global

Reach

Program Executive Officers

Fighters

and

Bombers

Airlift

and

Trainers

Weapons JSF* Command Space

and

Control

Logistics

Information

Systems

*AF PEO reports to Navy Acquisition Executive
Part 4 The United States

4-33

Figure 14. Acquisition Management Structure

Management Support

Technical/Logistics/

Contract Support

Program

Manager

Staff

PEOs

Staff

SAE

USD(A&T)

Program

Managers

Acquisition

Staff

AF

AFMC

Acquisition, Policy

Support and Processes

DAC Product Centers

Log Centers
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-34

centers. These centers have responsibility for

logistics support and maintenance of weapon

systems and equipment.

Ogden Air Logistic Center, Utah

Oklahoma City Air Logistics Center,

Oklahoma

Sacrament Air Logistics Center, California

(scheduled to close 2001)

San Antonio Air Logistics Center, Texas,

(scheduled to close 2001)

Warner–Robbins Air Logistics Center,

Georgia

In support of weapons development, AFMC has

two test Centers—Arnold Engineering Development Center, Tennessee, and Air Force flight

Test Center at Edwards AFB, California. AFMC

is also home of the Air Force Research Laboratory (AFRL). The AFRL is the science and

technology organization for the Air Force. They

perform internal research and leverage the

capability of other national scientific organizations, industry, and academia. The Air Force

Security Assistance Center is also part of AFMC,

and manages foreign military sales programs

totaling in excess of $20 billion in support of

more than 80 foreign countries.
Part 4 The United States

4-35

Chapter 7

THE DEFENSE

ACQUISITION SYSTEM

also operate separately, continuously and concurrently. Decisions and issues overlap from one

system to the other; and each impacts on the

ability of the acquisition system to deliver timely,

cost effective systems.

PLANNING, PROGRAMMING, AND

BUDGETING SYSTEM

In 1962 Defense Secretary Robert S. McNamara

and Charles J. Fitch, OSD Comptroller, wanted

to “run government more like a business.” They

developed the Planning, Programming and Budgeting System (PPBS) to link strategic planning

There are three decision support systems used

to manage the department. They are: (1) the

Requirements Generation Process (discussed

earlier); (2) the Planning Programming and Budgeting System (PPBS), and (3) the Acquisition

Management System. All three systems are

designed to assist senior decision-makers such

as the SECDEF, USD (A&T) and other senior

officials in making critical decisions. The output from these systems provide the money,

authority, people and other resources necessary

to execute programs and deliver a product to

the warfighters. Figure 15 provides a conceptual look at the systems and the overlap between

the systems. While these systems interact, they

Figure 15. Three Decision Making Support

Planning, Programming,

and

Budget System (PPBS)

Requirements

Generation

DRB Review

and

Approval

VCJCS/Service

Chief

Oversight

Milestone Decision

Authority (MDA)

Oversight

Acquisition

Management

DAB Review and

Approval

ACAT I
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-36

activities to the budget. This system, unique to

the Department of Defense, provides the mechanism for development of the Department’s

portion of the President’s Budget.

Prior to implementation of the PPBS system,

the military departments “planned, programmed,

and budgeted” a year at a time. PPBS provides

a disciplined process to tie long-term planning,

such as the Defense Planning Guidance, to the

resources needed to implement the planning and

the budgetary dollars necessary for implementation. Senior leaders then have the information

to make informed affordability assessments, to

prioritize requirements and to make resource

allocation decisions on defense acquisition programs. PPBS is a cyclic process, looking out

five years, with annual reviews of the resources

necessary for the department to operate. In each

phase, OSD issues guidance; the Services,

defense agencies and the JCS request resources;

and the Defense Secretary issues a decision. The

Deputy Secretary of Defense, with advice from

the Defense Resources Board (DRB), manages

the PPBS system.

The planning portion of the PPBS is the responsibility of the USD Policy. Generally, this phase

begins about two years in advance of the fiscal

year in which the budget will be requested. The

Services and Joint Staff, with OSD, conduct this

six-month process beginning in the fall and ending in March. The overall framework for planning is provided by the President in his National

Security Strategy and the National Military

Strategy. This phase begins when the JCS issues the Joint Planning Document (JPD) which

proposes long-term strategy and force levels

necessary to achieve national military objectives.

Based on the JPD, OSD issues the Defense Planning Guidance (DPG) document, which provides

the strategic mid-range-planning framework for

developing the Service Program Objective

Memorandum.

The programming phase is next and is the

responsibility of OSD’s Program Analysis and

Evaluation office. The Services respond with

their Program Objective Memoranda (POM)

stating requirements for resources, such as personnel and supplies, and justifying acquisition

programs. The JCS then submits to OSD the

Chairman Program Assessment (CPA) assessing the capabilities and risks associated with the

proposed forces and programs. A period of formal discussions (program review cycle) follows

between the Services, OSD, and the JCS. Once

an acceptable level of resources and programs

is agreed to, the Secretary of Defense issues the

Program Decision Memorandum (PDM). See

Figure 16 for the time frames for conducting

the PPBS cycle.

The final phase is the budgeting phase and the

responsibility of the OSD Comptroller. The

PDM has set the resource and acquisition program levels. These are translated into the Service

annual budgets, which are in turn reviewed by

OSD. Based upon OSD comments, the services

submit a Budget Estimate Submission (BES) in

September. After resolution of issues caused by

the BES submittal, OSD issues program budget

decisions and the DoD budget is finalized. What

survives is voluminously documented and submitted to OMB for inclusion in the President’s

Budget, which is submitted to Capitol Hill in

February.

The Acquisition Management System

The Acquisition Management System consists

of the policies and procedures governing the

operations of the entire DoD acquisition system. There are two documents that guide the

defense acquisition business. The first regulation is the DoD Directive 5000.1, Defense

Acquisition, which identifies the key officials

and panels for managing the system and provides broad policy and principles for all acquisition programs. Its sister pamphlet is DoDR
Part 4 The United States

4-37

5000.2, Mandatory Procedure for Major Defense

Acquisition Programs (MDAPS) and Major

Automated Information System Acquisition Programs (MAIS). This document provides specific

mandatory policies and procedures to guide the

development and production of major programs.

There are three general principles governing the

operation of the defense acquisition system:

1. Translate operational needs into stable,

affordable programs,

2. Acquire quality products, and

3. Organizing for efficiency and effectiveness.

The acquisition system is designed around a

series of life-cycle phases. It begins with the

conceptualization of a system and extends to

actually developing and fielding a system, and

eventually phasing it out of the inventory. It is

more colorfully described as “womb to tomb.”

The four phases of the DoD acquisition system

are: (1) Concept Exploration (CE), (2) Program

Definition and Risk Reduction (PDRD), (3)

Engineering and Manufacturing Development

(EMD), and (4) Production, Fielding/Deployment, and Operational Support. As a system

moves through its life cycle, it must pass decision

points. These points are called Milestone Decision Points (Milestone 0 to IV). The phases and

milestone decision points are shown in Figure

17.20 At each of these milestones, the decisionmaker, the Milestone Decision Authority

(MDA), will make a determination whether or

not the system is programmatically and technologically ready for the next phase. As an

example, an Army personnel carrier entered the

Program Definition and Risk Reduction phase

with two goals—demonstrating certain technology and developing a successful prototype. The

MDA will evaluate how successful the program

performed its goals and what its projected cost,

schedule and technical risks are for the next

phase. If the Phase I goals have been met and

the performance parameters are acceptable, the

Figure 16. Planning Programming Budget Cycle

OSD Review

Program Decision

Memorandum

Year 1

August–September

Program Objective

Memoranda

Services to OSD

Defense Planning

Guidance by JCS,

OSD and Services

Long Range

Investme Plans

by JCS with Services

Year 2

March

Year 2

April

Year 2

April–September

Budget

Estimate

Submission

Year 3

February

OSD Review

Program Budget

Decision (PBD)

Two Year

Defense Budget

OMB Review

President’s

Budget Submitted

to Congress

Year 3

January

Year 2

September–December

Year 2

September

Planning Phase Programming Phase

Budget Phase
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-38

MDA will approve the program’s entry to the

next phase—Engineering and Manufacturing

Development. Of course, if the program has not

met its goals and the risks are perceived to be

too great, the program could be cancelled or

additional technical efforts may be undertaken.

For Major programs, the Defense Acquisition

Board (DAB)(to be discussed later) is the MDA.

This is an event-driven process and some programs will go through a phase in one or two

years where another may take four or five years.

The next section provides a description of each

of the milestones and phases.

PHASES AND MILESTONE

Milestone 0/Phase 0: Concept Exploration21

The Requirements Generation Process has

identified a shortfall in military capability and

turned to the acquisition community. The basic

questions the acquisition community is asked

“How can I solve this problem? What type of

material solution is possible?” The answer could

be a new aircraft, a remotely-piloted vehicle,

modification of an existing aircraft, or other

possible solutions. During this phase most of

the effort is paper products—studies of various

concepts to meet the warfighters needs. These

studies will address the following types of

questions:

• What are the technical problems that must

be overcome?

• What technology is available to meet military

needs?

• What are the technical risks?

• What will the program cost and how long to

field?

Figure 17. Milestones and Phases

Milestone

III

Production

or

Fielding/

Deployment

Approval

Milestone

II

Approval

to

Enter

E & MD

Milestone

I

Approval

to

Begin New

Acquisition

Program

Milestone

0

Approval

to

Conduct

Concept

Studies

Pre-Phase 0

Activity

Phase 0

Concept

Exploration

Phase I

Program

Definition

and

Risk

Reduction

Phase II

Engineering

and

Manufacturing

Development

Phase III

Production,

Fielding/

Deployment

and

Operational

Support
Part 4 The United States

4-39

This “concept” will translate a range of ideas

into a more detailed, but still abstract, description of a possible solution. Generally, this

phase is short lived, possibly several years, and

relatively inexpensive.

Milestone I: Approval to Begin a New

Acquisition Program/Phase I – Program

Definition and Risk Reduction

This is the phase where a program becomes a

program. If it is an ACAT I program, the DAB

will provide criteria for entering the next

phase of acquisition. During this phase the program office will look at alternative acquisition

strategies and solutions. New technologies will

be evaluated for possible incorporation into the

system. The cost, schedule, and technical risks

will be assessed? Prototypes may be built and

tested to further identify and reduce risks.

Technical factors that drive cost will be evaluated. Estimates of the life-cycle cost of the

system will be developed. Other factors, such

as interoperability with other services and allies,

should be pursued and evaluated. As the title to

this phase indicates, the program office is trying

to “flesh out” the item and focus on risk reduction of the system prior to the next decision point.

This phase can be as short as two to three years

or well over five years.

Milestone II: Approval to Enter

Engineering and Manufacturing

Development/Phase II – Engineering

and Manufacturing Development

The purpose of the Milestone II decision point

is to determine if the results of Phase I warrant

continuation of the program, and to approve

entry into Engineering and Manufacturing

Development. The program is now moving from

the experimental phase into the engineering

design phase and it is a significant commitment

of government funds. A particular approach—

ship, radar, airplane—has been selected and the

actual design of the system takes place. The

contractor designs the system, builds actual

products, and then tests the item to ensure it

performs to specification. Also during this phase,

operational testing will be accomplished to

ensure that it performs as it should in a combat

environment. A limited commitment to production, called Low Rate Initial Production

(LRIP),22 will occur. Depending upon the system and the program risks, the MDA could

approve the LRIP initially or when EMD is completed. This phase often takes three to five years

or longer.

Milestone III: Approval for Production,

Fielding/Deployment, and Operational

Support/Phase III – Production, Fielding/

Deployment, and Operational Support

It works! It has been tested and is ready for

production. With the Milestone III production

approval by the MDA, this phase brings the

equipment to the warfighter. As the equipment

is delivered, the military services will introduce

the equipment into the inventory and into actual

use. Along with the equipment will come the

technical orders on how to operate and repair

the equipment, the spare parts, the training and

training equipment, and test equipment

necessary to operate the equipment.

In summary, the development of a weapon

system is a methodical, event driven process,

which can well take over 10–15 years. However, the warfighting environment is dynamic.

New technology makes old technology obsolete.

Testing may have identified deficiencies that

need to be corrected. The enemy’s equipment

and tactics may change. For these types of

reasons, additional changes to the system, some

major, may occur many years after the system

is fielded. The first B-52 pilot’s grandson, and

perhaps great grandson, may still be flying that

aircraft. Systems such as the B-52, which have

been in the inventory for 50 years, require
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-40

constant change to keep up-to-date with emerging threats and new technology. Some modifications, such as new avionics, or engines, could

be of sufficient cost and complexity that they

could qualify as a new major system program.

If this happens, they will be managed as a “new”

major program.

DESIGNATION OF PROGRAMS

The Department assigns a designation to a program to ensure the proper level of management

review. These designations also indicate the

statutory and regulatory policy that the program

must comply with. The most senior level of

review, OSD (DAB) review, is selected for the

most costly programs - a Major Defense Acquisition Program (MDAP), also referred to as an

Acquisition Category I (ACAT I) program. The

next level is a Major Program, or Acquisition

Category II (ACAT II). For less than major

programs, or ACAT III programs, the level of

review is delegated to the Program Executive

Officer or Systems Command level. In most

cases the cost of a program is used to determine

the review level. An MDAP is based upon the

cost for research, development, test and evaluation (RDT&E) of a weapons system of more

than $355 million dollars23 or for production cost

of an item for more than $2.135 billion. The

Service Acquisition Executive will review a

major system (ACAT II) at the Service, versus

OSD level. An ACAT II designation is based

upon RDT&E cost of more than $135 million,

or procurement cost of more than $640 million.

All other systems are considered less-than-major

systems (ACAT III). While normally the level

of review is designated by a system’s cost, at

other times, the USD (A&T) or the SAE will

determine that because of high technical risks or

political issues, a more senior review is warranted.

For over twenty years the department has provided oversight of motor automated information

systems under a separate forum. The Major

Automated Information System Acquisition

Review Council (MAISARC) process has

recently been integrated into the DAB process.

A program receives a Major Automated Information System (MAIS) Acquisition Program

designation at a lower dollar value. A program

with costs in any single year in excess of $30

million dollars, or total program costs in excess

of $120 million, or total life-cycle costs in excess

of $360 million24 will be designated an ACAT

IAM program.

Categories of Acquisition Programs

and Milestone Decision Authorities

(MDA)25

Category Management Responsibility/MDA

ACAT ID USD (A&T).

ACAT IC Generally the Service Acquisition

Executive.

ACAT IAM Assistant Secretary of Defense

(C3I).26

ACAT IAC SAE.

ACAT II SAE.

ACAT III27 Delegated to PEO/PM/acquisition

command.

DEFENSE FORUMS

There are several key boards the DoD uses to

manage decision making in the three decision

systems. These boards allow the Deputy Secretary or the Under Secretary for (A&T) to have

the benefit of the key players in the system to

provide input and advise him in making his

decision. The Defense Resources Board (DRB)

is the senior DoD resource allocation board

chaired by the Deputy Secretary of Defense. The

DRB advises the Deputy Secretary on major

resource allocation decisions and authorizes

funds. Its membership includes Chairman and
Part 4 The United States

4-41

Vice Chairman JCS, Under Secretaries of Defense,

Chiefs and Secretaries of the military Departments.

The DRB coordinates the two decision systems—

the PPBS and Acquisition Management Systems.

The Defense Acquisition Board (DAB)

28

This body has been called the “corporate-level

vice-presidents of DoD weapons acquisition.”

It is the senior DoD acquisition review board

chaired by the USD (A&T)29 for ACAT I programs. At each milestone the DAB authorizes

program initiation or continuation. Each DAB

review assesses the programs accomplishment

of its required objectives during the current

phase and is it ready for the next acquisition

phase. When the DAB approves continuation, it

provides exit criteria which must be met to

continue into the next phase.

DAB Members

The principal members are:

• The Vice Chairman of the Joint Chiefs of Staff

(vice chairman of Board);

• Principal Deputy USD (A&T);

• Under Secretary of Defense (Comptroller);

• Assistant Secretary of Defense (Strategy and

Requirements);

• Director of Operational Test and Evaluation

(DOT&E);

• Director of Program Analysis and Evaluation

(PA&E);

• Acquisition Executives of the Army, Navy,

and the Air Force;

• Cognizant Overarching Integrated Product

Team (OIPT) Leader, PEOs and Program

Managers.

Senior advisors, such as, the Director of Defense

Research and Engineering also routinely support

the DAB Chairman.

As part of the Department’s acquisition reform

efforts, the DAB process has been changed to

use Integrated Product Teams (IPT), in particular the Overarching IPT to improve the quality

of information and to speed up the process. A

concern of the senior OSD leaders has been the

length of time and bureaucracy that has crept

into the process over the years. The use of the

IPT structure, along with other acquisition

reform changes, is meant to overcome these

problems. It should be noted that in many cases

the OIPT could resolve all major issues, and not

require the DAB to meet in executive session,

but rather perform a “paper” DAB. If the DAB

agrees, then the approval document—an Acquisition Decision Memorandum (ADM)—will be

issued.30

INTEGRATED PRODUCT TEAMS (IPT)

Over the last ten to fifteen years, the concept of

IPTs, as a management approach, has gained

favoritism both in government and industry. The

IPT is based upon the concept that having the

right people working together as a team will

result in a better product for the customer. The

typical IPT will have a team of experts from a

variety of acquisition functions, such as, engineering, contracting, logistics, and the user. At

the program office level they work the day-today program problems. Many IPTs include contractor (industry) representatives. As an example,

an airplane program office might have the

following IPTs:

• IPT for engines,

• IPT for simulators, and

• IPT for aircraft.
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The IPT began in the program office, but, as the

acquisition community found they worked well,

the concept was expanded as part of the

Department’s Acquisition Reform Program.

