The Purchasing Directorate is responsible for the procurement of commercial or
specialised materiel for the armed forces. The Directorate buys two million different items, 500,00 of which regularly.
Complex Services (KDL) and the Bundeswehr Purchasing Process (EinkaufBw)
The Complex Services/Purchasing Directorate (E) is based in Lahnstein and Koblenz, currently being subdivided into three divisions and 13 branches as well as the Directorate Staff (EAS) and Directorate Controlling/Bundeswehr Purchasing Controlling (EAC).
The Tasks of Directorate E within BAAINBw
In fulfilling its tasks Directorate E is working on all three pillars of the procurement and in-service process:
1. Procurement of materiel solutions i.a.w. the Customer Product Management (CPM) procedure;
2. Bundeswehr Purchasing (EinkaufBw) for non-project procurement; and
3. Satisfaction of demand via Complex Services (KDL).
The procurement and in-service process is characterised by clearly assigned responsibilities, clear-cut decision-making powers and a reduced number of interfaces.
Bundeswehr Purchasing (EinkaufBw) – Divisions E1 and E2
Bundeswehr Purchasing is defined as the procurement of commercially available and/or Bundeswehr-specific material goods as well as rights and services which serve to maintain the operability of the Bundeswehr during missions, exercises and routine duty at home and abroad. Procurement by Bundeswehr Purchasing also encompasses the satisfaction of demand for follow-on spare parts for weapon systems/equipment during their in-service use phase and requirements which are met via interdepartmental procurement (e.g. “Kaufhaus des Bundes”, the Federal government’s virtual marketplace). A wide spectrum of different supply items is procured – the number amounts to roughly 2 million, of which 500,000 are purchased regularly. The items purchased range from small, i.e. off-the-shelf parts, such as screws, nuts and gaskets, to Bundeswehr-specific materiel for equipment and complex weapon systems (follow-on procurement of spare parts for weapon systems).
Bundeswehr Purchasing has established an economically optimised and legally compliant process for satisfying materiel requirements using modern methods, following a comprehensive Bundeswehr-wide approach, and clearly assigning responsibilities.
The core principles of Bundeswehr Purchasing are as follows:
- a strategic method of work including a centralised and overarching command and control process;
- stringent material segment management oriented towards the procurement market; and
- a process-oriented organisational structure.
By implementing Bundeswehr Purchasing, a strategic tier of procurement has been added to the current, mostly operational-level tier represented by the procuring agencies. The intention is to ensure an optimised and comprehensive purchasing process. The overall responsibility for the purchasing process lies with Directorate A III at the Federal Ministry of Defence. It is at that level that the organisational framework for Bundeswehr Purchasing is set, purchasing strategies are adopted and policies are established. The responsibility for further developing the process and enforcing it at agency level lies with the Director of the Complex Services/Purchasing Directorate at BAAINBw. The Purchasing Manager ensures that all of the Bundeswehr’s purchasing agencies – currently numbering well beyond 900 – put the guidelines into operation.
The Bundeswehr Purchasing system is structured according to “material segments”, which are categorised according to the eCl@ss classification system. Based on a holistic approach, the material segments constitute clusters of supply items which are procured on the same or similar markets. The organisational structure mirrors these divisions.
The implementation of the strategic purchasing process was carried out systematically in three phases. The first phase saw the integration of three material segments, namely vehicle technology, office supplies and medical technology, into Bundeswehr Purchasing. Some early positive results were achieved owing to optimised requirements planning which was co-ordinated with the users. For instance, instead of frequently inviting tenders in order to satisfy recurring small-scale demands, BAAINBw now concluded multiple-delivery agreements with a term of up to three years.
