Italian Ministry of Defense procurement system Major procurement programs

Maj.Gen. Giovanni FANTUZZI Washington DC, 04th September 2013

ComDef 2013

SECURITY

THE BRIEFING IS UNCLASSIFIED

• Overview

• Defense Organisation - SGD/DNA • Defense Acquisition Programs process

• Major Programs

• Conclusions

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AGENDA

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GLOBAL SAFETY

TIME CONSTRAIN FOR SYSTEMS

MODERNIZATION

MODERN AND DEPLOYABLE INSTRUMENT

Economic / financial crisis

Globalization Unpredictability of threats

Removal of sovereignty Multiple generators of instability

SAFETY

SCENARIO

GOVERNMENT

CABINET

DIRECTIVE:

MILITARY

POLICY FOR

THE YEAR

2013

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ARMAMENTS POLICY

Ministry of Economy

and Finance

Ministry of Economic

Development

Ministry of Foreign

Affairs

Product &Tecnology

National Industry

University and

Reserach Centers

Countries, Agencies

and International Org.

Technical

Directorates Industrial Sector

Minister of

Defense Defense Staff

Armed Forces

Staffs

Policy and requirements

Analysis and Assesment

Procurement

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MAIN PLAYERS

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MINISTER

CHOD

Chief AIR Chief SEA

Chief LAND Chief CC

SGD/NAD

5 D.T. 4 D.G.

STAFF OFFICE UNDERSECRETARIES

2 CENTRAL OFFICES

TECHNICAL-OPERATIONAL AREA TECHNICAL-ADMINISTRATIVE AREA

ONLY TECHNICAL-OPERATIONAL

DEFENSE ORGANISATION

SECRETARY GENERAL

OF DEFENCE AND

NATIONAL ARMAMENTS

DIRECTOR

Deputy SG/DNA

III DEPARTMENT INDUSTRIAL POLICY AND

INTERNAT. RELATIONS

IV DEPARTMENT MAJOR ACQUISITION

PROGRAMS

PERSOMIL PREVIMIL

GENIODIFE

TERRARM NAVARM ARMAEREO

Deputy SG

II DEPARTMENT ADMINISTRATION

I DEPARTMENT PERSONNEL

V DEPARTMENT TECHNOLOGICAL

INNOVATION

COMMISERVIZI

TELEDIFE PERSOCIV

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GENERAL SECRETARIAT FOR DEFENSE/DNA

Market research in the international arena

Domestic industry involvement in international programs

Search for economies of scale

Economic returns in the case of exports (Royalty)

Back with technological impact on employment

Raising the professional level of personnel (government and industry)

Addressing industry to seek efficiency and international competitiveness

Involvement in complex programs also for small and medium-sized enterprises (SMEs).

Operational Requirements

Acquistion Program

Growth Country’s System

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PROCUREMENT: MAJOR HIGHLIGHTS

PRAGMATISM, FLEXIBILITY, INTERDISCIPLINARY

PROCUREMENT

DYNAMIC, TIMELY, EFFICIENT

GIP

DzP

Area Joint Staff

Area Procurement

Industry

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PROCUREMENT: ORGANISATIONAL STRUCTURES

Operational

Requirements

Approval Operational

Requirements and

Priorities

ROP

COVIRO: Joint Evaluation

Committee of Operational

Requirements

First technical solutions feasibility

Procurement

COVIRO

CHOD Approval

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GENESIS OF A PROGRAM

EO

Pre-feasibility

ROP ROD

Feasibility/definition

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GIP APPROV

E

DEFENCE GENERAL PLAN (PG-001)

REQUIREMENT PLANNING RESEARCH DEVELOPMENT $ PRODUCTION

SERVICE

SYSTEM LYFE CYCLE (RIF. SMD – L- 001)

GIP DzP DT

TECH

SPEC

ACQUISITION ITER

0

1

2

3

4

5

2012

(4,2 mld €)

2013

(4,9 mld €)

