Defence Procurement - A Minefield for Germany's New Defence Minister? (excerpt)
(Source: Centre for Eastern Studies (OSW); issued March 10, 2014)

By Justyna Gotkowska
Germany's defense procurement establishment is in trouble, writes Justyna Gotkowska. Not only is Ursula von der Leyen burdened with spiraling costs, missed deadlines and technical requirements failures, it also appears that Berlin will not bankroll the country’s defense sector with major new projects anytime soon.

On 20 February, the German Defence Minister Ursula von der Leyen dismissed her secretary of state, Stephane Beemelmans (responsible for defence procurement) as well as the director of the procurement department. These spectacular sackings once again highlighted the problems the German Ministry of Defence has been having with its major defence procurement projects. These concern spiralling costs, delivery delays, and failures to meet technical requirements.

The problems have arisen not only from the mismanagement of the projects, but are also a consequence of the government’s policy in relation to the German arms industry, the realities of European armaments cooperation, and changes in the Bundeswehr’s technical requirements during the projects’ implementation.

The new structures and procedures in defence procurement introduced in 2013 are improving future project management. However, for budgetary reasons new major projects cannot be expected during the government’s current term. Minister von der Leyen will struggle with the consequences and costs of the existing projects; and if a more restrictive policy towards the German defence companies is chosen, she will either have to reckon with the industry campaigning against the ministry, or compensate for such a policy by increasing government support for exports of German armaments and military equipment abroad.

A ‘cleanup’ in the Federal Ministry of Defence

The dismissals took place in connection with von der Leyen’s dissatisfaction at the lack of transparency and the problems in the management of major defence procurement projects. These were introduced to her on 19 February at the meeting of the defence procurement board with secretaries of state and departmental directors. Another reason was Beemelmans’s decision to pay €55 million in compensation in December 2013 to MTU Aero Engines, a German aircraft engines manufacturer, of which neither von der Leyen nor parliament’s budget committee were informed.

The payment was made because the Ministry of Defence cancelled the order for tranche 3b of the 37 Eurofighter multi-role fighters, which were to have used MTU engines. Beemelmans was also burdened by the political responsibility for last year's scandal concerning Germany’s cancelling the Euro Hawk project and its enormous costs. The prospect of new scandals in defence procurement inclined von der Leyen to get rid of Beemelmans and to symbolically open a new chapter in the ministry’s policy; this should be achieved by the external audit of the largest procurement projects which has just been announced.

Beemelmans’s resignation deprived the new minister of the last secretary of state in the Ministry of Defence who had any substantial knowledge in politico-military issues; it is worth noting that the heads of the procurement and defence policy departments were also dismissed. Beemelmans had close ties to the previous defence minister, Thomas de Maizière, who had worked since 2011 on developing and implementing one of the biggest reforms to the Bundeswehr and the ministry in recent years.

The reform concerned reductions in the size and introducing professionalisation; changes in the organisation of the branches of the armed forces, in command structures, in the relocation of units, in training, in adjusting quantities of armaments and military equipment, and in the organisation of the ministry. In the new CDU/CSU-SPD government, Beemelmans oversaw the ministry’s most important departments (including defence policy, procurement and the reform of the Bundeswehr), and had the task of ensuring the continuity of defence policy and the transformation of the Armed Forces for a minister who was new to the office. His departure is not expected to bring major changes in the transformation of the Bundeswehr, as the reforms of structures and processes have now gone too far to be rescinded.

In this area, the new minister will focus on enhancing the attractiveness of the Bundeswehr as an employer in Germany (including financial and social matters, and reconciling military service with the family), as well as the ministry’s communication policy. (end of excerpt)

Click here for the full story, on the International Security Network website.


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