The second phase of the Bundeswehr Purchasing optimisation process was successfully concluded, with the exception of the material segment “general services”. The following material segments were transferred into the Bundeswehr Purchasing Process: electrical engineering; automation engineering; process control engineering; housekeeping; housekeeping technology; foodstuffs; beverages; tobacco products; energy; extraction products; recycling products and residues; the partial segments grid-based energy sources (ZEE) and POL (petroleum, oil and lubricants); and the information, communication and media technologies material segment. After having completed the second implementation phase, the main focus was on optimising the quality and availability of data. In order to standardise Bundeswehr Purchasing, data on creditors and the framework agreements that had so far been managed in a decentralised manner was now centralised and transferred to a creditor master data management system. In addition, uniform information on the framework agreements of the entire Bundeswehr is now available to all procurement agents in a common framework agreement database. However, collecting, maintaining and displaying all data related to framework agreements down to item level with the help of the SASPF software (short for Standard Application Software Product Family) remains the short-term objective.
In the context of the 2016/2017 purchase planning process, the following material segments were finally merged into the strategic purchasing process at the beginning of the second quarter of 2017:
• auxiliary supplies, additives, cleaning agents;
• machine parts, fasteners, fittings;
• laboratory material, laboratory technology;
• machinery, appliances;
• operational equipment, workshop equipment (related to the major organisational element of Equipment, Information Technology and In-Service Support (AIN));
• operational equipment, workshop equipment (related to the major organisational element of Infrastructure, Environmental Protection and Services (IUD));
• packaging material;
• occupational safety, accident protection;
• piping technology;
• construction technology;
• organic chemicals; and
• semi-finished products, materials.
Preparations are currently ongoing to ensure that the complex “general services” material segment will be implemented as fast as possible in the major organisational elements AIN, IUD and Personnel.
The target of Bundeswehr Purchasing is to satisfy demand in a time, quality and performance-oriented manner while taking full advantage of cost-efficiency potentials and subscribing to a holistic understanding of service quality.
The framework conditions for Bundeswehr Purchasing have changed due to continuously increasing responsibilities placed on the Bundeswehr and overarching changes to both its IT and its personnel structure. This is why in December 2015 the order was issued to carry out an open-ended assessment and evaluation of alternative forms of organisation of Bundeswehr Purchasing, and to publish a key issue paper detailing recommendations for action on the future shape of Bundeswehr Purchasing.
In February 2017, a follow-on project called “Alternative Approaches to Bundeswehr Purchasing (AAEBw), Phase 2” was tasked, based on the tabled recommendations for action. This project has been completed in the meantime. The expertise gained during the AAEBw2 project will be incorporated into prospective optimisation measures.
Division E1 is divided into three branches and pursues the following tasks:
• creating and providing purchasing policy documents (e.g. order catalogues) and purchasing statistics and reports for BAAINBw;
• continuously developing the Bundeswehr Purchasing Process, drawing up policy documents and planning the purchasing process;
• managing the Bundeswehr Purchasing performance process and the procurement business process;
• analyzing the purchasing process;
• ensuring sustainability in procurement;
• acting as the design office for BAAINBw; and
• acting as BAAINBw’s point of contact for all bids.
Division E2 is organised into four branches, carrying out both strategic and operational tasks at material segment level. It is divided according to the different segments of the eCl@ss structure.
This enables the division to conduct targeted searches for required supplies and equipment on the procurement markets by developing and implementing specific procurement strategies for each material segment. Each material segment is controlled by a material segment manager. They have directive authority cutting across the boundaries of the major organisational elements. Support in terms of purchasing process analysis is provided for all specific material segments by BAAINBw Branch E1.1. This facilitates a common procurement process throughout the Bundeswehr for the individual segments. This, in turn, leads to pooling and synergy effects.
Strategic activities for material segments which have already been transferred are now bundled in Branch E2.1, where they are subdivided into weapon system-specific and policy activities. Therefore, the strategic “tools” needed for the development of the operational procurement activities in the majority of material segments have been concentrated in one organisational unit.