2.5

3.5

1.7

1.4

Mld €

MiSE budget

Defense Budget

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DEFENSE INVESTMENT BUDGET

Personnell

Operation

Investiment

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2008 2009 2010 2011

Data in M€

2012

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59%

17%

24%

67%

13%

20%

66%

12%

22%

66%

10%

24%

71%

11%

18%

2013

24%

67%

9%

TOTAL DEFENSE BUDGET 2008 - 2012

LoI

OCCAR

EDA European

Commission

MULTI / BILATERAL COOPERATION

CNAD

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MULTINATIONAL COOPERATION

Transnational Dimension

acquisition

alliances

joint ventures

Geographical

distribution Capital

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DEFENSE INDUSTRY

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National Defense Industry

Market

only the most competitive

industries, therefore, will

be able to survive

Borders Limited

DEFENSE INDUSTRY ITALY

BOLOGNA

LATINA

NAPOLI

ROMA

LECCO VICENZA

TREVISO

PERUGIA

MILANO

BRINDISI

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ENTERPRISE

CREATIVITY

INNOVATION

SMALL-MEDIUM NATIONAL INDUSTRY

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common objectives, even in the presence of different assumptions and purposes

DEFENSE the best system, timely at the best

economic conditions, to ensure the

country's security, and to be able to

perform the assigned task, in

accordance with international

commitments

INDUSTRY

maximum economic return,

with access

to the internal market and,

above all to the international one

DEFENSE vs INDUSTRY

PROCUREMENT PROGRAMS

Italian Armed Forces Procurement Programmes

≈4.5 Billions €/year

IT-MOD Releasable to SEDENA

Land Programmes

PZH 2000

OTO MELARA – KRAUSS

MAFFEI WEGMANN

VBM “FRECCIA” 8x8

IVECO - OTO MELARA

CONSORTIUM

MLTV “LINCE”

IVECO

NEC FORCE

ITALIA INDUSTRIES OF

FINMECCANICA GROUP

FUTURE SOLDIER

MARCONI SELEX COMM.

LARIMART – GALILEO AVIONICA

BERETTA - SISTEMI COMPOSITI –

AEROSEKUR

MLTV - AMBULANCE

IVECO - OTO MELARA

CONSORTIUM

NEW ARMOURED

VEHICLE “CENTAURO”

IVECO - OTO MELARA

CONSORTIUM

MLRS

THALES IT – CASSIDIAN - KRAUSS

MAFFEI WEGMANN – THALES FR

Naval Programmes

BLACK SHARK

WASS

FREMM

ORIZZONTE S.N.

DCNS (FRA)

U212A

FINCANTIERI

General Submarine Consortium (GER)

MU-90

WASS (ITA)

THALES, DCNS (FRA)

VULCANO

OTO MELARA

STRALES

OTO MELARA

EF2000

EUROFIGHTER

EUROJET

JSF

LOCKHEED MARTIN (industrial leader)

and ALENIA ERONAUTICA

C-27J

ALENIA AERONAUTICA

MPA INTERIM

ALENIA

AEJPT

AEM

M346 ITS

AEM

Fixed-Wing Aircraft

Programmes

Rotary-Wing Aircraft

Programmes

AW101 CSAR

AGUSTAWESTLAND

NH-90

AGUSTAWESTLAND

CH-47F

AGUSTAWESTLAND

BOEING

Missile Programmes

METEOR

MBDA ITALIA

FSAF

MBDA/ITA-MABDA/FRA-THALES

MEADS

MBDA ITALIA

NATO ALTBMD & Territorial MD

SELEX SI in 2 Multinational Consortia

(SAIC Team & TRS Team)

Space Programmes

SICRAL2

THALES ALENIA SPACE IT

TELESPAZIO

HELIOS

ASTRIUM

THALES ALENIA SPACE

TELESPAZIO

COSMO - SKYMED

THALES ALENIA SPACE IT

TELESPAZIO

MUSIS

THALES ALENIA SPACE

TELESPAZIO S.p.A.

ATHENA-FIDUS

THALES ALENIA SPACE

TELESPAZIO

VEGA

E.L.V. (AVIO – ASI)

RPS Programmes

PREDATOR A & B

GENERAL ATOMICS AERONAUTICAL

SYSTEMS INC.

