Developing Modern Defence Capabilities: Supply and demand
Business is booming at the NATO Support and Procurement Agency (NSPA) in support of NATO’s acquisition and logistics needs. Anne Paylor reports
The role of the NATO Support and Procurement Agency (NSPA) is expanding both in scope and activity as NATO nations and partners rely increasingly on contracted solutions to meet their military operational logistics requirements. During the recently concluded NATO Agency Reform, three former agencies – the NATO Maintenance and Supply Agency, the Central Europe Pipeline Management Agency and the NATO Airlift Management Agency – were merged to form the NATO Support Agency. “NSPA is now NATO’s principal logistics provider, tasked with assisting NATO nations with common procurement and supply of spare parts, and arranging maintenance and repair services necessary for the support of various weapon and other systems,” explains NSPA General Manager Peter Dohmen.
In April 2015, NATO further assigned the acquisition role to NSPA, enabling whole-system acquisition and consolidating all of NATO’s logistics and procurement support activities under one roof as the NSPA. “Turnover is growing rapidly and all indications are that it will continue to grow,” says Dohmen. “The agency is predominantly customer-funded, operating on a ‘no profit, no loss’ basis. In 2016, 96% of our revenue came directly from member nations who used our services, with just 4% from NATO Security Investment Programme (NSIP) programmes that are eligible for common funding.” In 2016, more than 35,000 contracts for products and services were let using the Agency’s extensive industry source file of more than 10,000 active companies. Those contracts were worth €3.5 billion, a substantial increase from the €1 billion turnover recorded just a decade ago.
Reflecting the activities of the merged agencies, the NSPA is organised into three business segments – the NATO Airlift Management Programme (NAM), the Central Europe Pipeline System (CEPS) programme and Logistics Operations (Log Ops). It has a full-time staff of 1,300 international civilians, based mostly in Capellen, Luxembourg. Capellen is also home to Log Ops, which accounts for almost 80% of NSPA’s overall business. “Log Ops is involved in all phases of the equipment life cycle, from procurement and in-service support through to disposal when equipment is no longer needed. These logistics capabilities and services are provided using multinational legal frameworks, as well as bilateral and multinational agreements that enable the consolidation and centralisation of logistics management functions for NATO, its member nations and partner countries,” Dohmen reveals.
Most support is provided through outsourced contracts awarded through international competitive bidding processes. NSPA also offers an in-house engineering and technical support capability of specific technologies and services, such as optoelectronics, calibration and data management.
A further 50 staff are based in Pápa, Hungary, supporting the NAM fleet of three Boeing C-17 Globemaster aircraft stationed there. These aircraft can operate in less benign environments than their civil counterparts and support NATO’s Strategic Airlift Capability (SAC). A joint international initiative between the 10 NATO SAC Member States, plus Partnership for Peace (PfP) states Finland and Sweden, C-17 flying hours are pre-agreed on an annual basis, with the aircraft available for third-party use via SAC Nation sponsorship. This arrangement enables participating states to collectively own assets that would be prohibitively expensive to purchase individually. NSPA is also enabling a European initiative for air-to-air refuelling and strategic airlift with the acquisition, through the European Organisation for Joint Armament Cooperation (OCCAR), of multi-role tanker/transport (MRTT) Airbus A330-200 aircraft.
A further 35 full-time staff are based at Versailles, France, operating the CEPS, one of the NATO pipeline systems and the only one that is a multinational, integrated cross-border fuel transport and storage system.
The CEPS comprises 5,300 km of pipeline linking civil depots, military and civil airfields, refineries and sea ports. About 70% of the fuel transported through the CEPS is jet fuel, and through its military/commercial business model fuel is supplied to major European airports while retaining a military priority use when required. Diesel and gasoline account for a further 20%.
Fifty staff are based in Taranto, Italy, manning the Southern Operational Centre, where NATO’s deployable headquarters camps are stored and maintained, ready to be deployed in support of NATO operations and exercises.
Although NSPA remains committed to operations in Afghanistan and is also supporting operations in Kosovo, Iraq and Mali, Dohmen says that the focus is shifting more towards Europe. “Geopolitical changes mean there is more emphasis now on the European theatre and deterrence and defence. Agency support to NATO’s Response Force, the Very High Readiness Joint Task Force and enhanced Forward Presence is under way and we expect this activity to continue to grow,” he concludes.
Projecting Stability | ATA special publication for the Brussels Summit 2017
For the occasion of the NATO Special Meeting in May 2017, ATA has published a dedicated monograph where high level policy makers and experts tackle the strategic issues of the summit. This publication was distributed to all the delegations and representatives that were taking part to closed-doors discussions and parallel meetings that took place before and during the Summit.
The publication is available in its entirety here: Projecting Stability | ATA special publication for the Brussels Summit 2017