There are now three other types currently in use:

(1) the Working IPT; (2) the Integrating IPT;

and (3) the Overarching IPT. (See Figure 18.)

Working IPTs (WIPT)

The WIPT is the service Headquarters and OSD

action functional officers’ opportunity for insight

into the program mostly from a functional viewpoint, such as, contracting or testing. This group

will formulate/coordinate documents needed in

Figure 18. Defense Acquisition Integrated Project Team (IPT) Structure

CONTRACTING

IPT

(Service HQ Staff,

OSD Staff)

Integrating IPTs

Test IPT

(Development and

Operational

Organization

Service HQs and

OSD Testers)

OTHER

IPTs

(as needed)

Contracting IPT

Contracting Officer/

Defense Contract

Management

Command

IPT

Various IPTs

Government

and Contractor

Personnel

(as needed)

Program Office/

Contractor/

Product IPTs

Engine IPT,

Airframe IPT

Program Management IPTs

Milestone Decision Authority

(Defense Acquisition Board)

Overarching

IPTs

Strategic, Tactical, Space, C3I/AIS

Oversight

and

Review

Execution

Working

IPTs
Part 4 The United States

4-43

that functional area, such as the Single Acquisition

Management Plan (SAMP).

Integrating IPTs (IIPT)

The Program Manager will generally lead the

Integrating IPT. Membership on the Integrating

IPT is generally a senior member of the functional areas represented in the Working IPT. The

Integrating IPT coordinates the Working IPT

efforts. In doing this they will support the

development of strategies for acquisition and

contracts, cost estimates, evaluation of alternatives, logistics management, cost-performance

trade-offs, and other efforts.

Overarching IPTs

The Overarching IPT is the highest organizational level IPT and is used in managing ACAT

level I programs. An OSD official assigns each

program to an OIPT lead. There are four OIPTs

and the officials leading them are:

OIPT OSD Official

Strategic Director of Strategic and Tactical

& Tactical Systems

Space Assistant Deputy Under Secretary

of Defense (Space and Acquisition

Management)

C3I/AIS Deputy Assistant Secretary of

Defense (C3I)

Typical OIPT membership is the PM, PEO,

Component staff, Joint Staff, USD (A&T) staff

and the OSD staff principals or their representatives, involved in oversight and review of a

particular the program. OIPTs meet as necessary over the life of a program. The goal is to

resolve as many issues and concerns at the lowest level possible, and to expeditiously escalate

issues that need resolution at a higher level,

bringing only the highest level issues to the MDA

for decision.

The indicated above the OIPT plays a significant role in improving the DAB process. The

OIPT will meet two weeks prior to a scheduled

DAB review. The acquisition strategy, the program status, outstanding issues, and criteria for

next phase will be discussed. If the issues and

problems can be worked at the OIPT level, the

OIPT leader, with the SAE, will recommend to

the Chairman of the DAB chairman not having

a formal DAB, but rather a “paper” DAB.

THE PROCUREMENT/CONTRACTING

SYSTEM31

The Department of Defense is the largest buyer

in the world. It spent over 128 billion dollars in

Fiscal Year 1998. The items bought range from

developing major weapon systems, such as the

F-22, to buying repair services for copiers. It is

a large, complex system with hundreds of buying offices located throughout the world. The

basic policy of the U. S. Government is that

products and services will be bought, if possible,

competitively. The original regulation governing procurement for the DoD was the Armed

Services Procurement Regulation, first issued

in 1948. This document has evolved over the

last 50 years, going through two name changes

—Defense Acquisition Regulation (DAR) in the

1970s to the Federal Acquisition Regulation

(FAR) in 1984. While competition has always

been the hallmark of the system, it was not until

the passage of the Competition in Contracting

Act (CICA) of 1984, which mandated full and

open competition, that over 50 percent of the

dollars spent were actually competed. CICA

instituted a very structured process for sole

source authorization. It requires approval by the

local competition advocate for lower dollar

acquisitions. The Senior Procurement Executive

must approve acquisitions over $50 million
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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dollars. In Fiscal Year 1998, 58 percent of the

department’s dollars were competed, which

equates to over $74 billion dollars available for

competition.

The Director, Defense Procurement, on the staff

of USD (A&T), sets policy for procurement

within the department. In turn, each of the Services has a functional organization at the service headquarters level responsible for policy.32

The actual awarding of contracts in the Department of Defense is decentralized. There are

hundreds of contracting organizations located

at military posts and bases throughout the world.

In general, they buy goods and services that are

most efficiently procured at local level—maintenance and repair of facilities, office supplies

and food products. Weapon Systems Contracting is done at centralized agencies, such as the

Army’s Communications Electronics Command

in New Jersey, the Navy’s Space and Naval

Warfare Systems in California, and the Air

Force’s Aeronautical Systems Center in Ohio.

There are two general types of contracts used in

DoD contracting—Fixed Price and Cost Reimbursement. Fixed price type contracts, as the

name implies, set the price to be paid to the

contractor on the day the contract is awarded.

This type of contract is used where the item is

well-defined, for example, a jeep or an existing

missile. For newly-developed equipment, where

there are many technical and manufacturing

risks, a cost-type contract is used to share the

risk between the government and the contractor. In a cost-type contract, the government

reimburses all allowable and reasonable costs,

plus a small fee. To use a fixed-price contract

for Research and Development (R&D) over $10

million requires approval by the USD (A&T).

In general, during the early phases of research

and development through EMD, a program

office will use a cost-type contract. Once the

system moves to production and the design is

finalized, then a fixed price contract will be used.

For a more thorough discussion of contract

types, see FAR Part 16.

How are contractors competitively selected for

a major acquisition contract? To ensure transparency in the procurement system and a “fair”

chance for each offeror, a highly structured

process of “Source Selection” has developed. A

typical source selection starts with the “Contracting Officer”33 issuing a Commerce Business

Daily (CBD) announcement for a preproposal

conference. All interested bidders are invited.

Attendees will be briefed on the military requirement and an approximate schedule of events.

The next event is issuance of a “draft” Request

for Proposal (RFP) looking for industry comments for changes and problems. Finally, all

interested bidders will be provided an RFP.

Interested contractors will submit a proposal. A

source selection evaluation team will evaluate

the proposals. Their assessment will be briefed

to the Source Selection Authority (SSA), a senior

government official, who will make the actual

selection. For large dollar and highly controversial weapon system acquisitions, the Source

Selection Authority could be the Secretary of

the Department or the SAE. Most often it is a

Program Executive Officer or other senior

official.

What happens if you think the process was

unfair? The U. S. Congress has established a

protest mechanism. For dissatisfied offerors,

protests of award of contracts can be sent to the

agency that awarded the contract or the General

Accounting Office. An alternative, but more

costly method, is to go to the U. S. Federal District Court or the U.S. Court of Federal Claims.

Once a contract is awarded, the DoD has a

dispute forum for issues involving contract

performance. Unhappy contractors can go to the

Armed Services Board of Contract Appeals,

which is an administrative forum, designed to

be a relatively inexpensive way to administratively settle disputes. Again the Federal District
Part 4 The United States

4-45

Court or the U.S. Court of Federal Claims offer

an alternative venue. An initiative of the DoD’s

acquisition reform movement is the use of a third

method—Alternate Disputes Resolution (ADR).

ADR is designed to be a cost-effective method

of using impartial arbitrators to resolve the

dispute.

Once the contract is awarded the program office

will assign contract administration activities,

such as payment and quality assurance, to the

Defense Contract Management Command which

has offices located in varous regions throughout the U.S. Management of the contract, as it

relates to key program requirements, will be

maintained in the program office.

The Defense Contract Audit Agency (DCAA)

plays a significant role in supporting program

offices with contract audits and accounting and

financial advice during the negotiation, administration, and settlement of contracts and

subcontracts.

The U. S. defense acquisition system is highly

regulated with laws and policies covering every

area of procurement, such as contractor’s financial systems, records keeping, socio-economic

requirements, subcontracting, and ethics. But,

it is also a transparent system designed to

ensure fair treatment of vendors with equitable

opportunities to bid on new defense work.

“Color of Money”

“I have the wrong color of money” is a refrain

often heard in program offices. Since all American dollars are green, it is often a confusing

statement to someone new to the acquisition

business. The “color of money” refers to the type

of funds authorized and appropriated by Congress to be spent by the DoD. There are three

basic types of funds most often used in acquisition—Research, Development, Test and Evaluation (RDT&E) funds, Procurement funds, and

Operation and Maintenance funds. Congress

appropriates each of these types of funds for a

specific purpose. RDT&E funds may be used

only for research and development, and by

policy are spent (obligated) normally in the year

appropriated. This is where the problem comes

in. For example, a program office will have budgeted in Fiscal Years 1&2 for RDT&E funds

and Fiscal Year 3 for procurement (production)

funds. If the development effort slips, a not

uncommon occurrence, then the program office

may need more RDT&E funds and less production funds in year 3. Thus, the refrain “I have

the wrong color of money.” The financial

management portion of the DoD business is

complicated with many rules, and there are many

variations of the “color of money” problem. It

is usually solved by a reprogramming action to

move money from one program to another. However, if the total amount of RDT&E funds needed

for the program exceeds $4 million dollars ($10

million for procurement), then Congressional

approval is required. So, if you hear the term

“color of money,” be aware that the program

office has a money problem, not always easily

solved.
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Chapter 8

DEFENSE ACQUISITION AND

TECHNOLOGY WORKFORCE

more than 35,000 personnel receive training

from DAU.

Typical Career Path

A typical career path in acquisition can been

seen by looking at the program management

career field. When an individual is hired into

the workforce they will enter at level I. Level I,

the first of three levels of progression, generally requires that an individual possess an

appropriate degree, and once hired, receive a

combination of on-the-job and formal training.

For program management the formal training is

ACQ35 101, the Fundamentals of Systems

Acquisition (see Figure 19 for career training).

After several years on the job an individual will

continue to receive on-the-job-training plus

attend the ACQ 201, Intermediate Systems

Acquisition Course and achieve their level II

certification. With continued successful performance on the job, and by taking the PMT 302,

Advanced Program Management Course at the

Defense Systems Management College

(DSMC), an individual can achieve level III

certification and be eligible for a critical acquisition job. A critical acquisition job is a senior

position—GM/S 1436 for civilians and lieutenant colonel for military. The final step in the

program management career field would be

competitive selection to manage a major system program and attendance at the PMT 303,

Executive Program Management Course. These

three levels meet the training and experience

requirements to become a major systems program manager. Similar types of education and

About 149,00034 personnel, military and civilian, work in the Defense Acquisition and Technology workforce. In the 1980s a series of

scandals raised questions regarding acquisition

policies, organization and the effectiveness of

the workforce. The Packard Commission report

which had great impact on restructuring the

requirements process and the acquisition management of the defense programs also played a

key role in raising the issue of training and

education of the workforce. Efforts were begun

in the services to improve the training of the

workforce and to ensure personnel met minimum standards. Finally, in 1990 Congress

passed the Defense Acquisition Workforce

Improvement Act (DAWIA). The purpose of

DAWIA was to provide for a workforce to be

fully proficient and knowledgeable in the business of acquisition. Education, training, and

experience requirements were established for

each acquisition position based on the level of

complexity of duties required for that position.

To carry out this mission, DAWIA mandated

establishment of a Defense Acquisition University (DAU) structure. Currently the structure acts

as a consortium of schools, which includes the

Defense Systems Management College, Ft.

Belvoir, Virginia; Air Force Institute of Technology, Wright-Patterson AFB, Ohio; the Naval

Postgraduate School, Monterey, California and

the Army Logistics Management College, Ft.

Lee, Virginia, as the prime consortium members. Through its consortium of schools, DAU

offers 81 courses with over 1200 offerings covering all acquisition career fields. Every year
Part 4 The United States

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training requirements exist for all acquisition

career fields.

The acquisition Corps consists of both military

and civilian members. As can be seen from the

discussion of other areas, the Services, based

upon their traditions and needs have structured

the size of their acquisition workforces slightly

differently. The following are the current estimates of the size of the acquisition workforce

and the breakout between military and civilian

(Figures 20 and 21).

The Navy has the largest number of acquisition

personnel with over 49,000 personnel. However,

they have the fewest military as part of the

acquisition workforce. The Air Force has traditionally had the most military working in

acquisition. One of the contributing factors for

the military difference is the Navy’s and Army’s

tradition of military personnel spending the first

several tours in an operational environment. It

is not until later in their careers that Army and

Navy personnel move from an operational job,

such as an artillery officer or pilot, into the

acquisition workforce. This approach is similar

to the Air Force’s tradition of moving its rated

personnel, pilots and navigators, into the acquisition workforce, at about the 8-10 year point in

their career. The Air Force also has a significant

number of career acquisition military personnel who begin their career in acquisition. Military officers fill most program management

positions, although one of the features of

DAWIA was to increase the number of program

management positions available for civilians.

As a result of the Department’s Acquisition

Reform efforts, the impact of downsizing the

workforce and budgetary cuts, the DoD and the

Services have instituted several changes from

the original concepts of education and training.

Fundamentals of Systems

Acquisition Management

(ACQ 101)

Intermediate Systems

Acquisition Course

(ACQ 201)

Advanced Program

Management Course

(ACQ 301)

Executive Program

Management Course

(ACQ 303)

Career Levels

I

II

III

Years of Service

Career Training

Figure 19. The Program Management Education Continuum
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Initially training and education requirements

were strictly functional—training only in one

career field, e.g., contracting. An effort within

the services has been made to have personnel

qualified in several career fields (multi-career

field qualified). This provides not only a broadening of the workforce’s capabilities, but also

allows management the opportunity to move

personnel to a broader range of positions. The

second effort focuses on continuing education.

The department recognizes that the education

and training as described above is the minimum

necessary to do the job. “If you look throughout

the commercial world at particularly successful

companies, the focus on continuous education

is something you see consistently across the

board,” said Stan Soloway, Deputy Under Secretary of Defense for Acquisition Reform. To

ensure personnel continue to maintain or grow

their skills and knowledge, the Department has

mandated 80 hours of professional continuing

training every two years. This program is

designed to keep the workforce current with

acquisition reform changes, functional and technical advances, and generally to improve the

business knowledge and leadership competencies of the workforce. A third effort is to “outsource some of the business education and leadership development training to universities and

other training organizations.” The outsourcing

will allow the department to decrease its cost of

education and to bring in a broader perspective

in acquisition education. A fourth effort is the

incorporation of distance education into the

delivery methods used by the schools. To

improve efficiency, to train more personnel, and

to reduce cost, DAU with its consortium schools

is developing and designing more courses to be

offered by CD-ROM or on the internet. Current

plans are for 50 percent of the consortium’s

curriculum to be offered through CD-ROM or

internet.

Figure 21. Sample Career Field Sizesa

Program Management 17,000

Procurement/Contracting 19,000

Science/Engineering 45,000

a There are many other career fields not included, e.g., logistics, communications, that have acquisition personnel as part of their

 career programs.

Figure 20. Acquisiiton and Technology Workforce Breakouta

Military Civilian Total

Army 2,675 39,338 42,013

Navy 3,304 46,379 49,683

Air Force 9,605 23,816 33,421

Other DoDb 754 23,176 23,979

Totals 16,378 132,709 149,087

a Based upon the Jefferson’s Solution revised Packard definition for core acquisition positions – March 1998.

b Includes organizations such as DLA, BMDO, etc.
Part 4 The United States

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Chapter 9

TEST AND EVALUATION

OF WEAPON SYSTEMS

directly to Congress without departmental

approval.

Responsibility for DT testing rests with the

Director, Test, Systems Engineering & Evaluation (DTSEE). DTSEE reports to the Under

Secretary of Defense for Acquisition & Technology, USD (A&T), through the Principal

Deputy. DTSEE serves as the advocate for DT

for all major weapon systems and manages all

DT activities and Systems Engineering activities. DTSEE establishes all DoD policy and procedures for Developmental Testing, and also

oversees all major test ranges in DoD. These

test ranges, which are collectively known as the

Major Range and Test Facility Base (MRTFB),

are shown in Figure 23.