AGS

NORTHROP GRUMMAN

(industrial leader)

TACTICAL RPS

AAI SHADOW 200

15 NATO NATIONS

FALCO – SELEX ES STRIX-C – ALPI AVIATION ASIO B – SELEX ES

C4ISTAR Programmes

SICOTE

SOFTWARE DEFINED RADIO

• NATIONAL SDR

• ESSOR (6 UE NATIONS )

• COALWNW (9 NATIONS)

SELEX ES

MAJIIC

+ NC3A

2

SELEX ES

DEFENCE

INFORMATION

INFRASTRUCTURE

INDUSTRIES/CONSORTIA

TO BE SELECTED

SELEX ES

VITROCISET

WI MAX Air Defence Radar Network

COUNTERFIRE RADAR

SAAB MICROWAVE SYSTEMS

SELEX ES

SELEX ES

ENGINEERING - IDS

COASTAL RADAR NETWORK

Interministerial System for

Maritime Surveillance

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CONCLUSIONS

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• We are facing a lot of difficult challenges

• Procurement must adapt with agility to the evolving scenarios

• Less overhead

• Lean structure to contribute to a Whole of Government

approach

• Better adherence to affordable and sustainable Requirements

• Importance of EU and transatlantic cooperation

CONCLUSIONS

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• In time of scarce resources in presence of complex and

unpredictable threats, the Italian Armed Forces are Transforming

while Operating

• Transformation to enhance operational capabilities and quality of

the military

• The Italian Armed Forces commitment is strong and determined

CONCLUSIONS

Quote of the Day

“The one who adapts his policy to the times prospers, and likewise that, the one whose policy clashes with the demands of the times does not.”

Niccolò Machiavelli 1469-1527

CHIEFS OF STAFF COMMITTEE

MINISTERIAL DECREE APPROVAL AND NATIONAL

ACCOUNTS SYTEM RECORDING

MoU Sign acquisition by Int Agency or Lead Nation

PARLIAMENT (COMMISSIONS)

60 DAYS

New Capabilities

Increase and Upgrading

L. 436/88 (Giacchè)

ROD/JORD

Approved by CoD

Market Analysis

(RFI) by GIP

(SGD lead)

RFQ issuance

Offers Assesment

Contract Signature and National Account System Recording

INTERNATIONAL

~15 mo.

NATIONAL

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ACQUISITION ITER: PARLIAMENTARY CONTROL

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FUNDING

KEY ALLIANCES

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ELETTRONICA

FINMECCANICA 31%

THALES ALENIA

SPACE 33%

(AZIONISTI PRIVATI)

36%

THALES ALENIA SPACE

FINMECCANICA 33%

THALES ALENIA

SPACE 67%

TELESPAZIO

FINMECCANICA 67%

THALES ALENIA

SPACE 33%

FINMECCANICA 25%

SUKHOI 75%

BAE SYSTEMS 33%

EADS 46%

MDBA

FINMECCANICA 25%

BAe SYSTEMS

37,5%

EADS 37,5%

FINMECCANICA 50%

EADS 50%

FINMECCANICA 21%

SUKHOI CIVIL

AIRCRAFT

COMPANY

ATR

EUROFIGHTER

ELECTRONICS SPACE SATELLITES MISSILES AERONAUTICS

KEY ALLIANCES

SCIENTIFIC AND TECHNOLOGICAL MODERNIZATION

INDUSTRY RATIONALISATION AND GLOBALISATION

INDUSTRIAL COMMON POLICY DEVELOPMENT FOR ARMAMENT MATERIAL

POLITICAL SUPPORT FOR THE SUCCESS OF INDUSTRIAL POLICY IN THE FIELD OF DEFENCE

OPERATIONAL REQUIREMENT SATISFACTION

Country

System’

Growth

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ACCURACY IN OPERATIONAL REQUIREMENT

ARMED FORCES USER AND «TEST BED»

EVOLUTION TROUGHOUT PRODUCTION

CONCLUSION