European Union Defence Ministers agreed today to allow non-EU member Norway to participate in the Regime on Defence Procurement, under which governments and industry voluntarily commit to more open cross-border competition for defence equipment contracts.
The decision was taken at a ministerial Steering Board meeting of the European Defence Agency (EDA), to which all EU members except Denmark belong. The EDA administers the Regime and operates the Electronic Bulletin Board (EBB) portal on which contracting opportunities are advertised.
“We are delighted that Norway will be participating in the Regime, which will help our efforts to open the European Defence Equipment Market and further strengthen our Defence Technological and Industrial Base,” said Head of the Agency Javier Solana, who chaired the meeting.
Norway has an Administrative Arrangement for cooperation with the EDA. Although not a member of the EU, it participates in its European Security and Defence Policy (ESDP) in many ways, contributing troops to ESDP operations and forming part of the EU Nordic Battle Group.
“It is a privilege for Norway, as the first country outside the European Union, to be able to participate in the Regime on Defence Procurement and its Code of Conduct, fostering transparent and integrated defence markets,” said Norwegian Defence Minister Anne-Grete Strom-Erichsen.
“By committing ourselves to the level playing field of the Regime, and on the basis of our relatively high defence expenditure and competitive defence industry, I am sure that the development of the European Defence Equipment Market will benefit from our participation,” she added.
The non-legally binding Regime has been in effect since 1 July 2006 and has two main parts: a Code of Conduct for government procurement contracts, which requires equal treatment for companies from all countries subscribing to the regime according to clear and transparent criteria; and a Code of Best Practice in the Supply Chain, under which the defence industry applies the same principles to sub-contracting opportunities. That part of the EBB portal was implemented in March 2007.
The Norwegian Defence and Security Industries Association (FSi), representing the country’s defence industry, has endorsed the Code of Best Practice in the Supply Chain and will work with companies to ensure that it is implemented.
The Steering Board also welcomed a report on the operation of the Regime and noted that the overall assessment was positive. Governments have so far published more than 260 contract opportunities based on open competition, worth more than €10 billion.
Although only in its early stages, the supply chain code had seen 12 different companies posting 30 formal sub-contracting notices on EBB2, and 13 more companies had advertised a further 123 potential opportunities.
The Steering Board asked the Agency to continue monitoring the implementation of the Regime, particularly to see whether high value contracts would be awarded across borders by governments and suggested possible improvements in a number of areas which might lead to an increase in cross-border bidding.
“The decision by Norway to participate in the Regime, following a similar decision by Bulgaria last month, shows the strength of commitment to the concept,” said EDA Chief Executive Alexander Weis. “A cultural change towards transparency and publication for cross-border competition is being achieved.”