SERVICE TEST ORGANIZATIONS

While DTSEE and DOTE direct T&E activities

within OSD, they primarily have a policy making

and oversight role. Actual testing is sponsored by

the military components and is conducted by

contractors or developing agencies (for DT) or

by the independent Operational Test Agencies

(for OT). Each military component has a Test

Executive, who serves as a focal point for T&E

policy and oversight and manages the T&E process. Each Test Executive reports directly to the

senior military officer (Chief of Staff or Chief

of Naval Operations) of that military component. Each military component has an independent Operational Test Agency (OTA). As shown

in Figure 22, the OTA commander reports

“Testing is the conscience of Acquisition,” stated

former Secretary of Defense William J. Perry,

in referring to the role DoD’s test organizations

play in acquisition. As the “conscience” of the

system, the DoD test organizations provide

timely information to decision makers on the

health of a weapon system and help to identify

and reduce development risks. The department

divides Test and Evaluation (T&E) into two

parts: Development Testing (DT) and Operational Testing (OT). DT refers to the early testing often performed by the contractor, while OT

is “combat testing.”

The current Test and Evaluation structure is

partially due to Congressional concern in the

70s and early 80s about the adequacy and realism

of operational testing. In 1983, Congress created

the Director, Operational Test and Evaluation

(DOT&E) as a safeguard against billion-dollar

weapons being produced with insufficient

operational (“combat”) testing. To ensure a

check and balance to the acquisition organization and to provide a bias-free view of

operational testing to the decision-makers, the

Director reports directly to SECDEF and

DEPSECDEF. DOT&E is responsible for oversight of operational testing in the department.

This is primarily a policy making and oversight

role. Actual testing is conducted by the individual services through parallel organizations

established within the Services. See Figure 22

for an organizational perspective on test and

evaluation in DoD. The Director is appointed

by the President and confirmed by the Senate.

DOT&E has the unusual authority to report
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-50

Figure 22. DoD Test and Evaluation Organization

Secretary

of the

Army

Army

Materiel

Command

(AMC)

Marine

Corps

Operational

Test and

Evaluation

Activity

Air

Force

Materiel

Command

Air Force

Operational

Test and

Evaluation

Center

Operational

Test and

Evaluation

Force

Navy

Systems

Commands

SPAWAR

NAVAIR

Marine

Corps

Systems

Command

(MCSC)

Operational

Test and

Evaluation

Command

(OPTEC)

TEMA

Chief of Staff

of the

Air Force

Chief of

Naval

Operations

Commandant

of the

Marine Corps

Chief of Staff

of the

Army

N091 AF/TE

aaaaaa aaaa

DUSA(OR)

Secretary

of the

Navy

ASA (ALT) ASN

(RD&A)

Secretary

of the

Air Force

ASAF (A)

Director

Operational Test

and Evaluation

Secretary of Defense

Under Secretary of Defense

(Acquisition and Technology)

(USD[A&T])

Deputy Director

Research and Engineering

(DDR&E)

Director

Test, Systems Engineering

and Evaluation

Joint Interoperability

Test Command

(JITC)
Part 4 The United States

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Figure 23. Department of Defense Test Ranges

directly to the service Chief of Staff, and is a

general officer. They are listed below:

ARMY: Operational Test & Evaluation

Command (OPTEC) located in Alexandria,

Virginia,

NAVY: Operational Test & Evaluation Force

(OPTEVFOR), located in Norfolk, Virginia,

AIR FORCE: Air Force Operational Test

& Evaluation Center (AFOTEC), located

in Albuquerque, New Mexico, and

MARINE CORPS: Marine Corps Operational Test & Evaluation Activity (MCOTEA),

located at Quantico, Virginia.

Each OTA performs Operational Test & Evaluation to determine effectiveness and suitability

of weapon systems. These tests are independent

of the developing agency, the program manager,

and the contractor. This provides for an unbiased assessment of a system’s combat potential.

Unlike DT, which is oriented to verifying contract or specification compliance, the OT performed by the OTAs is structured to stress the

weapon system as it would be used in combat,

Dugway Proving

Utah Test and Training

Aberdee

Proving

Ground

NAVAIRWARCE

Aircraft

PAX

Arnold

Engineering

Development

Center

45th Space

Atlantic

T&E

Atlantic

Fleet

Training

Air Force

Development

Test Center

49th Test

White Sands

Missile

U.S. Kwajalein

Joint

Interoperability

Electronic

Proving

Air Force

Flight Test

Yuma Proving

NAVAIRWARCE

Weapons

PT

30th

Space

Wing

NAVAIRWARCE

Weapons Div

China

Fighter Weapons
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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including tactics and countermeasures. The

results from this type of testing give the users

and the decision-makers valuable insights into

combat performance. The Test Executive in each

Service provides test policy guidance, approval

of ACAT II and III programs and reviews

MDAPs prior to submittal to DOT&E.

Army

As seen in Figure 22, the Test Executive for the

Army is TEMA (Test & Evaluation Management Agency). Army DT is actually conducted

by TECOM (Test & Evaluation Command),

which is part of the Army Materiel Command

(AMC). Army OT is conducted by TEXCOM

(Test and Experimentation Command), which

is part of the Operational Test and Evaluation

Command (OPTEC). The Army is the only Service to have a single activity responsible for

evaluation of both DT and OT— the Operational

Evaluation Command (OEC).37

Navy

The Test Executive for the Navy is N091

(Director of Navy Test & Evaluation and Technology Requirements). Navy DT is conducted

by the cognizant systems command, such as

NAVAIR, and the Operational Test and Evaluation Force (OPTEVFOR) conduct Navy OT. The

Marine Corps Systems Command (MCSC) is

responsible for DT testing, while the Marine

Corp Operational Test and Evaluation Agency

(MCOTEA) (independent of MCSC) performs

operational testing.

Air Force

The Air Force Test Executive is AF/TE (Air

Force Test & Evaluation). Air Force DT is conducted by the Air Force Materiel Command

(AFMC) and the Air Force Operational Test and

Evaluation Center (AFOTEC) conduct Air Force

OT.

OBJECTIVES OF DT&E/OT&E38

The primary objective of DT is to measure

technical performance and to verify contract

compliance or specification compliance. DT

programs should be structured to identify and

mitigate technical design risks. This is an iterative process. As the tests are conducted problems will be encountered and design fixes will

be incorporated. The primary purpose of OT is

to determine “operational effectiveness” and

“operational suitability,” and survivability.

Operational effectiveness refers to the ability of

a system to accomplish the intended mission

when used in realistic combat conditions by

typically trained/skilled operators. Operational

suitability refers to the ability to maintain and

deploy the system, with particular emphasis

on reliability, availability, maintainability, and

training.

DT is the responsibility of the program manager or developing agency and is conducted by

both the contractor and government test organizations. DT serves as the essential technical feedback loop of the engineering development process. OT, on the other hand, is not the responsibility of the program manager because OT must

be accomplished independently of the systems

developer.

Once DT testing is complete then the contract

for Engineering and Manufacturing Development (EMD) is complete. The weapon systems

then enters into OT testing which must be successfully completed for approval of LRIP and

to continue into production. The results will be

reported to the Secretary and the Senate and

House Armed Services and Appropriations

Committees.

As part of the Acquisition Reform effort within

the department several changes are being evaluated. The first change is combining Developmental Test activities with Operational Test
Part 4 The United States

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activities where possible, which should result

in more efficient use of test resources and test

articles. This can be done using Integrated Product Teams or a Combined Test Force. However,

the need for some totally independent OT still

exists. The second change is to have contractors

do more DT and the government less. This

should result in placing more development risk

on the contractor, and seamless testing throughout development. The third change is to have

earlier involvement of the test force (especially

the operational testers) during systems development. This should expose potential problem

areas much sooner, when they can be addressed

more economically. The fourth change is to

increase the use of modeling and simulation

during systems development and test and evaluation activities. Modeling and simulation have

great potential for cost/time savings because they

can quickly produce repeatable test events under

many varied environmental conditions. The fifth

change is to combine testing and training whenever possible. The benefits of combining testing/training come from letting users operate

equipment earlier in the design cycle, resulting

in valuable feedback from users and early

insights about combat performance in the field.
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Chapter 10

COOPERATIVE ACQUISITION

AND FOREIGN MILITARY

SALES (FMS)

government to government (referred to as FMS)

or foreign government to a U.S. Contractor

(referred to a Direct Commercial Sale). Through

FMS, allies and friendly nations spent an estimated $23.5 Billion dollars in Fiscal Year 1996.39

See Figure 24 for top 15 U.S. FMS contractors.

Both the executive and legislative branches play

significant roles in Cooperative Acquisition and

Security Assistance. Congress has been an active

participant in foreign policy and security assistance. The legal basis for executive branch

actions in security assistance is codified in

several different places, including the Foreign

Assistance Act, Foreign Military Sales Act, Arms

Export Control Act, Export Administration Act

(which has expired and not been renewed).

Cooperative projects are covered by Title 10 of

the United States Code.

Besides providing the legal basis for arms sales

and transfers, Congress is involved in several

other ways. As part of its routine procedures,

the department is required to notify Congress

whenever it sells significant military equipment

with a value over $14 million to a foreign government, or when an international agreement for

a cooperative acquisition project is signed, or

in certain cases, proposed for signature. In some

cases, Congress will pass specific legislation

denying a sale of arms. One of the most famous

examples of this type of congressional involvement was the passing of the “Pressler Amendment”40 which restricted the sale of F-16s to

Pakistan. This, however, is extraordinarily

“I have determined that International Armament

Cooperation is a key component of the Department of Defense’s bridge to the 21st Century,”

stated Secretary shortly after he became Secretary. The pressures of smaller defense budgets,

and increasing operational activities with coalition forces, makes international armaments

cooperation with our allies an attractive proposition. This is nothing new. The U.S. has a history

of successful cooperative programs, such as

efforts beginning in the 1970s to cooperatively

produce systems, such as the NATO Airborne

Warning Aircraft Systems (AWACS) and the

F-16 multi-national production programs. By

sharing development and production costs, each

national partner can buy more military power at

less cost. Standardizing equipment, particularly

with our NATO allies, can also lead to shared

logistics lines, making the fighting forces more

capable, again at less cost. While the department

has participated in successful, and some not so

successful, cooperative programs, many more

opportunities exist for cooperation. As DoD

moves to the 21st Century and budgets continue

to decline, the department is putting renewed

effort into expanding cooperation with our allies.

Another international defense program—Foreign Military Sales (FMS), is a part of Security

Assistance. This program provides military and

economic assistance to our allies. FMS includes

the sales of military equipment, education and

training of foreign military, and loans or grants

for the purchase of U. S. equipment. Arms sales

in the United States are conducted in two ways:
Part 4 The United States

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unusual. Normally, the mere threat of legislative restriction will cause the executive department to restructure an arms sale, as was the case

with the F-16 aircraft sale to Saudi Arabia.

In the executive branch, the three primary

departments most heavily involved in security

assistance and cooperative programs are the

Departments of Defense, Commerce and State.

The Department of State (DOS) has the overall

responsibility for the continuous supervision and

general direction of the security assistance

program. The Secretary of State determines

whether or not there will be a security assistance

program, sale, or export for a country. Department of State makes its decisions based upon

the foreign policy and national security implications of a transaction. Does this transaction

protect and promote U. S. interests throughout

the world? What are the political, economic,

human, environmental and security impacts of

this transaction? In the DOS, two offices play

key roles: The Under Secretary of State for Arms

Control and International Security Affairs which

is the principal adviser and focal point for

security assistance matters; and the Bureau of

Political Military Affairs, Office of Defense

Trade Controls which has responsibility for

setting policy for export of foreign military sales

items and for issuing export licenses for military equipment sales. They also maintain the

International Traffic in Arms Regulations

(ITARs), which provides the rules for the registration of, and import and export licensing or

all direct commercial imports and exports of

armament into and out of the United States. The

ITARs contain the U.S. Munitions List of military equipment, such as aircraft, ships and other

equipment, subject to regulation.

Figure 24. Top 15 Contractors 1998

DoD Foreign Military Sales

Total: $8,409,630,000

Rank Parent Company Amount ($000s) Market Share

1 Lockheed Martin Corp $ 1,638,770 19.49 %

2 Boeing Co. 1,523,285 18.11

3 Raytheon Co. 1,214,881 14.45

4 Avondale Industries Inc. 584,016 6.94

5 General Electric Co 329,709 3.92

6 United Technologies Corp. 291,917 3.47

7 BDM Corp. 171,108 2.03

8 Science Applications Intl. Corp. 162,698 1.93

9 Northrop Grumman Corp. 152,424 1.81

10 FMC Corp. 144,251 1.72

11 GTE Corp. 142,120 1.69

12 General Dynamics Corp. 122,993 1.46

13 Renco Group Inc. 87,079 1.04

14 VSE Corp. 85,572 1.02

15 Canadian Commercial Corp. 84,081 1.00

Rankings are based on prime contracts of $25,000 or more for military R&D, services and products

sold to non-U.S. governments
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The Department of Commerce, Bureau of Export

Administration has responsibility for setting policy

and licensing for export of equipment that has

primarily a commercial application but with

military application as well, so-called dual use

items. There are a multitude of other organizations involved in Security Assistance from the

National Security Council, Arms Control and

Disarmament Agency, Defense Threat Reduction Agency,41 Security Assistance Offices and

Offices of Defense Cooperation in all major

foreign capitals and other organizations, which

are not to be discussed here.

Department of Defense

Within DoD, the Under Secretary of Defense

for Policy (USD (P)) is the principal national

security and security assistance adviser to the

Secretary. Reporting to the USD (Policy) is the

lead agency within DoD for security assistance—the Defense Security Cooperation

Agency42. Cooperative acquisition programs

have a different reporting chain of command

with responsibility resting within the office of

the USD (A&T) in the Deputy Undersecretary

of Defense (International Programs). Figure 25

shows the organizational relationships for

security assistance and cooperative acquisition.

The senior armaments cooperation policy and

oversight body in DoD is the Armaments

Cooperation Steering Committee, which is

chaired by USD (A&T) and includes the Service

Acquisition Executives as members.

Military Services

Each of the Services has approached its management of these two programs—Cooperative

Acquisition & FMS—in a different way.

Figure 25.

Organizational Relationships for Security Assistance and Cooperative Acquisition

Air Force

SAF/IA

Navy

IPO

Army

DUS (IA)

USD (P) USD (A&T)

DUSD

(I&CP)

Defense Security

and

Cooperation Agency

Armaments

Cooperation

Department

of Defense

Armaments

Cooperation
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Army

The Deputy Under Secretary (International

Affairs) (DUS (IA)) has responsibility for

security assistance and cooperative programs

within Assistant Secretary of the Army (Acquisition, Logistics and Technology). Reporting to

the DUS (IA) is, and with executive agent

responsibility, the U.S. Army Security Assistance Command (USASAC), a major subordinate command of the Army Materiel Command

(AMC). USASAC, created in 1975, is responsible for worldwide execution of the Army

security assistance program including co-production of Army materiel with our allies and

international partners. They also develop the

Army position on commercial license applications for the export of munitions, services and

technology.

Within AMC, the Deputy Chief of Staff for

Security Assistance, has responsibility for the

Office for International Programs. This office

sets policy and provides oversight for international cooperative programs, international

agreements, and interoperability. They also have

several offices located overseas in Australia,

Canada, France, Germany and the United Kingdom, which focus on research and development

activities.

Navy

The Navy has centralized international activities into the Navy International Program Office

(IPO). The Navy IPO is part of the Assistant

Secretary of the Navy (Research Development

and Acquisition) staff. The Navy IPO has

responsibility for both cooperative programs and

security assistance.

Air Force

The Deputy Under Secretary of the Air Force

for International Affairs (SAF/IA) is the central

office for policy and oversight of security assistance and cooperative acquisition. Air Force

Materiel Command, Director of International

Affairs and its subordinate command, the Air

Force Security Assistance Command (AFSAC),

manage the security assistance program. Cooperative acquisition program management is

the responsibility of the Assistant Secretary

of the Air Force (Acquisition). Management of

cooperative programs is part of the normal

acquisition management system.

Armaments Initiatives

The DoD policy on armaments cooperation is

to “utilize International Armaments Cooperation

to the maximum extent feasible, consistent with

sound business practice and with overall political, economic, technological and national security goals.” This policy goal, while not always

realized, gives clear indication of the priority

placed by DoD on cooperative programs. There

is a variety of initiatives to encourage the cooperative development of systems. NATO and nonNATO multilateral and bilateral forums, Data

Exchange Agreements, and Scientific and

Engineering Exchanges are efforts that can lead

to the development of armament cooperation.

A recent initiative by the department is the creation of the International Cooperative Opportunities

Group (ICOG). The ICOG focuses early in the

acquisition process by looking at the science and

technology programs, Advance Concept Technology Demonstrations, and the early phases of

major systems. By identifying common requirements, complementary technologies, budgets

and strategies, and a potential for industrial teaming, forming a cooperative program stands a

much greater chance of success. Another program, the Foreign Comparative Testing (FCT)

Program, has already shown success with an

estimated $3.3 billion dollars saved in the avoidance of costly RDT&E.43 FCT is designed to

test for eventual buy of off-the-shelf military

equipment developed by other countries. This
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program, which has been in existence for 20

years, has tested nearly 380 pieces of military

equipment from missiles to avionics with

procurement of 95 of them.
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Chapter 11

THE INDUSTRIAL BASE

Rather than imperil their commercial divisions

with increasing costs, industry spun-off separate defense divisions. Having a separate manufacturing and technology base increased the cost

of buying military equipment. An early 1990s

study indicated that the defense industry legitimately charged a 20–25 percent premium

because of these arcane rules and regulations

mandated by the government.44

Traditionally, the United States has relied on a

privately owned, profit-oriented industrial base

to provide most of the goods and services used

by the military departments. This defense manufacturing and technology base industry can be

characterized as providing high performance,

high quality military equipment at high cost with

low volume of production. Defense is currently

over a $100 billion a year business. This includes

over $80 billion a year for research and development and procurement of systems and equipment. Four firms—Lockheed Martin, Boeing,

Northrup-Gruman and Raytheon—are the dominant businesses in defense. Three of the four

firms, with Boeing being the exception, rely on

defense contracts for over 90 percent of their

business revenue.45

Over the last 50 years, the department has

“primed the pump” of R&D with its investment

in many new technologies. The U.S. Government supported and directed programs that

produced the basic technologies that spawned

numerous military and commercial innovations.

