The Program Organization (PMO) combines the project management for the key armaments projects MKS 180 multi-role combat ship, tactical air defence system (Taktisches Luftverteidigungssystem, TLVS) and the European MALE RPAS in one structure optimised for the specific tasks to be performed. Specialists from various fields with technical, economic and legal expertise are directly assigned to the respective project and can focus exclusively on their project by performing their project-related tasks in a largely independent manner.
A comprehensive modernisation of armaments procurement, known as the Armaments Agenda, was initiated on the basis of the 2014 “Comprehensive survey and risk analysis of major armaments projects”. The results included the decision in 2015 to set up a program organisation, which was implemented in 2016 within the scope of the restructuring of BAAINBw. This organisational structure shall serve the purpose of allowing for a better consideration of the differences and special characteristics of the three major armaments projects mentioned above.
On the one hand, the PMO responds to the demands of these strategically important projects by having specialists from various fields cooperate with a direct focus on the projects. The organisational consolidation promotes close information exchange and optimised coordination of technical, economic and legal aspects. On the other hand, the flat hierarchy in connection with the assignment to the “Selected Armaments Projects Functional Supervision Group”, which reports directly to the State Secretary for armaments at the Federal Ministry of Defence (FMOD), allows for an immediate and swift management. The PMO director’s right to direct access to the State Secretary is a visible sign of this flat hierarchy.
The PMO is organised into four divisions and a staff element. Three divisions (PMO1, 2, 3) are responsible for the projects. A fourth division (PMOJ), which incorporates the PMO’s legal and economic expertise, is led by the projects legal advisor. Each of these experts is permanently assigned to a particular project. The PMO currently has a total number of 113 posts, 14 of which belong to PMOJ.
The position of the PMO director corresponds to that of a BAAINBw director, including the pertinent executive functions. He is in charge of providing an overview of the current situation of each project and is a member of the project-related steering bodies at the Federal Ministry of Defence (FMoD). The projects legal advisor supports him in his capacity as deputy director and is thus not only responsible for the timely and proper legal management of the projects, but also has managerial responsibility in the PMO.
The establishment of this new organisational form has provided the foundations for modern armaments management methods to be implemented in the three projects.
As an integral part of BAAINBw, the PMO also requires the expertise represented in BAAINBw’s policy and intersectional divisions for project and contract management.
The profoundly different challenges to be faced in connection with the three projects have demonstrated that this new organisational structure offers enormous potential and ensures an efficient and effective project management.
PMO1 – MKS 180 Multi-Role Combat Ship
As the future modular, maritime capability platform, the MKS 180 is to help maintain and complete the capabilities required in the maritime engagement network within the German Navy’s entire range of missions and tasks. This includes defence against air attacks as well as surface and underwater warfare. In addition, the MKS 180 ships will be capable of conducting sea-based operations, including command and control of Special Forces, and performing support functions such as fire support, maritime interdiction and medical support. This mission spectrum will preserve the capabilities of the Class 122 and 123 frigates. In order to be able to use the MKS 180 ships during a period of up to two years on deployment while, at the same time, significantly reducing the crew size compared with units in service, the MKS 180 project builds on the existing concepts of the class 125 frigate. A contract for four units is planned to be concluded, with an option for another two ships.
One special feature of the MKS 180 project is the award procedure that was selected. For the first time, a maritime procurement project of this size was put out to tender under a negotiated procedure after a request for interest had been published at European level (§11 para 1 of the Public Procurement Regulation for the Areas of Defense and Security, VSVgV). The procedure is designed in such a way that it allows an intensive exchange between the customer and the bidder to improve the content, e.g. the statement of work and the contract on the construction of the ship, in several bidding rounds.
The contract award documents place special importance on the processes to be installed at the bidder’s and his subcontractors’ organisations. These processes refer in particular to effective project management, which focuses on risk management jointly implemented by the future contractor and the customer. Another important process is the consistent application of life cycle cost (LCC) estimates when selecting specific components in order to minimise in-service costs from the beginning.
The results from the bidding rounds underlined the suitability of the approach chosen for the MKS 180 procurement project. The strengthened position of the contracting authority allowed negotiations and cooperation to take place on an equal footing. At the same time, it became evident that the contract award procedure in this dimension was an “exceptional” challenge for all parties involved.
PMO1 has a total of 33 posts at its disposal to meet this challenge, complemented by permanently assigned legal experts from PMOJ. The MKS 180 project director makes use of a structure within PMO1 that is based on the following task areas: platform systems, employment system, establishment of operational viability, processes and common project tasks.
PMO1 aims at selecting an effective weapon system, which is cost-efficient throughout its life cycle, and implementing it together with an active and competent partner by means of a low-risk procurement process.
