PARIS --- As negotiations between governments and industry on the A400M enter their final phase, the role of the program’s executive agency remains one of its most mysterious aspects.
While Airbus and EADS have acknowledged their failures, and reorganized their corporate structures and management not once but twice, partner governments have made no comparable admission that their program management structure failed just as grievously to keep the program on track.
Most surprising in this respect is the low profile recently assumed by the European Organisation for Joint Armament Cooperation (OCCAR), the Bonn-based agency that acts as the program’s executive agent on behalf of the seven partner governments. This contrasts with the higher profile it adopted earlier in the program.
When the A400M program was launched OCCAR’s then director, Dr Klaus von Sperber, signed the 20.3 billion euro contract with Airbus and, to underscore the agency’s leading role, the signing ceremony was held at its headquarters in Bonn.
OCCAR’s leadership role on the A400M was clear from the beginning. In a statement issued May 22, 2003 the German Ministry of Defence said that “The European arms agency OCCAR will sign the international industrial contract with Airbus Military on behalf of the partner nations, and will assume management of the program.”
Three months later, on Aug. 29, 2003 Airbus Military met its first contractual milestone by delivering the A400M Quality Plan to OCCAR. Shortly afterwards, on Oct. 15, Airbus Military issued a statement saying that “The high standard of the work presented for the A400M was such that OCCAR had no difficulty in accepting it within only six weeks.”
OCCAR was still visibly in the driver’s seat when the Intermediate Pressure Compressor of the TP400-D6 turboprop developed for the A400M made its first bench run in Munich on Nov. 30, 2004: “The test was witnessed by shareholders of EPI, together with representatives from the Airbus Military Company, OCCAR…and politicians from the partner countries,” Snecma said in a Dec. 1, 2004 press release.
“OCCAR, representing the European customers,” also attended the first test run of the complete TP400-D6 engine on Oct. 28, 2005, according to an Airbus press release, as well as the first complete test of an engine and propeller, on Feb. 28, 2006.
When Airbus undertook a two month-review of the program in mid-2006, its results were tabled in early December 2006 “through presentations to OCCAR and the EADS Board of Directors,” EADS said at the time. This review, it noted, “validated that the A400M program is currently progressing according to the contractually agreed schedule,” although it admitted “significant challenges” in meeting delivery dates. OCCAR did not dissent.
OCCAR then disappeared completely from public view once the A400M’s troubles became public. It refrained from all comment until the aircraft’s first flight in December 2009, and left defense ministers to reply to successive industry statements detailing delays and cost overruns. Its silence is remarkable given its legal role as contract signatory and government executive agent.
Despite its low profile today, it is hard to imagine how OCCAR, which maintains an office housing its A400M Program Division at the Airbus plant in Toulouse, can have failed to realize the program was in trouble.
While it can certainly be argued that civil servants should not speak publicly in place of ministers, this does not absolve them of their responsibility for not having detected the A400M’s troubles, and for not having rung the alarm bell forcefully enough. This, after all, is why OCCAR exists.
And national procurement executives, with whom OCCAR liaised since the program was launched, fared no better.
More worryingly, it is OCCAR that disbursed progress payments to industry, for a total amount of 5.8 billion euros (Corrected--Ed.), using the cash it received from national procurement agencies acting on behalf of partner governments. Given the size of the problems, and the fact that they appeared like a bolt out of the blue, it is hard to imagine that checks were actually carried out on whether the specified work had been done before each milestone payments was made.
While this can diminish neither Airbus’ faults nor its contractual responsibilities, it does raise some questions about the legal standing of the hard-line negotiating positions adopted by Germany and Turkey, both of which are refusing any price increases as a matter of principle.
If OCCAR indeed failed to monitor the program, then partner governments are as responsible as industry for the cost blowout, and cannot entirely avoid the consequences. And the central question remains: where was OCCAR, and what was it doing, when the program hit the skids?