These innovations, both military and commercial applications, include mainframe computers, personal computers, stealth technology,

avionics for commercial aircraft and many other

During the early 1940s, the demands of World

War II quickly overcame the capabilities of the

small U.S. peacetime arsenal system. The United

States government turned to its commercial

industry to produce the millions of pieces of

military equipment needed to pursue the war.

At the end of the war, as it has done after every

war, the military demobilized. Its industrial base

—the “Arsenal of Democracy”— demilitarized

and returned to the lucrative pre-war commercial market—producing cars and household appliances. With the advent of the Korean “police

action,” the United States again called on its

commercial industry to produce military equipment. But, as we moved from the “hot” Korean

conflict to the “Cold War,” the U.S. defense

budget remained untraditionally high. With both

the United States and the Union of Soviet Socialist Republics (USSR) continuing to produce

large amounts of military weapons, each generation more capable than the preceding, the

defence industry became “big business.” During this time period, U.S. industry transmuted

into what President Eisenhower called the

“military-industrial complex”—a permanent

defense technological and manufacturing industry.

As the defense industry grew, the Defense

Department developed its own set of specialised

procurement rules and regulations, system of

technical specifications and standards, Cost

Accounting Standards (CAS), ethics requirements and oversight procedures. Congress,

responding to cost overruns and to various special interest groups passed legislation imposing

many new requirements on the Defense Department and its contractors, such as set-asides of work

for small businesses and domestic producers.
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technologies. As an example, in the

microelectronics industry, DOD was once the

dominate buyer, with almost 70 percent of the

microelectronics industry sales in 1965 and contributing significantly to that industry’s investment in R&D. Today, defense accounts for less

than 1 percent of microelectronic sales. In general the defense investment over the last twenty

years in R&D has been overshadowed by private sector investment in R&D. In 1997, defense

R&D spending provided 30 percent of the U. S.

investment in R&D. This was down from the

peak years of the defense buildup in the mid1980s when it was 46 percent of the national

investment.

While DOD policy has been to rely on private

sector facilities for the fulfillment of government contracts, remnants of the government’s

earlier“arsenal system” still remain. These public facilities are used to manufacture and repair

aircraft, ships, ground combat systems, and other

military equipment. They generally fit into two

categories. The first category is government

arsenals and depots where government personnel

perform all the work. The other category is

referred to as Government-Owned-ContractorOperated (GOCO) facilities. See Appendix E

for a listing of arsenals, depots, and GOCOs

currently performing defense work.46 While it

has been a slow process, the military departments

have attempted to divest itself of GOCO plants.

As an example, the U.S. Air Force owned 100

GOCOs in 1950; today, it is down to seven GOCOs

with two additional GOCOs planned for transfer

to the private sector in late 1999. One of the

chief causes of delay in the GOCO divesting

process has been the need for environmental

cleanup.

In recent years, several trends have emerged as

a result of declining defense budgets. Businesses

have left the defense market, companies have

merged, and the Department has recognized

that its defense budget could not support its

modernization program as well as a separate defense industrial base. While no hard data exists,

significant numbers of companies at the 3rd or

4th tier vendor level have apparently left the defense business over the last decade. Large companies, such as Intel, Motorola and HewlittPackard have refused to do business with the

Department unless it buys on commercial terms,

without the imposition of expensive and burdensome federal laws and regulations. This was a

simple matter of economics—smaller budgets,

the concomitant drop in work orders and the

“stretching out” of programs made the defense

business less attractive to commercial vendors.

While many companies had lost interest in the

defense market, the remaining companies still

had too much manufacturing capacity to meet

future defense budgets. In 1993, then Deputy

Defense Secretary Perry had his famous “Last

Supper” meeting with the chief executive

officers (CEOs) of top defense corporations. He

is quoted as having admonished them by

commenting that less than 50 percent of them

would be at the next meeting. This led to “merger

mania.” Defense consolidation and mergers

became monthly news. Lockheed and MartinMarrietta merged to become Lockheed Martin.

Hughes Aircraft and Raytheon merged as

Raytheon. Northrup and Grumman merged into

Northrup-Gruman Corporation, and Boeing and

McDonnell-Douglas merged under the Boeing

banner. Other companies like GE, Westinghouse,

and IBM got out of the business completely. As

a result, Lockheed, Boeing, Northrop Grumman,

and Raytheon emerged from the merger mania

period as “the big four.”47 Defense industry went

from five or six manufacturers for major weapons systems to one or two for a military product. Figure 26 shows the top fifteen defense contractors for 1998. Figure 27 indicates the changes

in the numbers of companies for each market.

“Merger mania” may be over for at least the major

contractors. Recently, the Justice Department,
Part 4 The United States

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Figure 27. Changes in Defense Market

Total Purchases: $115,847,206,000 Fiscal 1997 Contract Awards ($000s

Rank Parent Company Total Air Force Army Navy

1 Lockheed Martin Corp. $12,395,041 $6,530,533 $1,890,458 $3,731,404

2 Boeing Co. 10,988,491 6,503,141 704,209 3,661,614

3 Raytheon Co. 6,478,655 1,643,706 2,244,394 2,393,454

4 Northrop Grumman Corp. 4,091,558 2,621,049 562,445 831,498

5 General Dynamics Corp. 2,101,421 0 674,544 1,400,029

6 United Technologies Corp. 1,917,962 1,104,109 481,114 350,041

7 Litton Industries Inc. 1,751,402 224,620 161,475 1,291,309

8 General Electric Co. 1,629,903 551,277 227,107 779,620

9 Science Applications Intl. Corp. 1,102,057 290,080 482,102 195,939

10 ITT Corp. 917,929 235,510 612,342 54,827

11 GTE Corp. 911,598 222,593 568,582 39,969

12 TRW Inc. 791,617 366,661 222,157 52,557

13 Textron Inc. 750,285 0 159,465 567,918

14 Computer Sciences Corp. 735,443 291,417 204,653 96,754

15 Bath Holding Corp. 694,738 0 0 694,738

Figure 26. Top 15 Defense Contractors

Department of Defense Number of Suppliers

Industrial Base Past Current

Aircraft

Bombers 3 1

Fighters 5 2

Helicopters 4 2

Space

Ballistic Missile Defense 6 2

Launch Vehicles 3 2

Satellites 5 2

Rocket Motors 5 2

Shipbuilding

Aircraft Carriers 1 1

Submarines 2 1

Surface Combatants 5 2

Auxiliary/Amphibious 7 3

Shipyards 8 4

Tracked Vehicles

Tanks 1 1

Armored/Personnel Carriers 2 1

Missiles

Strategic 1 1

Tactical 8 3
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with OSD concurrence, blocked the Northrop

Grumman and Lockheed merger because it had

the potential of creating a monopoly. One of the

foundations of government procurement is competition. As companies drop out of the defense

business or merge, competition disappears and

costs rise. This is particularly worrisome with

the large system integration companies like

Lockheed and Boeing. As the defense business

base continues to decline smaller companies will

probably continue to merge. At the large prime

level the market has probably seen the end of

U.S. company mergers, although mergers or

partnerships between international companies

are still probable.

Since the 1950s, the U.S. has maintained a separate defense industrial base. This base is no

longer sustainable. The question, then, is how

to merge the defense industrial base with the

U.S. commercial base. Consequently, through

its “acquisition reform” and “revolution in business affairs” initiatives, the DoD has attempted

to change the way it does business. Some

changes have already been implemented. Military specifications and standards are no longer

the preferred method of doing business. Congress, at the DoD’s urging, has passed such legislation as the Federal Acquisition Streamlining

Act to remove some of the barriers. These laws

made modest changes with major issues still left

to be resolved, such as eliminating specialized

accounting and auditing systems.

In sum, the U.S. defense industrial base is in a

period of change. Current initiatives are focused

on merging the defense/commercial industrial

base, reducing the cost of doing business,

reducing the departments and the defense

industry’s overcapacity, and, at the same time,

maintaining a competitive market.
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Chapter 12

MY CRYSTAL BALL

costs and make more money available for

modernization of military equipment,

• Mergers at the major system company level,

with a corresponding decrease in the

competitive environment,

• Increased reliance on the commercial

industrial base for defense needs, and

• Increased globalization of the defense

industry.

What is the environment in 2005 going to look

like? There are several geopolitical trends that

will impact the direction of the defense

department’s spending. First, there will be no

single country that will have the military power

to threaten the United States or its Allies. Russia will continue to meld into the international

world order and China will continue its move

towards becoming an economic power. While

China may continue to be a regional threat, its

primary emphasis will be economic. Secondly,

there will be a continual need for a military

response by the United States and its partners

typified by the regional conflict in Kosovo.

While each conflict will require a different

response, they all will have certain characteristics to that response: (1) conflicts will be fought

by coalitions; (2) a need for allied air dominance;

(3) interoperability of forces; (4) rapid movement of personnel; (5) real-time intelligence

information; and (6) a quick humanitarian

response.

These conflicts will also generate concerns with

asymmetrical responses, such as terrorist (or

The year is 2005. The nation is five years into

the new millennium and the F-22 has entered

into the inventory. The new administration has

announced plans for the next generation of air

vehicle—Will it be a fighter or Unmanned Air

vehicle (UAV)? Who will buy it? How will they

buy it? Who will be the supplier? Discussing

(Guessing?) the future gives one the opportunity to demonstrate ones lack of prescience.

However, by following the old saw “the past is

prologue,” i.e., by looking at current military

and acquisition trends, future trends may

emerge.

The current major trends impacting the acquisition business are:

• downturn in defense R&D and procurement

budgets,

• emphasis on jointness and centralization of

the defense acquisition business into OSD and

Defense Agencies,

• Congressional involvement in the minutia

of the acquisition business,

• decrease in the size of the acquisition

workforce,

• increased need for training for the acquisition workforce,

• Republican and democratic administrations

efforts to reform the acquisition business,

• Outsourcing and privatization of government work and infrastructure to decrease
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• The major defense firms will continue to

perform primarily as integrators and will

become more dependent upon the commercial industry to provide the products that make

up the “ brains” of weapon systems.

• Short commercial cycles will drive acquisition strategies that match the changing

technology cycle. These short cycles will

continue to exacerbate the obsolescence problems the U.S. is currently experiencing in its

weapon systems. The F-22 is often cited as

an example of the obsolescence issue. It is

reported to have identified several thousand

“old” parts prior to delivering the first production aircraft next century. While this is a

small portion of the aircraft’s parts it can have

a significant impact in driving up the total

ownership costs of the department. Closely

allied with this, is the budgetary impact of

fewer dollars available thus driving strategies

that look for incremental changes to systems

and equipment. Evolutionary acquisition will

be the preferred method of acquisition.

• Technological changes to the commercial

market will introduce less costly methods of

doing business and this will drive cost saving

changes in the logistics and management

systems of the department.

• There will be increased congressional

involvement in details of the acquisition business. As the defense budget becomes smaller

Congress will have even less discretionary

spending oversight and will find that involvement in defense programs is an irresistible

target of opportunity. One other trend that has

accelerated in the last decade is the increased

amount of congressional members without a

military background. This demographic

change will continue and will result in

reduced DoD influence in the legislative

branch

rogue nations) retaliation with nuclear, chemical and biologic weapons and possible missile

attacks.

Our response in the year 2005 to this scenario

will include defense spending on creating a

theatre ballistic missile defense, responses for

Nuclear, Biologic and Chemical (NBC) attacks,

and equipping expeditionary forces. There will

be fewer new-start programs. Modifications to

existing platforms will be the norm with particular emphasis on changes that enhance interoperability stealth and maneuverability. The

space business will continue to receive a healthy

share of defense dollars for satellites that provide location details, communication and other

information. And finally the soldier on the

ground, the “digitized soldier” of the future, will

be increasingly dependent upon instant communications and information, and programs supporting this effort will continue to garner a

portion of the defense budget. Against these

needs will be continual pressure for more

defense with less money.

Against this background, the year 2005 will see

the following acquisition trends:

• The program office will change, becoming

smaller—25-50 people. It will be more joint,

with many more programs continuing to be

managed similar to the F-22 program or

totally separately from the Services, such as

the Ballistic Missile Defense Organization

(BMDO). The office will be much more

virtual with many personnel only working

several days a week at the office. The movement of some program offices to collocate

with the operational user or industry may

occur. There will be fewer military in the

acquisition business. The improved industrygovernment relations that have happened over

the last ten years will continue, although the

term Integrated Product Teams (IPT) will be

replaced with a new term.
Part 4 The United States

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technologies, be critical to changes in defense

hardware. Also, as we merge and globalize

the defense and commercial industrial bases,

surge capability and ensured sources of supply will become a greater problem. Solesource suppliers—such as we have now for

subs, tanks armored vehicles and strategic

missiles—will be the norm. A CSIS report48

states that, “by 2010, there likely will be only

one firm manufacturing expendable space

launch vehicles, strategic bombers, and a

variety of munitions from scatterable mines

to bombs and mortars.” Competition will have

to take place at the subcontractor level. This

will continue the pressure on the department

to get more defense for its dollars.

This chapter provided an introduction to the

acquisition business of the DoD as practiced in

1999. With the new century and changes in the

world environment the acquisition business

will change. It will offer new challenges and

opportunities for the future acquisition and technology worker. An important part of this work

will involve the development and production of

future weapon systems and equipment in a

cooperative effort with our allies.

The Service Systems, Product and Logistics

Commands roles will decrease in acquisition

as the logistics business relies more upon

commercial industry for support. The PEO

structure will continue as currently structured

thus continuing the role of the systems, product and logistics commands as providers of

personnel and facilities and managing process

issues.

• Outsourcing and privatization will continue.

Most of the logistics functions will be outsourced. The program office will outsource

much of its work with only a few key government personnel remaining on the staff.

Much of the defense budget will go to Service

contracts.

• Mergers will continue, but mostly across

international borders, such as the recent

merger to create Chrysler Daimler Aerospace.

The firms coming out of these combinations

will continue to ensure defense work is

equitably spread across countries, much as is

currently done in the United States among

the states. The role of commercial industry

in R&D will, with the exception of a few
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FURTHER READINGS

Gansler, Jacques S., “Defense Conversion:

transforming the arsenal of democracy,”

Cambridge, MA: MIT Press, 1995.

Gansler, Jacques S., “Affording Defense,”

MIT Press, Cambridge, MA 1989.

Gansler, Jacques S., “The Defense Industry,” MIT Press, Cambridge, MA, 1980.

Jones, Jr., Wilbur D. “From Packard to Perry,

A Quarter Century of Service to the Defense Acquisition Community,” DSMC

Press, GPO, Ft. Belvoir, Va., June 1996.

Kausal, Tony, “What a Difference a Century

Makes... Or Does It?, in Contract Management Magazine, October 1989, Pages

24-25.

McNaugher, Thomas L. “New Weapons Old

Politics, America’s Military Procurement Muddle,” The Brooking Institute,

Washington DC 1989.

Nagle, James F., “A History of Government

Contracting,” The George Washington

University, Washington, DC 1992.

Trask, Roger R. and Alfred Goldberg, “The

Department of Defense 1947-1997,

Organization and Leaders,” Historical

Office, Office of the Secretary of

Defense, Washington, D.C. 1997.

Congress

Davidson, Roger H. and Oleszek, Walter J.,

“Congress and Its Members,” Third

Edition (Washington: CQ Press, 1990).

Cabinets

Jennings, Ivor, Cabinet Government, 3d ed.

(1969).

Herman, Valentine, and Alt, James E., eds.,

Cabinet Studies (1975).

Mackie, T., and Hogwood, Brian, Unlocking the Cabinet: Cabinet Structures in

Comparative Perspective (1986).

Acquisition Desk Book –

http://www.acq.osd.mil/ar/

Acquisition

Benson, Lawrence R., “Acquisition Management in the United States Air Force and

Its Predecessors,” Air Force History

Office, 1997.

Ferrara, Joe, “DoD’s 5000 Documents: Evolution and Change in Defense Acquisition Policy,” Acquisition Review Quarterly, Fall 1996, Vol. 3 No. 2, pgs 109-

130.