PMO2 – Tactical Air Defence System (TLVS)
A comprehensive stocktaking formally concluded the tri-national MEADS (Medium Extended Air Defence System) programme in 2014. One year later, the NATO MEADS Management Agency (NAMEADSMA) and the international development contract were discontinued. The results of almost ten years of development, with a total value of around US$4Bn, are available to the participating nations, USA, Italy and Germany, for follow-on activities.
A capability gap in ground-based air defence will arise at the end of the next decade. To close this gap, the Chief of Defence decided on 8 June 2015 in favour of a MEADS-based solution for a future tactical air defence system (TLVS). The first contract negotiations with industry started in May 2017 and resulted in a second request to industry in August 2018 to submit a modified, improved offer on the basis of the negotiation outcome in spring 2019. In the wake of this selection decision, the Chief of Defence imposed obligations on BAAINBw to examine the development risks regarding the implementation of the TLVS project, which were identified in the proposed solution, early enough to leave the door open for an opt-out in case of problems with technical feasibility, within an acceptable cost benefit ratio. The relevant technical examinations have, in the meantime, been concluded.
The foreseeable high complexity of the future ground-based air defence system, which has a large number of different subcomponents, also calls for innovative approaches within the organisation of the contracting authority. At a very early stage it became clear that the team that had worked on the predecessor project MEADS would not be large enough to accomplish the upcoming tasks of the TLVS project in light of its scope and structure, not least because, unlike the MEADS program, the national TLVS project does not involve a comparable agency such as NAMEADSMA.
Currently, a total of 49 posts are allocated to the TLVS project, complemented by the permanently assigned legal experts from BAAINBw PMOJ.
The following five major specialist technical areas were set up:
- System engineering and system
- Effectors and sensors
- CCI and weapons control systems
- Communication system
- Integration management and compliance demonstration
In addition, overall responsibility for technical implementation was transferred to a chief engineer and the post of a TLVS system engineer, who acts as a connecting link and coordinator between the technical areas mentioned above, was created.
An analogous approach was taken in the field of project management, resulting in the establishment of the following areas:
- Logistics and establishment of operational viability
- Quality and schedule management
- Budget planning, reporting and risk management
- Configuration and obsolescence management
Additionally, the high reliability of TLVS on the tri-nationally procured MEADS technology and the projected inclusion of other international partners in the project made it necessary to establish an independent “International Cooperation” element.
PMO3 – European MALE RPAS
On 5 September 2016, Germany, France, Italy and Spain started a definition study for the development of a European drone. OCCAR (Organisation Conjointe de Coopération en Matière d’Armement) was entrusted with the management of the study. Currently, thirteen posts at PMO3 are assigned to perform national tasks. Germany has taken a leading role in this European project for an armed MALE class reconnaissance drone, which will be designed to carry modular payloads. In the definition study, the multinational requirements placed on the system to be developed were agreed. The study culminated in the successful Preliminary System Design Review which describes a system design tailored to meet the national demands.
Unlike in previous multinational development projects, the participating nations agreed on the development of one drone that will be certified according to common standards, but still at national level. This is what the directors of the respective military certification authorities of the partner nations determined in March 2017 in the so-called “Signal of Munich”. Apart from that, the heads of the national military certification authorities decided to realise also the participation in general air traffic in Germany and Europe via a step-by-step approach with respect to the regulatory and technical possibilities. The objective is to overcome the limitations of the previous MALE systems regarding their operation and also regarding exercise activities in Europe.
A decision on the development, the procurement and the industrial support required at the beginning of the in-service phase will be made on the basis of sound cost estimates submitted by industry and based on results from the definition study. This decision will then be submitted to Parliament for approval, in line with the requirement of parliamentary approval for contracts exceeding €25M. The development phase of the European drone could start at the end of 2019. The aim is to carry out an initial flight in 2023 so that the first production systems could be delivered in 2025, providing an initial operational capability.
In parallel with the definition study, the documents required by the nations were either prepared or are currently being prepared. For Germany, the required documents are laid down in the CPM (Customer Product Management) regulations and include the Capability Gap and Functional Requirement (FFF) document signed in June 2018 as well as the Selection Decision document which is expected to be signed in the first half of 2019. At the same time, industry was requested by OCCAR to submit a proposal for a contract on the development, the procurement and the industrial support required at the beginning of the in-service phase to allow for a continuation of the project work with the least possible delay after the evaluation of the bid and the subsequent contract negotiations. The lead nation principle which was successfully applied in the definition study is to be continued in the next stages of the project when Germany with its industry and government representatives will continue to act as lead nation.
The participating nations wish to seek financial support for the project from the EU Defense Industrial Development Program (which is part of the European Defense Fund) and are preparing the necessary steps together with industry, OCCAR and the European Commission. In addition, Germany has suggested the project as a PESCO (Permanent Structured Cooperation) project, with a particular focus on a joint, European operation of the European MALE RPAS.
Team of authors BAAINBw.