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.

3.1.2 Procurement plans

The Parliament decides the objectives for the future development of the Armed Forces. These are set out in the long-term parliamentary reports which lay down guidelines for the activities and plans of the Armed Forces. A full listing of current defence projects, including those approved but not yet initiated, is contained in the Defence Materiel Plan. This is published annually and is usually revised twice. The Chief of Defence's so-called «Document No. 2» (DOK 2) is issued annually and covers defence investment planned for the next 5 years. These documents are based on approved force levels and objectives and result from political, economic, technical and tactical considerations. The plans list the weapon systems and other equipment that the Armed Forces are planning to acquire over the next few years. A good deal of the content of these documents is normally classified but each year the Ministry of Defence also produces an unclassified supplement in connection with the submission of the defence budget to the Parliament. This outlines the planned investment for the coming year in terms of the different systems, equipment and construction projects involved.

There is no overall and detailed set of plans covering procurement of the goods and services required to support the operation of the Armed Forces from year to year. These purchases are made at all levels in the defence organisation throughout the country. A large proportion of the total is spent on procurements from local industry in the districts where units and establishments are located.

3.1.3 System responsibility

For the procurement of major systems the Materiel Command concerned will usually place a contract with a single company which will then act as the main contractor and be responsible for overall fulfilment of all aspects of the contract. The main contractor's competence in terms of technical expertise, administrative ability, financial standing etc is thus of prime importance.

The procurement of large and complex systems takes a long time and is very demanding in terms of resources, both human and financial. To relieve the already overburdened defence procurement organisation, the systems supplier must be able to manage his own subcontractors and the contractor must therefore be financed accordingly in order to limit, as far as possible, any risk to the Armed Forces. Selection of subcontractors for major tasks will often need to be approved by the contracting authority.

3.1.4 Norwegian subcontractors

In the case of procurement from foreign suppliers, every effort is made to motivate the supplier to use Norwegian subcontractors. This may be done by the contracting authority reserving the right to approve individual subcontractors or by placing contracts for subsystems or components separately for inclusion in the final product. Efforts are also made to arrange production under licence by Norwegian companies. Success here will depend largely on the capability and level of expertise of the companies concerned.