Fox, J. Ronald with James L. Field, “The

Defense Management Challenge, Weapons Acquisition,” Harvard Business

School Press, 1988.
Part 4 The United States

4-67

ENDNOTES

13. For a fuller explanation of the Army’s

requirements process see Army Regulation

71-9 and TRADOC Pam 71-9: http://wwwtradoc.army.mil/cmdpubs/reqdef.htm

14. CNO (N8) may convene a Resources and

Requirements Review Board (R3B) to

perform a DON level review prior to

endorsement or validation and approval.

15. Prior to report.

16. Originally the title was Under Secretary of

Defense (Acquisition). I have used the current title to avoid confusion.

17. By law these political appointees are

required to bring a significant industrial

background.

18. Also referred to as the Component Acquisition Executive (CAE).

19. The departments, DoD agencies (and

others) are collectively referred to as “components.” Each agency has an acquisition

executive; the Component Acquisition

Executive, (CAE).

20. Terminology has changed over time.

21. Not every system will begin at concept

development. Some systems may enter at

phase II or III.

22. LRIP is not applicable to ACAT IA programs; however, a limited deployment

phase may be.

23. In fiscal year (FY) 1996 constant.

1. Federal Papers 52:327.

2. Federalist Paper #24.

3. Federalist Paper #26.

4. Trask, Roger R. and Alfred Goldberg, “The

Department of Defense 1947-1997, Organization and Leaders,” Historical Office,

Office of the Secretary of Defense,

Washington, D.C. 1997, page 15.

5. Federalist Paper #66.

6. Davidson, Roger H. and Oleszek, Walter

J., “Congress and Its Members,” Third

Edition (Washington: CQ Press, 1990),

page 327.

7. Oversight Plan for the 105th Congress,

pg. 1.

8. GAO also has specific legislative responsibilities and often undertakes reviews on its

own.

9. Korten, page 2.

10. The rest are Noncareer SES –67 and

Schedule C-128.

11. For clarification purposes, generally, when

“DoD” is used it means the entire department. OSD refers to the Secretary’s office.

12. Trask, Roger R. and Alfred Goldberg, “The

Department of Defense 1947-1997, Organization and Leaders,” Historical Office,

Office of the Secretary of Defense,

Washington, D.C. 1997. pg. 8.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

4-68

24. In fiscal year (FY) 1996 constant.

25. MDA is person with authority to approve a

programs entry into the next phase of

acquisition. USD (A&T) for example is

normally the MDA for ACAT I programs.

26. The “M” refers to Major Automated Information System Review Council.

27. Army and Navy also have category IV

programs.

28. Originally title Defense Systems Acquisition Review Council (DSARC), but revised

in 1987.

29. PDUSD(A&T) may also chair DABs.

30. Note that the DAB review only approves a

program to proceed; it has no direct role in

the resource allocation process.

31. The terms procurement, contracting and

acquisition can often be used somewhat

confusingly even for acquisition professionals. In the U.S., “acquisition” is meant to

be the all-encompassing term, while procurement and contracting are meant to be a

subset of acquisition dealing with the

awarding and management of contracts. To

make it even more confusing, Congress

often passes legislation using all three terms

interchangeably or often with specific

meanings.

32. SAF/AQC is OPR for Air Force contracting; Deputy Acquisition and Business

Management is OPR for Navy contracting;

and DASA Procurement is OPR for Army

contracting.

33. The only person authorized by law to award

or modify contracts

34. There are various measures of the acquisition workforce: 1) DoD Instruction

5000.58, acquisition organizations, 355,299

people; 2) Pub.L. no. 101-50, Defense

Acquisition Workforce Improvement Act,

105,544 people; and 3) Jefferson Solutions

Report, revised Packard Commission,

177,613 people. Current number reflects

March 1998 data.

35. ACQ is an acronym for “acquisition.”

36. GM/S – General Manager or General Scale

and refers to the Program Scale/Rank for

Civil Servants.

37. TECOM and OPTEC will be combined into

Army Test & Evaluation Command

(ATEC) effective 1 Oct 99.

38. Basic T&E policy is summarized in DoD

Regulation 5000.2-R. Each military component publishes policy and procedure

implementing T&E.

39. According to the US Arms Control and Disarmament Agency (ACDA) the US in 1996

exported approximately 23.5 Billion worth

of defense material, which is 55 percent of

the world amount of FMS.

40. Named for Senator Larry Pressler, Republican, South Dakota.

41. Formerly Defense Technology Security

Administration.

42. Formerly the Defense Security Assistance

Agency (DSAA).

43. The Defense System Management College,

Ft. Belvoir, Virginia conducts training for

management of Cooperative Acquisition

programs.
Part 4 The United States

4-69

44. Coopers and Lybrand study.

45. The US defense industrial base is somewhat

difficult to define, since it relies upon private companies, who continuously enter

and leave the business.

46. Schlesinger, Jr., Weidenbaum, M., Defense

Restructuring and the Future of the U.S.

Defense Industrial Base, CSIS Washington

DC, March 1998, p. 15.

47. Ibid. Forty some different aerospace companies, in whole or in part, were consolidated into three: Lockheed Martin, Boeing,

and Raytheon.

48. Schlesinger, Jr., Weidenbaum, M., Defense

Restructuring and the Future of the U.S.

Defense Industrial Base, CSIS Washington

DC, March 1998, p. 15.
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GLOSSARY

Appropriation – An authorization by an act of

Congress that permits federal agencies to

incur obligations and make payment from

the treasury. An appropriation act is the most

common means of providing budget authority.

Authorization – An act of Congress which permits a federal program or activity to begin

or continue from year to year. It sets limits

on funds that can be appropriated, but does

not grant funding which must be provided

by a separate congressional appropriation.

Buy-American Act – Provides that the U.S.

government generally gives preference to

domestic end products. (Title 10 U.S.C. &

41 A-D). This preference is accorded during the price evaluation process by applying

punitive evaluation factors to most foreign

products. Subsequently modified (relaxed)

by Culver-Nunn Amendment (1977) and

other 1979 trade agreements for dealing with

North Atlantic Treaty Organization (NATO)

allies.

Combat Developer – Command or agency that

formulates doctrine, concepts, organization,

materiel requirements, and objectives. May

be used generically to represent the user

community role in the materiel acquisition

process. (Army and Marine Corps)

Contract, Cost Reimbursement Type – A type

of contract which provides for payment to

the contractor of allowable costs incurred in

the performance of the contract. This type

of contract establishes an estimate of total

cost for the purpose of obligating funds and

establishing a ceiling which the contract may

not exceed, except with prior approval of the

contracting officer.

Acquisition – The conceptualization, initiation,

design, development, test, contracting, production, deployment, logistic support (LS),

modification, and disposal of weapons and

other systems, supplies, or services (including construction) to satisfy DoD needs,

intended for use in or in support of military

missions.

Acquisition Executive – The individual, within

the Department and Services, charged with

overall acquisition management responsibilities within his or her respective organization.

Acquisition Life Cycle – The life of an acquisition program consists of phases; each proceeded by a milestone or other decision

point, during which a system goes through

research, development, test and evaluation,

and production. Currently, the four phases

are: (1) Concept Exploration (CE) (Phase

0); Program Definition and Risk Reduction

(PDRR) (Phase I); (3) Engineering and

Manufacturing Development (EMD) (Phase

II); and (4) Production, Fielding/Deployment, and Operational Support (PF/DOS)

(Phase III).

Acquisition Management – Management of all

or any of the activities within the broad spectrum of “acquisition,” as defined above. Also

includes training of defense acquisition

workforce, and activities in support of planning, programming, and budget system

(PPBS) for defense acquisition systems/programs. For acquisition programs this term

is synonymous with program management.
Part 4 The United States

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Contract, Fixed Price Type – A type of contract, which provides for a firm price to the

government, or in appropriate cases, an

adjustable price.

Depot – A centrally located installation for the

storage, repair, or distribution of military

equipment and materials.

DoD Component Acquisition Executive

(CAE) – A single official within a DoD

Component who is responsible for all

acquisition functions within that Component. This includes Service Acquisition

Executives (SAEs) for the military departments and acquisition executives in other

DoD Components, such as the U.S. Special

Operations Command (USSOCOM) and

Defense Logistics Agency (DLA), who have

acquisition management responsibilities.

Foreign Comparative Testing (FCT) – A DoD

Test and evaluation program that is prescribed in Title 10 U.S.C. &2350a(g), and

is centrally managed by the Director, Test,

Systems Engineering and Evaluation

(DTSE&E). It provides funding for U.S.

T&E of selected equipment items and technologies developed by allied countries when

such items and technologies are identified

as having good potential to satisfy valid DoD

requirements.

Foreign Military Sales (FMS) – That portion

of U.S. security assistance authorized by the

Foreign Assistance Act of 1961, and the

Arms Export Control Act. The recipient

provides reimbursement for defense articles

and services transferred from the U.S. that

includes cash sales from stocks (inventories,

services, and training) by the DoD.

Government-Owned Contractor-Operated

(GOCO) – A manufacturing plant that is

owned by the government and operated by

a contractual civilian organization.

Government-Owned Government-Operated

(GOGO) – A manufacturing plant that is

both owned and operated by the government.

Industrial Base – That part of the total private

and government owned industrial production and depot level equipment and maintenance capacity in the United States and its

territories and possessions, and Canada. It

is or shall be made available in an emergency

for the manufacture of items required by the

U.S. military services and selected allies.

Industry – The defense industry (private sector

contractors) includes large and small organizations providing goods and services to

DoD. Their perspective is to represent

interests of the owners or stockholders.

International Agreement – An agreement concluded with one or more foreign governments or an international organization that

is signed or agreed to by any DoD component personnel; signifies the intent of the

parties to be bound by international law; and

is denominated as an international agreement

or an memorandum of understanding

(MOU), memorandum of agreement (MOA),

exchange of notes or letters, technical

arrangement, protocol, note verbal aide

memoir, arrangement, or any other name

connoting a similar legal consequences.
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Low-Rate Initial Production (LRIP) – The

minimum number of systems (other than

ships and satellites) to provide production

representative articles for operational test

and evaluation (OT&E), to establish an initial production base, and to permit an orderly increase in the production rate sufficient to lead to full-rate production upon

successful completion of operational testing.

For major defense acquisition programs

(MDAPs), LRIP quantities in excess of 10

percent of the acquisition objective must be

reported in the selected acquisition report

(SAR). For ships and satellites LRIP is the

minimum quantity and rate that preserves

mobilization.

Milestone Decision Authority – The individual

designated in accordance with criteria

established by USD (A&T) or by ASD (C3I)

to approve entry of an acquisition program

into the next phase.

Military Assistance Program – The U.S. program for providing military assistance under

the Foreign Assistance Act of 1961, as

amended by the Foreign Military Sales

(FMS) act of 1968.

Program Executive Office (PEO) – A military or civilian official who has primary

responsibility for directing several acquisition categories (ACAT) I programs and for

assigned ACAT II and III programs. A PEO

has no other command or staff responsibilities within the Component, and only reports

to and receives guidance and direction from

the DoD Component Acquisition Executive

(CAE).

Program Manager (PM) – A military or civilian official who is responsible for managing, through integrated product teams (IPTs),

an acquisition program.

Program Objectives Memorandum (POM) –

An annual memorandum, in prescribed format submitted to the Secretary of Defense

(SECDEF) by the DoD component heads,

which recommends the total resource

requirements and programs within the

parameters of SECDEF’s fiscal guidance. A

major document in the planning, programming, and budgeting system (PPBS) is the

basis for the budget. The POM is the principal programming document which details

how a component proposes to respond to

assignments in the defense planning guidance (DPG) and satisfy its assigned functions of the future years defense program

(FYDP). The POM shows programmed

needs for five or six years hence (i.e., in fiscal

year (FY) 94, POM 1996-2001 was submitted; in FY95, POM 1997-01 was submitted),

and includes manpower, force levels,

procurement, facilities, and research and

development (R&D).

Senior Procurement Executive (SPE) – The

senior official responsible for management

and direction of the Service procurement

system, including implementation of unique

procurement policies, regulations, and

standards (see Title 41 U.S.C. & 414,

“Executive Agency Responsibilities”).

System Program Office (SPO) – The office of

the program manager (PM) and the single

point of contact (POC) with industry,

government agencies, and other activities

participating in the system acquisition

process.
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Test and Evaluation (T&E) – Process by which

a system or components provide information regarding risk and risk mitigation and

empirical data to validate models and

simulations. T&E permits, as assessment of

the attainment of technical performance,

specifications and system maturity to determine whether systems are operationally

effective, suitable and survivable for

intended use. There are two types of T&E –

Development (DT&E) and Operational

(OT&E).
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Part 5 A Comparison of the Acquisition Systems

5-1

PART 5

A COMPARISON

OF THE

ACQUISITION SYSTEMS
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-2
Part 5 A Comparison of the Acquisition Systems

5-3

Chapter 1

A COMPARISON OF

THE ACQUISITION SYSTEMS

OF FRANCE, GERMANY,

THE UNITED KINGDOM

AND THE UNITED STATES1

be expected that the management systems for

procuring defense equipment might also be

similar. Alas, this is not the case, as readers of

previous chapters have already discerned. There

is some common ground; indeed, there is, on

occasion, some imitation of the admired

behaviour of others. But there are also real differences of structure and approach due to history,

political choices and perception of the ideal or

most efficient organization and process. This

chapter explores why comparisons of national

systems can be valuable, and how states can vary

in their conceptions of the best way to achieve

“value for money.” As is used in this chapter “value

for money” means the most efficient way of providing military equipment at the least cost. Then

this discussion explores commonalties and differences in the methods used to pursue “value for

money,” ranging from close defense ministry

relations with state-owned companies to competition among private firms. Next is an exploration of how national political systems interact

with specialised defense procurement mechanisms, followed by thoughts about collaboration

and “best practice” in defense procurement.

Why Seek Comparisons?

Why, it should be asked, is it desirable to make

any effort at comparison? Is it not enough to

Introduction

All the four states addressed by this study see

themselves and each other as liberal democracies

based on market economies. There is a common

acceptance that the military sector is there to

advance the overall purposes of the state and

must be subjected to the direction of the government. Thus, the principles of civilian oversight of the military are commonly endorsed, as

is the notion that the directly elected section of

the government, the legislature, needs to endorse

policies proposed by the executive. In the

specific field of defense procurement, all four

states frequently have a similar ambition to

acquire products that have not yet been developed and produced to give superiority to the

armed forces. Often, they cannot find something

satisfactory “off-the-shelf,” but have to make

provision for its definition, development and

manufacture to be sure to procure the weapons

for the next war and not the last one. For them,

defense procurement is not simply a matter of

choosing the most advantageous from what already exists, which is no easy task in itself. It is

often about articulating what should be created

and arranging for it to come into being.

With these similarities of political-economic

systems and of problems to be managed, it might
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-4

have a parallel but a separate understanding of

national systems as provided in other chapters?

Fundamentally, knowledge of a foreign national

procurement system is especially useful to personnel engaged in co-operative acquisition from

both a government and industry perspective and

will provide a better idea as to how to work with

representatives of other defense organisations.

But, comparison also promotes several other

purposes.

The first is that comparison and mutual understanding should facilitate the establishment of

collaborative projects when countries go beyond

trading in finished goods. In collaboration, they

aspire to agree on a common requirement and

to work together for its development and production. Such collaborative efforts have the best

chance of success if all the states involved can

understand each others’ acquisition systems; and

if an official or officer, fulfilling a function in

one government or industry, can easily identify

his/her counterpart(s) in the partner government(s) and in industry. With that knowledge,

government staffs may even prove ready to

modify their national systems in order to see

them work more harmoniously with others. That

can be said to have happened if the governments

of France, Germany, Italy and the UK delegate

significant project management powers to an

international armaments organization—the

Organisation Conjointe pour la Coopération en

matière d’Armement (OCCAR). European collaboration projects have not traditionally had a

strong multinational project office, a factor that

has often caused delay and even confusion. To

give projects clear direction, using OCCAR,

would thus be a major change. OCCAR was

recently given legal status under the European

Union with powers to enter into contracts and is

going through a national ratification processes

in 1999.

In addition to facilitating collaboration,

comparison of systems could also expose good

practices which others might seek to adopt. The

national chapters in this book are designed to

draw a picture of how national systems address

the complex tasks of making defense acquisition work. It is no secret that, in many cases,

these systems do not operate to the satisfaction

of all concerned.

A common cause of concern is that projects fail

to meet performance, time and cost targets,

although delivering within such targets does not

necessarily mean that a project has been optimally managed. In addition, and relevant to all

four states, is the fact that real unit prices of

equipment are still tending to rise significantly

from one generation of equipment to the other,

as the costs of different versions of the M1

Abrams tank illustrate. The former chief executive of Lockheed Martin, Norman Augustine,

humorously calculated that, if present trends

continue, the entire U.S. defense budget in 2054

could be devoted to the purchase of a single aircraft. This trend has not lost its relevance. As

the western technological prowess in the Gulf

War and Yugoslav conflicts shows, the U.S. and

its allies frequently acquire highly effective, but

expensive defense equipment.

No government can afford to be complacent

about its defense acquisition machine and has

reason to search the ways of others to look for

best practice. Some governments trying new

approaches include Australia’s application of

incremental acquisition methods, and New

Zealand’s exploration of leasing possibilities for

combat equipment, both looking for a better way

of doing business. Countries within the former

Soviet Empire and other developing countries

are seeking to establish effective defense procurement machines, and their governments may

well be interested to learn from the effective

practices of others.

