Joint Procurement Lessons From Defence
The defence sector in Europe has long been familiar with collaborative purchasing. Dr Baudouin Heuninckx picks out lessons for other organisations.
Collaboration is being hailed as one way to achieve procurement savings in the private and public sectors in the UK. In collaborative procurement, two or more entities with a similar need agree to purchase together – and sometimes to share the use of – the goods or services they require. This is expected to bring a number of benefits.
First, if the procurement involves fixed costs such as research and development, they can be shared between participants. Second, the organisations can achieve economies of scale because of the higher number of goods or services bought. Third, operational benefits can be gained from the use of the same products or contracted services: such resources can be pooled or shared, increasing flexibility. Finally, collaborating in procurement can help build longer-lasting partnerships with suppliers.
In the field of defence, collaborative procurement, whereby a number of states agree to purchase a major weapon system together, has been used for a long time. Despite being plagued by delays and cost over-runs, it remains a key feature of defence procurement in Europe. A number of studies have been conducted on joint defence buying, and many of the lessons learnt are applicable to fields other than defence. Here are a number of recommendations to ensure mistakes are not repeated…