French Defense Procurement Agency (DGA) Completes Reform, Attains Savings Goals
By Giovanni de Briganti
PARIS -- Reforms and price-cutting measures adopted since 1996 have allowed the French defense procurement agency, Delegation Generale pour l'Armement, to reduce by 91.8 billion French francs the cost of its 83 largest weapon programs, procurement chief Jean-Yves Helmer said March 30. Another 10 billion francs of savings are planned for 1999, he added.
Presenting DGA's second annual report, Helmer said that when the cost-cutting measures were decided the 83 programs had an estimated total price tag of 541 billion francs, and that he had set the goal of reducing this figure by 103 billion francs, which will be practically achieved by year-end.
Helmer also said that, in 1998, French defense industry received export orders worth 49.6 billion francs, up more than 60 percent over the 1997 figure of 30.2 billion francs. This is the best result since 1985, when export orders reached a record amount of 60.8 billion francs, he said.
Over the past three years, DGA also has substantially improved the effectiveness of its financial management while reducing its operating costs, Helmer said. Payments carried over from one year to the next dropped to 2.3 billion francs in 1998, down from 6.7 billion francs in 1995, and the rate of spending of annual procurement funds had increased from 89.6 percent in 1995 to 96 percent in 1998.
DGA also has reduced its operating costs from 7.4 billion francs to 6.6 billion francs, has shed a total of 6,250 jobs since late 1996 and has introduced new, cost-based management practices. We have successfully completed our revolution," Helmer said.
Dispelling rumors about his imminent departure, which he said regularly circulate every three months with great regularity, Helmer identified three major challenges for DGA : develop a new generation of weapons for the French armed forces ; consolidate European weapons cooperation, and consolidated the restructuring of Europe's defense industry.

On other points, Helmer made the following statements :

- Horizon frigate : A decision was made to select a real industrial prime contractor, and GEC Marconi has been chosen, and industry has been given until late April to propose to the three governments "an industrial organization that meets our requirements in terms of costs, quality and schedule. Industry must work out its organizational problems," Helmer said.
- Tiger attack helicopter : A significant export contract is expected this year or in 2000 at the latest.
- DCN : Sales at the state-owned naval shipyards, Direction des Constructions Navales, will dip to just under 10 billion francs in 2000, but will recover to 12.5 billion francs in 2002 as new French shipbuilding programs (new amphibious transport, 4th ballistic missile submarine, Barracuda nuclear attack submarine) kick in.
- Exports : For the coming years, "we are looking to Europe more than to far-flung areas of the world, and more to medium-size contracts rather than to huge contracts, for our defense exports".

A copy of DGA's annual report for 1998 (in French only) is available on the
French MoD
web site.

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