Governments’ lack of complacency about defense

equipment procurement is reflected in the
Part 5 A Comparison of the Acquisition Systems

5-5

frequency and intensity with which they address

reform. In describing the four national systems

the authors have offered snapshots of the current systems. However, the snapshots cannot

reveal much of the history of change, which lay

behind them. The U.S. and the UK have been

reforming their acquisition systems continuously

for at least the last two decades. Defence

Acquisition Reform and Smart Procurement are

the headings under which further change is being

pressed forward in the U.S. and the UK respectively. In France, the role of the Delegation

Generale pour l’Armements (DGA) is being

changed with more focus on preparation for the

future, in particular long term cost implications;

private ownership is being extended in defense

industry; and industry is being required to bring

down its prices by as much as 30 percent. Only

in Germany does the absence of a history of continual change signal government contentment

with the acquisition system. But as the German

chapter shows, some reform has been present in

Germany since 1991.

While explicit comparisons should highlight

good practices and facilitate successful collaboration, unqualified parallels and contrasts

between different states are not easy to draw.

The Defense Acquisition System

The tasks involved in defense procurement have

a generic character, i.e., all governments need

to perform them in one way or another. Military requirements should be specified and programmed so that equipment can be bought

within the confines of the defense budget. It

makes sense for a military force to decide on

the capabilities it needs and what equipment

would meet these capabilities. In analysing all

four states, military authorities lead on requirement definition but do not always have the final

voice. The military is not always seen to be best

at deciding what generates “value for money”

for the nation as a whole. In the United States,

Congress often decides which systems will have

priority and in France the impact of exports plays

a key role in deciding the final configuration of

a military product. The programming task

implies some prioritisation arrangements.

Requirements are normally derived from consideration of natural strategy and doctrine. If

requirements are set which cannot be met from

goods already available, arrangements have to

be made for their development and production.

When you talk programming you generally talk

about deciding money versus goods and setting

priorities.

All four countries have identifiable formalised

structures dealing with a system from conception to its disposal. Individual projects go

through identifiable phases involving concept

and project definition, development and design,

production, in-service and disposal. Different

nations designate slightly varying formal phases,

and often have major project reviews as one

phase ends in which proceed or abandon decisions

are reached. As a weapon system moves through

these phases, equipment has to be contracted and

paid for, and arrangements have to be made in

the areas of training, maintenance, spare parts

and other provisions, so that manufactured

equipment can be used in service.

The acquisition machines undertaking these

tasks can be viewed as comprising three interacting elements: organisational units, the processes and procedures that link them, and the

policies that provide overall guidance. In

addition, each organisational element has its own

culture or view of the world. Such cultures are

often hidden from external view or not easily

susceptible to definition. Differences in

structures, processes, and policy mean that an

official performing a task or bundle of tasks in

one state can struggle to identify his or her

counterpart in another state.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-6

Concepts of “Value for Money”

(Satisfaction of National Needs)

On the policy format, all four governments under

scrutiny in this volume would see themselves as

pursuing “value for money” in their defense procurement activities. Indeed, “value for money”

has become an untouchable mantra regarding

UK procurement policy. However, the original

UK MoD document listed 53 headings in eight

categories relevant to “Value for Money”2

 and

it is apparent that states have different values

associated with defense.

Defense procurement can threaten or advance

at least four values of concern to government.

Most obviously, governments seek appropriate

defense capability often with new equipment or

systems to overcome an enemy threat. Secondly,

governments wish to promote economic

growth—defense procurement can have positive

or negative effects including employment, the

generation of technology, and foreign exchange

earnings through exports. Thirdly, a related but

different economic concern is the government

responsibility to provide a stable currency, which

requires keeping public expenditure within limits. Finally, in their foreign policies governments

seek to build and sustain particular relations with

external states and other bodies. Defense procurement choices can play a role in all areas.

None of these values are inherently contradictory. It may even prove possible to specify and

procure a piece of equipment that greatly

enhances defense capability, is sufficiently

inexpensive that it poses no threat to the defense

budget and financial stability, generates jobs and

technology useful in the civil sector, and, through

collaboration, offsets or sales, helps to strengthen

relations with friendly states.

In practice, however, choices among these values

often have to be made, and states can reach

different conclusions and compromises as to

what constitutes “value for money.” France has

long been associated with procurement choices

that made French defense industrial self-sufficiency (autonomy) and foreign policy freedom

of action more important than maximizing

French forces’ combat capability.3

 A 1992 U.S.

study found that:

“The DGA has pursued a coherent strategy for managing the defense industry.

DGA officials seeks to balance a variety

of objectives, including force requirements, the health of both the defense industrial base and the larger civil industrial base, and political goals such as

Franco-German co-operation. Because

of the need for trade-offs among these

objectives, the French procurement system is not designed to optimise individual

weapon systems but rather to further the

nation’s military, political and industrial

interests.”4

Of the four states under review, France is most

associated with specifying requirements that the

DGA believes will sell well in foreign markets,

thus bringing foreign exchange and perhaps foreign policy influence. Germany has had the most

restrictive policy on arms exports while the UK

has enjoyed a record of solid success with arms

exports during the 1990s. This is despite a

reluctance to give the government Defence

Export Services Organisation a significant voice

in the setting of military requirements. The U.S.

does not consider Foreign Military Sales (FMS)

during its development of systems/equipment,

but has set up a large system for FMS managed

by the Defence Security Cooperation Agency.

Perhaps significantly, Britain, France and Germany have signed up to a shared EU Code of

Conduct on Arms Exports and are seeking to

further reinforce the coherence of their arms

export policies.
Part 5 A Comparison of the Acquisition Systems

5-7

The U.S. appears more associated with maximising defense capability per se from procurement, but uses defense spending for socioeconomic purposes, such as to promote small

businesses, companies run by ethnic minorities

and other programs. It also normally insists that

foreign defense systems sold to the American

forces be manufactured in the U.S. Foreign

policy considerations have played a tangible part

in building European collaboration programs,

for instance with the Jaguar aircraft (as well as

the Concorde civil collaboration) being symbols

of UK commitment to Europe at a time when

European Community membership was not

available. Today, the UK Tracer program with

the U.S. reflects in part a British wish to signal

that it still believes transatlantic co-operation to

be feasible and viable.

Within the spectrum of defense capability, states

can differ for legitimate reasons as to the capabilities they feel would be most valuable. Common support for the NATO doctrine of flexible

response and shared responsibilities for the

defense of sectors of Germany against possible

Warsaw Pact attack pressed Germany, the UK

and the U.S. towards some similarity of needs.

At the time France left NATO’s integrated

command in 1966, a period began in which

France’s priority became a nuclear weapons

program. Its spending on conventional forces

inevitably suffered as resources were put into

nuclear weapons and their delivery systems.

With the unification of Germany, the German

Government found itself pressed to spend

extensively to develop the eastern Länder. Within

the (falling) defense budget, organisational

restructuring, manpower and infrastructure

became priorities and equipment’s share of the

budget declined to less than half that prevailing

in the UK.

States are reluctant to define too precisely how

they define “value for money,” but of great

significance is where procurement decisions are

made. That none of the four governments

analysed here entrusts defense equipment

choices solely to the ministry or department

focussed on defense sends a signal. They all want

the option of using equipment choices to serve

wider purposes. In France and the UK, the Cabinet makes major choices rather than by the

Defence Ministry, while in the U.S., Congress

can and does inject projects into the defense vote.

In Germany all large contracts over 50M DM

(>$30M U.S.) must be submitted to Parliament

before contract award. This reflects the

legislature’s concern with the executive branch

making long-term commitments without their

concurrence.

If the four states can differ in their interpretation of what constitutes “value for money,” they

can also vary in their views of how best to generate it through procurement policies executed

through organisations and processes. States overlap and differ not only in their sense of the values

that the defense equipment is supposed to generate; they also vary regarding the techniques

that they use to promote their values.

Generating Value for Money

Consider first the role of the state with regard

to the defense industry. Dating back to the

eighteenth century, France has a tradition of

sustaining a very close link between government

and defense industry, often in the form of a

national monopoly. DCN is still an integral part

of the French State partially manned by civil

servants. GIAT had a similar status until 1990

and then became a state-owned company.

Aerospatiale (missiles and helicopters),

SNECMA (gas turbines) and Thomson-CSF

were wholly or largely state-owned businesses.

These firms received contracts in their sphere

of competence regularly. In the recent restructuring, the majority of shares in Aerospatiale and

Thomson-CSF have been transferred to the private sector. Prior to 1979 Britain’s system was
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-8

not dissimilar, with Royal Ordnance as the state

arsenal and with state-owned national champions in prominent positions. In Britain, however,

state ownership of the defense industrial sector

was more shallowly based, much of it having

been introduced only after the advent of Labour

government in 1964. When Mrs Thatcher came

to power in 1979, it was accepted that Britain’s

defense sector would operate better in private

hands, and British Aerospace, Rolls Royce,

Royal Ordnance and British Shipbuilders were

sold to the private sector, with the latter being

broken up into separate companies based on individual yards. Mrs Thatcher’s government also

stressed that competitive tendering was the best

route to “value for money.” From the 1980s it

exposed UK industry to the greater use of

competition as the basis for the award of contracts. Germany also has a preference for competitive tendering, although contractors with

known special expertise may be chosen without

compe-tition.5

 The United States originally had

an arsenal system (government owned) for much

of its equipment, but after World War II created

the competitive privatised industrial-military

base that Eisenhower later warned against and

that it now relies upon for its products and

services.

One difficulty in reliance on competition is that

many defense industrial areas can be termed

“natural monopolies.” The intervals between

major orders can induce those losing a competition to abandon a specific area. The resources

needed to develop ever-more complex systems

has tended to increase, thus making entry costs

high for any company interested in moving into

many defense market segments. The number of

competing firms in any area tends to decline

unless governments make special efforts to preserve competition. During the late 1980s and

1990s three UK shipyards dropped out of warship construction (Harland & Wolf, Swan

Hunter and Cammell Llaird) and three were

bought by GEC (Yarrow, VSEL Barrow and

Cammell Llaird). Thus, in the U.S. and the UK,

the government on occasion holds qualified

competitions where the winner gets the larger

order and the loser a smaller contract, in order

to sustain competition for the future. GE and

Pratt & Whitney enjoyed this treatment in the

jet engine area and GEC-Marconi and Vosper

Thorneycroft seem likely to be sustained in the

UK. Sustaining competing firms had not been a

concern in France where the national monopoly

was an established tradition.

An alternative to supporting two firms for the

sake of being able to hold national competitions

in future is to allow more non-national firms to

bid. This has been a feature of UK policy since

the late 1980s. The UK DPA has been reported

as having tried (unsuccessfully) to persuade

Lockheed Martin to bid for its aircraft carrier

contract. The two companies that actually bid

were BAe/GEC and Thomson CSF (of France).

None of the states listed here would see its

market as closed to other defense suppliers, but,

historically, European states have been more

ready to buy U.S. equipment than the U.S. has

been willing to buy European defense goods.

Efforts to produce more equality in the Two Way

Street in defense equipment go back to the

1970’s, but have generated little advance.

Arms Deliveries to NATO and West

Europe, 1987, 1992-1997

Table 1 gives the findings of the International

Institute of Strategic Studies as regards recent

data, with the balance in favour of the U.S.

tending to grow.6

While it could be argued that the U.S. does not

buy European equipment because of the reduced

“value for money” involved, the U.S. readiness

to buy from Europe contrasts with world markets

as a whole. This despite the impact of the Foreign

Comparative Testing (FCT) Program, which has
Part 5 A Comparison of the Acquisition Systems

5-9

already shown success with an estimated $3.3

billion saved in the avoidance of costly RDT&E.

FCT is designed to test for eventual buy of offthe-shelf military equipment developed by other

countries. This program, which has been in

existence for 20 years, has tested nearly 380

pieces of military equipment from missiles to

avionics with procurement of 95 of them.

In third markets Europeans are frequently successful against the U.S. The International Institute for Strategic Studies data shows that, in

1994-7, the major West European states secured

30.1 percent of world orders versus the United

States’ 28.7 percent.7

 IISS data show Britain,

France and Germany having 36 percent of

world-wide defense deliveries versus the United

States’ 45 percent.8

An alternative to competition as a means of

securing “value for money” is a kind of stateowned or dominated “preferred supplier” company such as that seen in Spain, Italy, France,

until a recent period, and other European states.

Increasingly, such relationships are seen as not

delivering equipment in a cost-effective way,

and, in the treaty establishing OCCAR, France

has accepted (Europe-wide) competition as the

normal way to procure defense equipment and

reduce the state’s share of defense industrial

ownership. The most productive middle way

could be found in the partner relationships

between the government and the supplier

especially in the UK and the U.S. “Project”

partnering, most obviously beginning after any

competitive phase is over implies co-operative,

mutually beneficial relations between customer

and supplier. “Strategic” partnering, covering

many projects, can remove the need for most

formal competition and is compatible with intimate customer-supplier co-operation from the

beginning of a project. Such relations have the

most chance of success when a supplier knows

that his immediate customer is too small to

assure corporate survival and that further success

in wider export markets will be needed.

At a time when France is moving towards acceptance of competition as a fundamental procurement method, the U.S. and Britain are exploring

the role that “partnering” can play, especially after

any competitive phase, between the government

and its defense supplier. The U.S. and British

concepts of partnering are being developed using formal documents.9

 The concept involves a

range of relationships, including the provision

Table 1. Constant 1997 US $m

West Europe US Exports to US Balance with

Exports to US West Europe West Europe

1987 1,485 5,215 3,730

1992 898 2,920 2,023

1993 766 3,025 2,259

1994 588 3,025 2,436

1995 522 3,233 2,712

1996 720 3,651 2,931

1997 730 4,276 3,546
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-10

of services through Public-Private Partnerships,

but trust and co-operation are basic themes.

The British and German established preference

for at least qualified competition and the French

tradition of monopoly suppliers in many defense

areas has caused problems with collaborative

projects among these three nations. The emerging MRAV (Multi-Role Armoured Vehicle) was

marked by competing teams from Britain and

Germany having no option but to work with Giat

if they wanted a French partner. They were

reluctant to do so and French interest in the

project diminished. As the most prominent

European collaborative project, Eurofighter is

of interest. Many of its sub-system contracts

were awarded only after competitions among

multi-national consortia with the radar being the

most sensitive. However, since many partner

states had only one company in a field, some

competitions essentially were between British

firms with all consortia having the same Spanish

or Italian partner.

This raises the issue of readiness to use collaborative development and production contracts as

a means of securing value-for-money. In Europe,

Germany has embraced collaboration most

frequently; being motivated by technological and

political, as well as financial reasons. France and

Britain, however, have also been involved with

many collaborative projects. The costs and risks

of national projects have often seemed unacceptable and the UK now expects that collaborative

projects will account for over 40 percent of its

equipment budget within the next decade. This

compares with the standard figure of around 15

percent in the 1980s. To date, the U.S. has not

often felt the need to collaborate thus leading to

some serious disillusionment,10 and only a small

proportion of the Pentagon’s budget is allocated

to international collaboration programs. However, in high cost areas such as missile defense,

even Washington could become tempted in the

future.

In seeking “value for money” and ensuring

appropriate and democratic oversight of the military, democratic governments must decide about

the defense roles most properly filled by military personnel and those best undertaken by civil

servants and even the private sector. There is

clearly no standard practice as regards the role

of civilian as opposed to military officials and

to the degree of “jointery” associated with

defense procurement. In Britain, the definition,

prioritisation and programming of military

requirements is done on a “purple” basis, while

in the U.S., each of the armed services has its

own equipment budget and systems/programming staffs. France is notable for the relative

weakness of its single service equipment staffs

and the strength of the Delegation Generale pour

l’Armements (DGA). The DGA rather than the

service staffs has the major influence over equipment requirements and programming.11 According to Edward Kolodziej, De Gaulle introduced

a strong DGA in 1961 in part to assert his control over an unreliable officer corps that threatened to destabilise his government.12 De Gaulle

also wanted to have a national industrial base

able to develop the armies that his external

politics required, not dependent of any supplier.

However, the French political system has

matured since then and might, therefore, countenance at some point in the future giving to the

professionalised armed forces a bigger say in

the equipment they receive. In broad terms, in

Germany the single service staffs generate

military requirements while a civilian administrative element of the Defence Ministry, the

BWB, procures the equipment involved. The

BWB, however, can change requirements for

cost or scheduling reasons.

Although the system in the UK is changing under

the Smart Procurement Initiative, the British

system still in place at the end of 1998 gave most

power over finance to civil servants who had

the final say in how equipment funds would be

used. While the UK central customer structure
Part 5 A Comparison of the Acquisition Systems

5-11

has not been settled, it is clear that the government is trying to better integrate the civil service and the military with regard to the setting

and funding of requirements. Again, there is a

contrast with the U.S. where the services have

considerable control over the use of their

funding.

