The defense wants more suppliers – fears high prices and long delivery times – Anbud365

More suppliers to the Norwegian Armed Forces is a priority task going forward. It is partly about making use of new expertise, especially from small and medium-sized technology companies. In part, the need is connected to the fact that the situation with a small selection of suppliers easily means a significant risk of increased prices and long delivery times. This is evident from the defense plan that the Government recently presented. Long-term strategic industrial cooperation – previous buybacks – is also needed, it says, such agreements can e.g. include subcontracts from Norwegian defense companies, R&D cooperation, technology cooperation and marketing assistance.

It is a goal to establish more long-term strategic government and industry cooperation in connection with major material acquisitions, especially main materials. In addition, more traditional industrial cooperation is to be continued to help secure access to the international defense market for Norwegian industry. This appears from “Prop. 87 S (2023–2024) – The defense promise – for Norway’s security Long-term plan for the defense sector 2025–2036”, which the government recently presented.

Strengthen the Norwegian defense industry

Together with acquisitions from the Norwegian defense industry, industrial cooperation agreements aimed at the prioritized areas of technological competence in the national defense industrial strategy will be a significant contribution to being able to maintain and strengthen Norwegian defense industry’s competence and capacity, it says. Overall, such collaboration agreements will be able to contribute to creating a further basis for increased production capacity.

For large and complex systems, the industrial base is often a relatively small and transparent group of suppliers with whom the defense sector has an established dialogue. In many cases, it makes procurement easier to handle. A market with few players also entails a significant risk of increased prices and can lead to long delivery times. Cooperation with large suppliers must therefore be further developed, but the defense sector must also actively look for opportunities to remedy the challenges a limited number of suppliers can lead to.

Commercial actors

For less complex systems or within new technological areas, there are often several relevant suppliers. The Government wants the defense sector to make arrangements for such businesses to be considered to a greater extent when the Armed Forces are to acquire new equipment. The goal is for the defense sector to utilize commercial actors on an equal footing with defense-specific suppliers where it helps to reduce procurement costs or delivery time and is in line with current security requirements.

The armed forces need a national supplier industry in some key areas. Developments in security policy also make clear the importance of Norwegian-controlled defense industry. Some areas of technological expertise are prioritized in the defense plan, and they must be included in the assessment in connection with, among other things, decision on procurement from Norwegian suppliers and arrangement of the content of industrial cooperation agreements in connection with procurement from foreign industry.

Small and medium sized

The government will further develop and strengthen the cooperation between the defense sector and small and medium-sized enterprises, both those who are system suppliers and those who are subcontractors. The aim is better utilization of the technology potential in these companies. It is therefore important that Norway has an instrument apparatus, and the government is therefore strengthening R&D cooperation arrangements between the defense sector and industry.

Business actors who do not already cooperate with the defense sector will need support to “prepare” themselves for such cooperation. Being a supplier for defense purposes, or working with technology areas subject to the Security Act, requires a security culture, security-cleared personnel, adapted physical infrastructure and physical premises. The government will take a closer look at how arrangements can be made for more business actors to deliver within defence, security and preparedness.