In addition, Branch E2.1 is in charge of supplier management within the Bundeswehr Purchasing Process, an area that is currently being set up. To start with, reminder procedures within the Bundeswehr Purchasing Process were revised, with a pilot phase currently ongoing. The reminder procedures mostly aim at monitoring compliance of individual contractors with contractually agreed delivery dates. Also, supplier management currently lends support in cases of faulty deliveries as well as in the improvement of the process flow of incoming and outgoing goods in fixed logistics facilities, including the Bundeswehr material warehouses. In future, supplier management is intended to support the strategic and operational-level parts of the Bundeswehr Purchasing Process by monitoring the market to find, above all, reliable suppliers.
In turn, strategic activities for material segments which are not weapon system-specific and do not touch policy are pooled in Branch E2.4. This includes medicine/medical technology and closely related material segments, for instance laboratory equipment and technology. Both branches have the authority to conclude strategic contracts.
While carrying out the strategic activities mentioned above, E2.4 is also responsible for strategic contracting (standard and interdepartmental indefinite-quantity agreements) in the POL material segment, ensuring POL supply at home and abroad.
Operational tasks are concentrated within Branches E2.2 and E2.3. They deal with the actual procurement of goods. Essentially, this encompasses the following activities:
• implementing the procurement strategies and standards in case any have been set;
• carrying out the public contract award process;
• order processing;
• checking deliveries and invoices;
• carrying out monetary transactions.
These two branches are responsible for procuring almost all of the follow-on spare parts for in-service weapon systems/equipment that are required by the forces. A considerable share of the contracts is tendered competitively and with SMEs taking part in the process.
In future, operational procurement procedures are intended to be developed further by continually optimising the Bundeswehr Purchasing Process. This can be achieved, for instance, by further increasing the number of framework agreements that are initiated via material segment planning, with the purpose of using the available resources more efficiently.
Complex Services – Division E3
Public-private partnerships (PPP) – Complex Services (KDL) constitute the third pillar of the procurement and in-service process.
It is a form of satisfying requirements which can occur in all Bundeswehr task areas and processes whenever a demand cannot, or is not supposed to be, met by using Bundeswehr-owned resources alone. Unlike procurement in accordance with the amended CPM, this procedure focuses not on the product, but on the service itself.
The structure of the division is as follows:
Branch E3.1 develops project strategies for complex services projects, works out the performance process, develops it further and supports the evaluation and statistics phase of complex services projects. On top of that, Branch E3.1 supports the other branches within the remit of Division E3 in all common and policy tasks related to project management, the implementation and documentation of cost efficiency analyses, the creation of statements of work, and during expression-of-interest procedures.
Branches E3.2 through E3.4 take on project management responsibilities for complex services of which Directorate E is in charge. These include:
- Bundeswehr Vehicle Fleet Service System (System BwFPS): meeting the Bundeswehr’s mobility requirements involving commercial, unprotected vehicles;
- Army Maintenance Logistics (HIL): complex maintenance services for entire Bundeswehr land systems;
- Package 1 CBRN supplies: supply management of the Bundeswehr’s individual CBRN protective equipment and clothing;
- Package 2 CBRN supplies: supply management of both common and weapon system-specific material for Bundeswehr CBRN defense;
- PPP Bundeswehr air traffic control training: training of Bundeswehr air traffic controllers and aeronautical information officers (Flugberater);
- Central Bundeswehr Spare Parts Logistics (ZEBEL): supplying civilian and selected military maintenance facilities with government-owned spare parts via a private service provider;
- clothing management (supplying Bundeswehr soldiers and civilian employees with clothing and personal equipment).
Branches E3.2 through E3.4 have been set up as organizational elements for the project management of complex services projects, taking both technical-logistic and overall control of the aforementioned projects. Projects for complex services are systematically developed and/or moved forward and implemented by these branches. Integrated project teams provide the framework for interdisciplinary cooperation across organizational boundaries. They contribute significantly to the success of the project work. The objective always is to develop customised capabilities for our forces in a timely manner while at the same time complying with the legal framework conditions and providing cost-effective solutions.