In the U.S., the services keep much of the

responsibility for generation and procurement

of requirements, and have their own contracting organisations. Such organisations, of course,

make extensive use of civilian labour and are

closely regulated by (mountains of) government

law and regulation.13 There is however a

centralised approval body for major projects, and

significant central players in the United States

direct acquisition policy.14 On the other hand,

Britain, France and Germany have opted for a

central procurement body as a specialist pur-chasing body for the armed forces. Military officers

are posted to these procurement bodies for

short (two-three year) tours, but the procurement bodies remain dominated by civilians.

In comparing the organisational structure and

approaches of the four nations for acquiring

military equipment one notes a significant

difference. The U.S. is highly decentralised both

organizationally and geographically. In the

United States the military services do the

acquisition. In the United Kingdom, Germany

and France the acquisition organizations are

centralized. In the UK and Germany they are

civilian run organizations located centrally in

Abbey Woods and Koblenz respectively. In

France they are highly civilianized, located in

Paris, but with the senior leadership being

provided by a “fourth” military branch, the

Armament Engineer.

Superficially, the UK Defence Procurement

Agency, the French Delegation Generale pour

l’Armement and the German Bundesamt für

Wehrtechnik und Beschaffung (BWB) may

appear to undertake similar tasks but they do so

in a very different spirit. The DGA has traditionally seen itself as responsible for French

economic and technological health as well as

for defense procurement. It has had a co-operative relationship with its main suppliers, many

state-owned because of the political view to

preserve independence. In addition, DGA personnel have, in the past, taken positions with

industry as part of their career progression and

then returned to the DGA. With DGA reform,

privatisation of industry, and more use of competition in procurement, these practices could

change. The BWB is part of a German defense

machine marked by a strong bureaucratic

tradition and not known for rapid decision making.15 It is also required to maintain distance between itself and the armed forces. The British

Defence Procurement Agency (DPA), which was

formed from the Procurement Executive (PE)

in April 1999, is being pressed towards adopting a commercial approach to conducting business. Project leaders, for instance, have considerable freedom to select the staff who will work

for them. There is little in the DPA structure to

suggest a preference to UK or European suppliers or indicate that the DPA has any responsibility for British industrial health.16 Indeed it is

not clear which section in the UK MOD has an

accepted responsibility for promoting the

defense industrial ends laid out in government

policy.17

Certainly, the use of Integrated Project Teams,

bringing together all the government functions

(finance, contracts, engineering, project management etc) involved in acquisition, is most

advanced in the U.S. The use of IPTs is also

being expanded in the UK where the central

customer, industry, and the support organisation

for new equipment are becoming involved in

IPTs. In the U.S. (and in French project teams),

there is a readiness to use layers of teams concerned with the same project,18 although this is

not encouraged in the UK. In Germany, teams
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-12

involving the military, the BWB and industry

would not be acceptable because of sensitivity

to close military-industry ties, although industry and support branches of the armed service

involved are linked to the BWB through Working Groups from the Definition Phase of a

project.

A related contrast, is between the U.S. systems

in which, with equipment being procured

through the individual services, there is a relatively seamless process, i.e., the organization

buying the equipment also has responsibility for

its acceptance and support once in service. In

France, the DGA has a similar responsibility for

all life use costs and for purchasing of the initial

equipment as well as logistics support to include

maintenance and spares for equipment. In the

UK, there is a different, albeit changing arrangement. Formerly, the Procurement Executive

procured new equipment which, once established in service, became the responsibility of

the Principal Administration Officers (PAOs),

i.e., the heads of support in the relevant armed

force. For instance, the Army Quartermaster

General took over land equipment as it came

into service. This led to a perception that the PE

often neglected the in-service or whole-life costs

of equipment during the new procurement phase

because support was not a PE financial concern.

Under the 1998 Strategic Defence Review, the

support heads in the individual armed forces are

being placed under the direction of a central

military Chief of Defence Logistics. His representatives will have a constant presence on

Integrated Project Teams, and project team leadership will pass from a DPA to a Defence

Logistics Organisation person as equipment

comes into service. Thus, there is a logic that

predicts the eventual merger of the DPA and

DLO into a single acquisition and support body.

In Germany, however, the support organisations

remain single service and separate from the

BWB, although the BWB does considerable

contracting on their behalf.19
Part 5 A Comparison of the Acquisition Systems

5-13

Chapter 2

THE IMPACT OF NATIONAL

POLITICAL SYSTEMS

reports, but have no say in the future. In France,

the National Assembly has normally been called

on to approve the armament program laws covering five years that Government has prepared,

but these programs have never been implemented in full. In contrast the U.S. Congress

has developed a culture reflecting the terms of

the constitution in which it sees itself as having

a major say as to what the armed forces should

have.20 Famously, it has regularly made money

available for C-130 purchases that the U.S. Air

Force (USAF) has not requested. From the outside, it is not clear if the USAF actually did not

desire more C-130s—it may have wanted them

but not put them in its own priority list because

it felt Congress would make them available anyway. Responding to the practices of Congress,

the U.S. services present to Congress lists of

items they would like to have if more money

were made available. There are many suspicions

that U.S. congressional representatives support

some projects more for the consequences for

their electorate’s prosperity and employment

than for the impact on U.S. defense capability.

The phrase pork-barrel politics is often associated with defense projects.

The impact of the legislation on procurement

can be significant. Because of the U.S. constitution and Congress’s reluctance to commit

money for more than one year, the U.S. struggles

to make the reliable long term commitments to

projects that are needed to make companies confident to invest their own money. The short

termism inherent in U.S. acquisition also makes

it hard for Washington to make the multi-year

Overarching the varying approaches as to what

constitutes “value for money” in defense procurement and how to secure it through procurement practices is the broad impact of a country’s

overall political system.

As can be seen from other chapters, acquisition

systems are constrained by their national political systems. The national political system has

structural features whose impact may be rather

apparent, and generates and reflects values

whose impact on defense may be more difficult

to pin down. Structural features can be readily

addressed.

It is of clear importance that the constitutions in

the U.S., Germany, and, to a lesser extent, France

have a greater impact on defense than in the UK,

where the constitution is not even written. The

two-year formal limit on the future preparation of armed forces found in the U.S. contrasts

with the UK, where a practice of planning overall defense spending for a four-year period and

equipment spending for ten years is being

introduced.

It is striking that, in the U.S. and Germany, the

legislature approves not only the defense budget in its entirety but also individual projects in

it. In the UK and France, the legislation can only

approve or reject the government’s overall budget and in the UK annual spending, planned or

actual, on individual projects is kept hidden. The

House of Commons Defence Committee and the

National Audit Office investigate past procurement policy and practice, publishing valuable
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-14

commitment to projects needed for collaboration projects to proceed. The German Bundestag

can also disrupt the wishes of the Ministry of

Defense, and there have been many occasions

when the Eurofighter has had a difficult passage. But generally, once the German parliament

has approved a project, including a collaborative project, it then allows it to proceed provided

it does not veer drastically off cost and time

schedules.21

If defense procurement is seen as involving a

chain of customer-supplier relations, as is increasingly the case in the UK, different questions arise about whom should be thought of as

the final customer. A right of the legislature to

approve all projects implies that the people of a

state, through their elected representatives, are

the ultimate customer for military equipment.

In France, however, the DGA, which answers

directly to the Minister of Defence, sees itself

serving the Ministry and has often been seen as

regulating the military of the day. In the UK,

there is no question of Parliament being seen as

the final customer, but there is a debate about

the extent to which the uniformed military

should have that status.

While legislatives might be seen as particularly

sensitive to the employment and technology

generation consequences of defense and spending, the absence of Parliament control over

industrial projects does not mean that governments

as a whole ignore such things as technological

spin off from defense. In the case of Britain and

France, it should not be thought that procurement is depoliticised by the absence of much

parliamentary involvement. In both cases, the

employment and technology gain dimensions are

taken into account in procurement decisions.

Indeed, French procurement choices often have

seemed more driven by expected domestic

economic consequences, including foreign

exchange earnings from export sales, rather than

by military capability involved. One notable

scholar of French defense observed in 1999,

“France still sees armaments policy as closely

tied to social policy. It is basically about jobs.”22

In Britain, since the mid-1980s, there has been

greater governmental interest in acquiring equipment that provided best “value for money”

specifically in terms of the UK armed forces.

However, political leaders clearly enjoy

announcing defense orders for UK business and

receiving the welcome for such orders that are

heard in Parliament. Occasionally, service preferences are over-ridden, as in the 1990s when

the British Army was forced to accept the

Challenger 2 tank rather than its U.S. or German competition, and the RAF was provided

with a mix of Chinook and EH.101 transport

helicopters rather than the Chinook-only fleet

that the service preferred. In each case, the

government was motivated by jobs, technology

and defense industrial capability factors.
Part 5 A Comparison of the Acquisition Systems

5-15

Chapter 3

CONCLUSION

relations, based on two ideal type positions in

each area. The “effective buyer” recognises that

“both parties to an agreement need a successful

outcome” and seeks “to understand the factors

which make the outcome a success for the supplier”. The “resentful buyer” assumes “that the

supplier’s sole aim is exploitation.” Such a buyer

sees the supplier as having no interest in building a “long term trusting relationship.” This

behaviour ultimately produces the result the

buyer seeks to guard against. On the other side,

the “proactive supplier” focuses “on the success

of the customer, based on the belief that the

satisfied customer will come back for more.”

This sort of supplier is looking to build a longterm relationship. In contrast, the “hard-nosed

supplier” ensures “that every variation to the

contract results in a cost increase.” These

attitudes create the resentful buyer. The outcomes suggested by the different relationship

combination are in Figure A.23

Given the reduced number of prime contractors

in many defense areas, and given that, once the

number of competitors falls to two the government must often spread awards to keep two companies in business, it seem likely that more use

of partnering techniques and changed attitudes

are needed to secure “value for money.” Customers probably need to devote more effort to

vendor rating activities, checking their suppliers’ performance across a range of dimensions

in comparison with that of rival or comparable

organisations. This should prevent preferred

supplies becoming complacent.

The third reason for comparison was to gain

insight into collaborative possibilities. Many

Clearly the four states analysed in this work,

despite their common status as liberal democracies based on market economies, approach

defense acquisition in different ways. To return

briefly to the three reasons for attempting comparisons noted at the beginning of this chapter,

it is apparent that the U.S. and French systems

are less disposed to consider foreign equipment

for purchase than are Germany and the UK.

Anyone seeking insight as to how best to sell in

these defense markets must recognise this

fundamental factor, which may, however, be

evolving. The author of the U.S. chapter here

emphasises the increasing openness of the U.S.

market to external competition. France has made

major purchases from the U.S. in the form of

AWACs and E2C aircraft.

The second reason to attempt comparison was

to seek out best practice. Across the four states,

there is public emphasis on the utility of competition as a means of securing “value for

money.” However, there is also explicit recognition in the UK and the U.S. that partner

relationships, involving trust and co-operative

company-government relationships, and teams

involving suppliers and customers, should play

an important role in defense procurement. There

is no consensus or easy formula regarding the

optimum balance between competition and a

close relationship with industry in different areas

of defense procurement.

Effective partnering needs to be seen as a

dynamic process in which both supplier and

customer develop supportive attitudes. David

Wootton, an UK consultant, has characterised

four combinations of supplier customer
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-16

European states have long recognised collaboration as the best way forward in many areas.

The U.S. is only tentatively and cautiously

moving towards this conclusion.24 Within

collaboration, juste retour within a single project

is formally accepted by the OCCAR states as a

costly and damaging principle in European

collaborative projects. Therefore, OCCAR states

are looking at the possibilities of calculating juste

retour on a global basis, spread over many

projects. In cases of transatlantic projects, which

are much rarer, European states seem likely to

press for their full share of work in order to

minimise the inevitable domination of most such

projects by the US.

Clearly, contrasting concepts of “value for

money” in defense equipment; differing procurement emphasis regarding the roles of competition and preferred suppliers and the place of

state-directed as opposed to essentially private

companies; and the variety of political systems

overseeing defense procurement, all make equipment collaboration among democratic members

of a close alliance often difficult. On many occasions, Europeans have wanted, even needed,

to collaborate on development badly enough that

they overcame the obstacles outlined above. The

U.S. has rarely concluded that collaboration is

worthwhile, but often has had an interest in principle.

Looking forward, if the four IDEA nations are

to collaborate in future projects, they need to be

ready for the compromises involved. These

involve, inter alia, a readiness to make multiyear commitments whose importance is understood by Congress, and greater flexibility on

technology transfer and exports. There needs to

be recognition among all the American stakeholders that collaboration gives access to a blend

of the technology, capital and markets of others,

and that these benefits involve some concessions

at home. Once the costs and benefits of collaboration have been weighed and the gains seen to

outweigh the costs, differences in procurement

systems can be overcome. Congress could keep

its powers of annual review of individual projects

provided it recognized that American credibility as a collaboration partner depends on projects, which stay on course with time, cost and

performance parameters that need to be left to

Figure A. Supplier and Customer Combinations

Resentful

Customer

Effective

Customer

Customer gets poor value

for money

Supplier gets poor reputation

Proactive Supplier Hard-Nosed Supplier

Time and money wasted

by both parties

Maximum benefit

to both parties

Supplier demotivated

Low quality for customer
Part 5 A Comparison of the Acquisition Systems

5-17

proceed. Not surprisingly given that Europeans

have been collaborating for more than 30 years,

European collaboration should take more

advanced forms, with OCCAR or a designated

lead state taking a central role.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-18

ENDNOTES

10. See a German MoD Report criticising the

progress of collaboration with the US and

America’s readiness to buy foreign equipment, “Germany slams US collaboration,”

Janes’ Defence Weekly, 18 March 1999.

11. Congress of the United States Office of Technology Assessment Background Paper, Lessons in Restructuring Defense Industry: The

French Experience, Washington DC,

USGPO, 1992, pp. 10-16.

12. E.A.Kolodziej, Making and Marketing

Arms: the French Experience and its implications for the international system,

Princeton N.J., Princeton University Press,

1987, p. 243.

13. See Chapter 4, p. 8.

14. See Chapter 4, p. 22.

15. C.Kelleher & C.Fisher, “Germany” in

D.J.Murray & P.R.Viotti (eds) op.cit., p. 175.

16. Preview May 1999, p. 16.

17. Preview May 1999, p. 16.

18. See Chapter 4, p. 35.

19. 2.14, 2.16.

20. See Chapter 4, p. 11.

21. See Chapter 2, p. 5.

22. Jolyon Howorth, speaking at the International Academic Congress “NATO – the first

50 years,” Brussels and Bonn, 19-22 May

1999.

1. Individuals wishing to quote this chapter pls.

contact Professor Trevor Taylor, RMCS.

2. Defence Open Government Document 83/

01, Value for Money in Defence Procurement, London, Ministry of Defence, 1983.

3. David Yost, “France” in D.J.Murray &

P.R.Viotti (Eds), The Defense Policies of

Nations: a comparative study, Baltimore &

London, Johns Hopkins University Press,

3rd edition, 1994, pp. 239-40 & 257.

4. Office of Technology Assessment, Congress

of the United States, Lessons in Industrial

Restructuring: the French Experience,

Washington DC, US GPO, 1992, p. 16.

5. Germany also favours particular sorts of

business with defense contracts.

6. International Institute for Strategic Studies,

The Military Balance, 1998-9, London,

Oxford University Press 1998, p. 271.

7. Richard F Grimmett, Conventional Arms

Transfers to Developing Nations, 1990-97,

Washington DC Congressional Research

Service, 31.07.99.

8. International Institute for Strategic Studies,

The Military Balance, 1998-9, London,

Oxford University Press 1998, p. 270.

9. The Confederation of British Industry and

the UK Ministry of Defence, Partnering

Arrangements Between the Ministry of Defence and its Suppliers, October 1998, available from the Defence Procurement Agency

and the CBI.
Part 5 A Comparison of the Acquisition Systems

5-19

23. R. Wootton “Supplying: The Right Methods,”

Project, June 99, pp. 25-26.

