3. DEFENCE PROCUREMENT ARRANGEMENTS

Procurement in the defence sector is divided into two main categories: Systems and equipment and building and construction. The first category covers weapon systems, aircraft, vessels, vehicles, ammunition and communications equipment, computer systems, office equipment, clothing etc. This category also includes the procurement of provisions, furniture and fittings and the purchase of services not directly associated with building and construction (i.e. washing and cleaning, printing, consultancy fees etc).

The other category covers buildings and other permanent facilities including fortifications and other installations, complete with installed equipment, and all expenditure incurred either as capital investment or running costs. Building and construction costs can be subdivided into two main groups: nationally financed projects and programmes commonly funded through the NATO security investment pro-gramme. A large part of the contracts in the building and construction sector are awarded to Norwegian companies.

The defence procurement authorities aim to set a leading example in their compliance with national and international safety regulations in all aspects of their activities. The Armed Forces must therefore also act as a driving force in enhancing the ability, and the will, of its suppliers to deliver products which are safe to use, cause minimum harm to the environment and have been produced using environmentally friendly methods. No procurement is to be undertaken without prior clarification of the environmental effects.

3.1 Procurement of systems and equipment

A high priority objective of the defence authorities is to reduce operating costs. This is absolutely essential in order to free resources for investment in new and more cost-effective defence equipment. This implies a clear shift towards increasing the share of the defence budget devoted to investment in systems and equipment. The 30 or so largest and most extensive defence programmes are designated Category 1 projects and these require parliamentary approval for initiation and for any change in the overall funding of the project.

3.1.1 Contracting authorities

Defence procurement covers a very wide spectrum ranging from research and development through to the production of equipment and spare parts, the preparation of documentation, training, consultancy services and maintenance. The nature and extent of a particular procurement determines which branch of the defence establishment will be responsible for managing the project. Major system and equipment contracts are concluded and managed by the Materiel Commands of the Service concerned or by the Norwegian Defence Communications and Data Services Administration. If the forecast project cost exceeds NOK 50 million, Headquarters Defence Command Norway seeks Ministry of Defence approval both at the tender stage and for the placing of the contract. The Norwegian Defence Construction Service is responsible for contracts relating to building and construction work. Procurement contracts are also placed at levels of the defence organisation. Headquarters Defence Command Norway, Defence Commands North Norway and South Norway, the various District Commands, indeed even individual local units, are all involved to a greater or lesser degree in procurement activities.