Branches E3.5 and E3.6 are responsible for processing contracts, dealing with issues related to contract award law and negotiating prices for the projects.
Additionally, Branch E3.6 is in charge of processing and awarding contracts related to transportation in the Bundeswehr (for transport by road, rail, air and sea). As such, Branch E3.6 is the central contracting authority ensuring that the demands for transportation in the Bundeswehr are met both during routine duty (including exercises) and during missions (e.g. EUTM Mali, ATALANTA resupply etc.).
In that context, their area of activities also extends to processing cases of impaired contract performance, for instance transport damage.
Additionally, Branch E3.6 is in charge of managing the project “PPP Bundeswehr air traffic control training in Kaufbeuren” in terms of procurement and contract law. This contract provides for the training of Bundeswehr air traffic controllers and aeronautical information managers (Flugberater), including related services such as board and lodging.
A new training campus is currently being built in Kaufbeuren, expected to be ready for occupation in August 2019.
Finally, Branch E3.6 is responsible for processing and awarding various framework agreements for a wide array of support services within the FMoD’s remit. The framework agreement on support services for project management serves as an example.
As a result, both the project management and the legal and economic expertise related to complex services are concentrated in one division, thereby making it easier to tap into potentials for optimization.
The following list of outcomes drawn from current projects serves to illustrate the broad spectrum of activities:
1. Bundeswehr Vehicle Fleet Service System (System BwFPS)
The Bundeswehr Vehicle Fleet Service System serves to meet the mobility requirements of the Bundeswehr in an economically viable manner by providing commercial, unprotected vehicles. The services offered by BwFPS GmbH include the provision of commercial vehicles, commercial special-duty vehicles, commercial vehicles with special military equipment as well as services.
The contract on mobility and vehicle fleet management services for the Bundeswehr and measures intended to enhance the Bundeswehr Vehicle Fleet Service System entered into force on 1 July 2016. It merges the previous three framework contracts, i.e.
• the contract on the provision of commercial vehicles,
• the contract on the provision of vehicles with special military equipment and driver training vehicles, and
• the contract on the build-up and operation of a central vehicle management
into a single framework contract.
Another innovation of the BwFPS follow-on solution is that it is unlimited in time. This provides predictability in planning and makes it possible to implement optimization measures over an extended time period. In order to maintain a constant incentive to innovate even in the context of an open-ended contract, a new instrument named “Continuous Outcome Monitoring” (Kontinuierliche Ergebniskontrolle – KEK) was created. It serves to evaluate whether BwFPS GmbH provided services in a cost-efficient manner and in a way that is tailored to the demand, and to highlight existing potentials for optimisation.
The “Competition Survey” is intended to examine whether standard commercial mobility services that BwFPS GmbH provides for the Bundeswehr can be procured more cost-effectively in certain places. The Bundeswehr Vehicle Fleet Service System is faced with additional challenges which transcend the economic level, for instance creating the necessary preconditions for what is called “instances of demand” (Bedarfsfall BwFPS). Such instances arise when, based on the situation in a mission country, military forces assume control, maintenance, material management, spares management and data management of vehicles which are provided by BwFPS GmbH.
2. Army Maintenance Logistics (HIL)
HIL GmbH was founded in February 2005 as a cooperative company intended to provide services for military land systems. In 2013, the Federal Ministry of Defence became the company’s sole holder. Since then, it has been run as an in-house company of the Federal Government.
The service model has proven to work well in practice and has become indispensable in terms of ensuring materiel readiness within the Bundeswehr.
The HIL follow-on solution has been in operation since 1 January 2018.