24. See Chapter 4, p. 44.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

5-20
Appendix

A-1

APPENDIX
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

A-2
Appendix

A-3

Appendix A

ARMED FORCES OF

THE FOUR IDEA NATIONSa

United States Germany

Army: 495,000 Army: 239,950

Navy: 426,700 Navy: 27,760

Air Force: 388,200 Air Force: 76,900

Marines: 173,900 Total: 347,100

Coast Guard: 37,300 Civilians: 143,500

Total: 1,483,800

Reserves: 1,880,600

Civilians: 790,000

Defense Budget (1997): $265.8B, Defense Budget (1997): $33.6B,

3.4% of GDP 2.0% of GNP

United Kingdom France

Army: 112,200 Army: 219,900

Navy: 46,000 Navy: 63,300

Air Force: 56,700 Air Force: 83,420

Total: 214,900 Total: 380,820

Civilians: 124,900 Civilians: 32,276

Defense Budget (1997): $33.2B, Defense Budget (1997): $37.2B,

3.8% of GNP, 3.4% of GNP

39% equipment

a

 Worldwide Directory of Defense Authorities - Mar 98
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

A-4

Appendix B

LIST OF ACQUISITION AND

RELATED ORGANIZATIONS

FRANCE

Delegation General for Armaments (Delegation General pour l’Armament (DGA))

Center for Higher Studies of Armament (Centre des Hautes Etudes de l’Armement (CHEAr)

Direction Des Centres D’Expertise Et D’Essais (DCE)

Flight Tests:

• Centre d’ Essais en Vol de Bretigny (CEV Bretigny)

• Centre d’ Essais en Vol d’Istres (CEV Istres)

• Centre d’ Essais en Vol de Cazaux (CEV Cazaux)

• Centre Aéroporté de Toulouse (CAP)

Missile Testing:

• Centre d’ Essais des Landes (CEL Biscarosse)

• Centre d’ Essais de la Méditerranée (CEM Toulon)

• Groupe Naval d’ Essais et de Mesures (GNEM Brest)

Airframe, equipment and propulsion testing

• Centre d’ Essais des Propulseurs (CEPr Saclay)

• Centre d’ Achèvement et d’Essais des Propulseurs et Engins (CAEPE Saint-Médard en

Jalles)

• Centre d’ Essais Aéronautique de Toulouse (CEAT Toulouse)

Ground systems pyrotechnics and protection trials

• Centre d’ Etudes du Bouchet (CEB Bouchet)

• Centre d’ Etudes de Gramat (CEG Gramat)

• Centre de Recherches et d’Etudes d’Arcueil (CREA Arcueil)

• Groupe d’ Etudes et de Recherches Balistiques Armes et Munitions (GERBAM Plouhinec)

• Etablissement Technique de Bourges (ETBS )

• Etablissement Technique d’ Angers (ETAS)
Appendix

A-5

Naval systems and common technology

• Bassin d’ Essais des Carènes (BASSIN Val de Reuil)

• Centre d’ Electronique de l’ Armement (CELAR Paris et Rennes)

• Centre Technique des Moyens d’ Essais (CTME Arcueil)

• Groupe d’ Etudes sous-marines de l’Atlantique (GESMA Brest)

• Centre Technique des Systèmes Navals (CTSN Toulon)

• Laboratoire de Recherches Balistiques et Aérodynamiques (LRBA Vernon)

Service De La Maintenance Aeronautique (SMA)

Trois Ateliers Industriels de l’Aéronautique

• de Bordeaux (AIA Bordeaux)

• de Clermont-Ferrand (AIA Clermont-Ferrand)

• de Cuers-Pierrefeu (AIA Cuers-Pierrefeu)

Direction Des Construction Navales (DCN)

DCN Cherbourg

• DCN Brest • DCN Ruelle

• DCN Lorient • DCN Toulon

• DCN Indret • DCN Papette

DCN Ingénierie

• Paris • Toulon

• Cherbourg • St. Tropes

GERMANY

Federal Ministry for Defense (Bundesministerium der Verteidigung)

State Secretary for Armaments

Directorate General of Armaments (NAD)

Federal Office for Defense Technology and Procurement (Bundesamt fuer Wehrtechnik und

Beschaffung (BWB) )

Federal Academy of Defence Administration and Military Technology (Bundesakadamie fur

Wehrverwaltung und Wehrtechnik (BAkWVT)
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UNITED KINGDOM

Minister of State for Defense Procurement

Defense Procurement Agency (former Procurement Executive)

Defense Evaluation and Research Agency (DERA)

Royal Military College of Science, Shrivenham

UNITED STATES

DoD Acquisition Organizations

Under Secretary of Defense (Acquisition and Technology)

Army:

Assistant Secretary of the Army (Research, Development and Acquisition)

Army Material Command

Army Program Executive Officers/Direct Reporting Program Managers

Navy:

Assistant Secretary of the Navy (Research, Development and Acquisition)

Naval Sea Systems Command (NAVSEA)

Naval Air Systems Command (NAVAIR)

Naval Supply Systems Command (NAVSUP)

Space and Naval Warfare systems Command (SPAWAR)

Office of the Chief of Naval Research (ONR)

Navy Program Executive Officers/Direct Reporting Program Managers

USMC Systems Command

Air Force:

Assistant Secretary of the Air Force (Acquisition)

Air Force Material Command

Air Force Program Executive Officers

Defense Logistics Agency (DLA)

Ballistic Missile Defense Organization (BMDO)

Defense Systems Management College

Special Operations Command
Appendix

A-7

DOD ACQUISITION ORGANIZATIONAL FUNCTIONS

Office of the Undersecretary of Defense for Acquisition and Technology

Principal Deputy USD (A&T)

Second in command with responsibility for the following offices besides oversight of Defense

Logistics Agency:

Director of Defense Procurement (DDP)

Sets procurement policy for the department covering areas such as, contract

administration, cost, pricing, finance, and foreign contracting.

Director, Systems Acquisition

Responsible for analyzing program status, review of major programs progress and earned

value management policies.

Deputy USD, International Programs

Establishes policies for economic reinvestment, dual use technology programs,

international cooperation, and Defense Export Loan Guarantees.

Deputy USD, Logistics

Sets logistic, maintenance, and transportation policy and provides oversight, and technical

development of logistics systems.

Deputy USD, Acquisition Reform

Responsible for implementation of acquisition reform within the department and

acquisition education through the Defense Acquisition University.

Deputy USD, Environmental Security

Sets policy and provides oversight of defense acquisition environmental issues to include

technology development, cleanup and pollution prevention.

Deputy USD Industrial Affairs and Installations

Responsible for the defense infrastructure issues.

Director Acquisition Resources and Analysis

Responsible for legislative issues, and planning, programming and budgeting for USD

(A&T).

Director, Defense Research and Engineering (DDR&E)

Oversees the Science and Technology Program and nuclear, chemical and biological matters.

DDR&E has direct line authority over the Defense Advanced Research Project Agency (DARPA).

Director Strategic and Tactical Systems

Technical reviews, evaluation, treaty compliance and oversight of acquisition programs

for missile defense, tactical and strategic aircraft, tactical land and naval systems, munitions, electronic warfare programs, and deep strike systems.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Director, Test, Systems Engineering and Evaluation

Responsible for ensuring the effective integration of all engineering disciplines into the

system acquisition process, testing and the Foreign Comparative Test Program.

Deputy USD, Advanced Systems and Concepts

Oversight and management of the Advance Concept Technology Demonstration (ACTDs)

efforts.

Deputy USD Science and Technology

Responsible for DoD science and technology planning to include international science

and technology programs.

Office of the Assistant Secretary of the Army (Acquisition, Logistics and Technology)

Deputy for Logistics

Sets supply, maintenance, and transportation policy and provides oversight and technical

development of logistics systems.

Deputy Assistant Secretary Army Research and Technology

Formulates Army-wide technology-based-strategy, policy, guidance and planning, and establishes

and validates the Army’s technology-based-priorities throughout the PPBES.

Deputy Assistant Secretary for Procurement

Provides management and oversight of all Army procurement functions and organizations,

acquisition reform, and the industrial base.

Deputy Assistant Secretary for Plans, Programs and Policy

Develops the Army’s acquisition policy and procedures and insures that Congressionally

mandated laws and DoD policy are appropriately promulgated in Army regulations. Also

responsible for formulating the Army’s acquisition, logistics and technology long range plans

and budgets.

Deputy Assistant Secretary for Chemical Demilitarization

Oversees the U.S. chemical weapon destruction program.

Deputy for Systems Management and Horizontal Technology Integration

Responsible for executive program management and implementation of acquisition policy for

all Army ACAT I-IV programs. Serves as direct link between the Army SAE and PEOs (ACAT

I &II). Also serves as Army lead for inserting new technology into existing programs and

technical and programmatic guidance for Army international cooperative materiel programs.

Director for Assessment and Evaluation

Provides independent management oversight, technical advice, policy guidance, vulnerability

assessment and reporting related to the Army’s major acquisition programs. Oversees the

administrative responsibilities associated with decision reviews of Major Defense Acquisition

Programs.
Appendix

A-9

Deputy for Combat Services Support

Responsible for oversight and management of combat services.

Deputy for Ammunition

Responsible for executive management and implementation of DoD ammunition programs to

include missiles, bombs, etc.

Deputy for Medical Systems

Responsible for executive management and implementation of Army medical systems programs

for Army hospitals, etc.

Office of the Assistant Secretary of the Navy (Research, Development and Acquisition)

Deputy Assistant Secretary Navy (DASN) Ship Programs

Monitors ships programs managed by Naval Sea Systems Command and the PEOs for Ship

Defense and Submarines and DRPM s for AEGIS and Strategic Systems Programs. Analyzes

shipbuilding industry capability and capacity.

DASN Mine/Undersea Warfare

Monitors technology and business opportunities and provide program and policy guidance for

mine and undersea warfare programs.

DASN Air Programs

Monitors PEO and Naval Air Systems Command programs for aircraft, anti-submarine warfare,

cruise missiles, unmanned aerial vehicles and programs. Analyzes the aircraft industry for

capability for production and repair of aircraft.

DASN C4I/EW/Space Programs

Monitors PEO, Space and Naval Warfare Systems Command’s Communications and Sensors

programs. Serves as the Navy Chief Information Officer.

DASN Expeditionary Force Programs

Monitors Marine Corps Systems Command and the DRPM for Advanced Amphibious Assault

program(s).

DASN Theater Missile Defense

Monitors Navy PEO and Systems Command programs related to theater missile defense.

DASN Planning, Programming & Resources

Performs long range ALT planning, legislative liaison, manages the management information

system and works budging (PPBS) issues.

Chief of Naval Research (CNR)

CNR provides policy, oversight and management of the Navy’s science and technology program.

He has direct line authority over the Office of Naval Research, Office of Naval Technology and

Office of Advanced Technology Transition.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Deputy Acquisition and Business Management

Responsibilities include setting acquisition policy, procurement, ethics, reliability, manufacturing,

and value engineering.

Director International Programs

Responsible for cooperative research and development, foreign military sales, technology transfer,

export control, security assistance, foreign comparative testing, data exchange, and other

international matters.

Director Acquisition Career Management

Responsible for the management of the accession, education, training and career development

of the civilian and military members of the acquisition workforce. Can be described as the

career manager for all acquisition workforce members.

Acquisition Reform Executive

The Acquisition Reform Office facilitates implementation of the department’s acquisition reform

efforts to include changing business process. They also have responsibility for reduction of

total ownership cost, cycle time, and the Navy’s Specifications and Standards Program.

Office of the Assistant Secretary of the Air Force (Acquisition)

Deputy Assistant Secretary Contacting

Plans, develops, and implements Air Force-wide contracting policies and procedures. Oversight

of worldwide Air Force contracting field activities.

Deputy Assistant Secretary Management Policy and Program Integration

Responsible for budgeting, programming, acquisition reform, contractor advisory service,

federally funded research and development centers, acquisition pollution prevention, workforce

education, training and development. Develops acquisition policy. Integrates all programs

individually managed by other SAF/AQ Directorates to achieve the best acquisition program

mix. Ensures acquisition programs reflect requirements needed to support the Reserve

Component.

Deputy Assistant Secretary Science, Technology and Engineering

Develops policy for and oversees the Air Force’s Science and Technology program. Serves as

the chief engineer for the Air Force with responsibility for manufacturing management, software

management, standardization, non-developmental items advocacy, and military specifications

and standards.

Mission Area Director (MAD) Global Power

Plans, programs, oversees and provides program direction for tactical systems such as fighter

aircraft and combat weapons. The individuals specifically assigned to each MAD program to

work the issues regarding a program are referred to as Program Element Monitors (PEMs).
Appendix

A-11

Mission Area Director (MAD) Space & Nuclear Deterrence

Plans, programs, oversees and provides program direction for surveillance, communications,

navigation and weather satellites, space launch systems, information warfare capabilities, groundbased strategic systems.

Mission Area Director (MAD) Global Reach

Plans, programs, oversees and provides program direction for airlift, training and special

operations aircraft programs.

Mission Area Director (MAD) Information Dominance

Plans, programs, oversees and provides program direction for command and control, information

systems, airborne command and control and radar systems, reconnaissance systems, and systems

integration.
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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Appendix C

DOD DEPOTS/GOVERNMENT-OWNED,

GOVERNMENT-OPERATED (GOGOS)/

GOVERNMENT-OWNED,

CONTRACTOR-OPERATED (GOCOS)

ARMY GOGOs/GOCOs

Arsenals/Depots/Ammunition Plants (GOGOs)

Anniston Army Depot, Anniston, AL

Blue Grass Army Depot, Richmond, KY

Corpus Christi Army Depot, Corpus Christi,

TX

Crane Army Ammunition Activity, Crane, IN

Letterkenny Army Depot, Chambersburg, PA

McAlester Army Ammunition Plant,

McAlester, OK

Pine Bluff Arsenal, Pine Bluff, AR

Red River Army Depot, Texarkana, TX

Redstone Arsenal, Redstone Arsenal, AL

Sierra Army Depot, Herlong, CA

Tobyhanna Army Depot, Tobyhanna, PA

Tooele Army Depot, Tooele, UT

Savanna Depot Activity, Savanna, IL

(BRAC 01 Closure)

Seneca Depot Activity, Romulus, NY

(BRAC 01 Closure)

Watervliet Arsenal, Watervliet, NY

Picatinny Arsenal, Dover, NJ

Ft Wingate Depot Activity, Gallup, NM

(BRAC 89 Closure)

Pueblo Deport Activity, Pueblo, CO

Umatilla Depot Activity, Umatilla, OR

Rock Island Arsenal, Rock Island, IL

Hawthorne Depot, Hawthorne, NV

Holston Army Ammunition Plant, Kingsport,

TN

Iowa Army Ammunition Plant, Middletown, IA

Lake City Army Ammunition Plant,

Independence, MO

ARMY Government-Owned Contractor-Operated (GOCOs) Active Facilities

Lone Star Army Ammunition Plant,

Texarkana, TX

Milan Army Ammunition Plant, Milan, TN

Radford Army Ammunition Plant, Radford, VA

Lima Army Tank Plant, Lima, OH
Appendix

A-13

ARMY Government-Owned Contractor-Operated (GOCOs) Inactive Facilities

Indiana Army Ammunition Plant,

Charlestown, IN (excess)

Volunteer Army Ammunition Plant,

Chattanooga, TN (excess)

Scranton Army Ammunition Plant, Scranton,

PA

Kansas Army Ammunition Plant, Parsons, KS

(excess)

Longhorn Army Ammunition Plant, Marshall,

TX (excess)

Joliet Army Ammunition Plant, Joliet, IL

(excess)

Cornhusker Army Ammunition Plant, Grand

Island, NE (excess)

Mississippi Army Ammunition Plant, Stennis

Space Center, MS

Sunflower Army Ammunition Plant, DeSoto,

KS (excess)

Riverbank Army Ammunition Plant,

Riverbank, CA

Badger Army Ammunition Plant, Baraboo,

WI (excess)

Ravenna Army Ammunition Plant, Ravenna,

OH (excess)

 Twin Cities Army Ammunition Plant, Minneapolis, MN (excess)

AIR FORCE DEPOTS/GOCOs

Depots

San Antonio Air Logistics Center, TX (Scheduled to close in 2001)

Sacramento Air Logistics Center, CA (Scheduled to close in 2001)

Warner-Robbins Air Logistics Center, GA

Oklahoma City Air Logistics Center, OK

Ogden Air Logistics Center, UT

Air Force GOCOs

Plant 4, Lockheed Martin, Ft. Worth, TX

Plant 6, Lockheed Martin, Marietta, GA

Plant 44, Raytheon, Tucson, AZ

Plant PJKS, Lockheed Martin, Denver CO

Plant 42, Site 1 Boeing, Palmdale, CA

Plant 3, City of Tulsa, OK (in process of transfer)

Plant 59, Johnson City, NY (in process of transfer)
A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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NAVY DEPOTS/SHIPYARDS/WEAPONS CENTERS

Naval Shipyards (Government-Owned, Government-Operated (GOGOs)

Puget Sound Naval Shipyard, Bremerton, WA

Pearl Harbor Naval Shipyard, Pearl Harbor, HI

Portsmouth Naval Shipyard, Portsmouth, NH

Norfolk Naval Shipyard, Norfolk, VA

Naval Ordnance Weapons Centers (GOGOs)

Naval Ordnance Weapons Center, Seal Beach, CA

Naval Ordnance Weapons Center, Yorktown, VA

Naval Ordnance Weapons Center, Earle, NJ

Naval Ordnance Weapons Center, Indian Head, MD

Naval Ordnance Weapons Center, Concord, CA

Navy Inventory Control Points (GOGOs)

Mechanicsberg, PA

Philadelphia, PA

Naval Aviation Depots (GOGOs)

Cherry Point, NC

Jacksonville, FL

North Island, CA

Naval Aviation Weapons Centers (GOGOs)

China Lake, CA

Orlando, FL

Lake Hurst, NJ

Patuxant River, MD

Supervisors of Shipbuilding (GOGOs)

Pearl Harbor, HI

Bath, ME

Pascagola, MI

Jacksonville, FL

New Orleans, LA

Newport News, VA

Puget Sound, WA

San Diego, CA
Appendix

A-15

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UNITED STATES

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A Comparison of the Defense Acquisition Systems of France, United Kingdom, Germany and the United States

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GERMANY

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Appendix

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UNITED KINGDOM

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