Nobody is more aware of the problems than [German Defense Minister Ursula] von der Leyen's armaments secretary Katrin Suder, a former McKinsey consultant. On a recent Tuesday afternoon, a pale-faced Suder, struggling to ignore her rising fever, sought to explain some of the problems facing procurement.
The list includes, for example, the fact that the defense budget is the only one in the German government where each expenditure of over 25 million euros must be approved by the Budget Committee in German parliament. This limit has existed since 1981 and has never been adjusted for inflation. A limit of three times that amount would make more sense.
The consequence, though, is that more and more expenditures exceed that limit and significant effort must be expended to push them through parliament, even if they are as politically irrelevant as a mobile crane.
Because of the regulation, an increasing number of purchasing decisions become the subject of political wrangling and experience significant delays -- even though the ministry almost always gets what it wants in the end.
The "annuality" of the budget also presents problems when, for example, large acquisitions are held up and must be delivered in the next year. If, for example, it becomes clear in the fall that a delivery of new A400 military transport planes won't be arriving in November as planned but only a few months later, the budget must be quickly revamped so that the money allotted doesn't go unspent.
During the last two years, Suder and her team have managed -- for the first time in several years -- to avoid having to send money allotted for the Defense Ministry back to the German treasury. But it hasn't been easy, and has been made even more difficult by the fact that a hiring freeze for the procurement office has been in place for 10 years, meaning the agency is short some 1,400 people. It will take years for new workers to be sufficiently trained.
If this situation doesn't change, the risk is significant that the system would collapse were defense spending to be ramped up. That, in turn, would mean that increasing the defense budget to 2 percent of GDP wouldn't be particularly effective. "It can be quite frustrating," Suder says. "Sometimes I feel as though I have been sent into battle with a toothpick." (end of excerpt)
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