The HIL follow-on solution contract, signed on 13 July 2017, is valid indefinitely. The aim of the follow-on solution from 2018 onwards is to keep a set portfolio of protected and unprotected military wheeled and tracked vehicles available under the economic management of a service provider which is integrated into the Bundeswehr’s logistics system. The scope of services to be provided under the HIL follow-on solution encompasses, amongst other things, an expansion of the product portfolio for all protected and unprotected military wheeled and tracked vehicles managed by the Bundeswehr itself, and the provision of services during routine duty, exercises or deployment abroad (first use from 2019).
- Compared to the current scope of services, this will mean:
- ensuring service levels of 70% availability on workdays, and
- a significant increase in the number of products managed within the portfolio to up to 19,000 land systems, as well as
- up to 29,000 installation kits and pieces of equipment.
The services are mostly provided by subcontracted private-sector companies and by assigned non-military Bundeswehr staff in infrastructure provided for the purpose.
The provision of services by HIL GmbH, itself an in-house company owned by the Federal Government, is therefore going to continue seamlessly.
3. Central Bundeswehr Spare Parts Logistics (ZEBEL)
The project “Central Bundeswehr Spare Parts Logistics (ZEBEL) 6” ended on 31 August 2017. BAAINBw Directorate E signed the contract for the ZEBEL 7 project on 25 August 2017. Working in a timely and needs-oriented manner, it thereby provided the conditions for continuing the project, including improved IT connectivity and an extended service portfolio for the users.
The ZEBEL 7 contract focuses on the provision of spare parts tailored to individual maintenance requests from the contractor’s warehouse as well as on connectivity between contractor IT systems and the Bundeswehr IT System. The scope of services includes the following elements: the provision of spare parts from a central warehouse; transportation of the parts to the maintenance facilities; and handling of all management tasks in co-operation with the Bundeswehr Logistics Command (LogKdoBw), the Bundeswehr Logistics Center (LogZBw) and BAAINBw.
Material and data management services for Bundeswehr-owned stores that are not self-sufficient will constitute additional elements of the ZEBEL 7 project. This consolidates and standardises the contractual basis of spare parts logistics. The contract will run until 2024 and have a volume of about €146M.
4. Bundeswehr Clothing Management (BMBw)
The Bundeswehr Clothing Management (BMBw) is tasked with meeting the Bundeswehr’s demand for clothing and personal equipment, providing the Bundeswehr’s soldiers and eligible civilian staff with such items.
BAAINBw Branch E3.4 assumes the duties of project management and of materiel responsibility for operational viability (MatVER) in the area of clothing and personal equipment. Thus, clothing and personal equipment are entirely developed within the CPM framework, with procurement policy documents (phase documents, statements of work and/or technical specifications) being drawn up and clothing and personal equipment being managed by the materiel manager for operational viability during the in-service phase.
Bundeswehr clothing management, a complex service, is substantially supported by BwBekleidungsmanagement GmbH (BwBM), an in-house clothing services provider of which the Bundeswehr is the only associate partner.
BwBM is tasked with:
- materiel planning (requirements planning and control);
- procuring clothing and personal equipment according to BAAINBw quality goals;
- planning and carrying out distribution;
- issuing and taking back clothing of Bundeswehr members on agreed dates, during routine duty and for deployment (issuing clothing in Germany and/or providing clothing in Germany for deployments abroad);
- exchange, refitting, laundry, dry cleaning, modification and maintenance of clothing and personal equipment.
The following clothing projects currently stand out from a vast array of individual projects:
New Armed Forces Combat Boots System (KSS SK)
Within this project, each soldier is issued two pairs of heavy, and one pair of light, newly fielded combat boots. The new aspect in Bundeswehr terms is that each soldier can choose between models from two different manufacturers in each case. Implementation of the KSS SK project was initiated in the second half of 2017. By the end of that year, 85,000 pairs of light combat boots (replacing the “Einsatzkampfschuh” combat mission boots) and heavy combat boots (replacing the “Kampfschuh, allgemein”) had already been procured. An additional 210,000 pairs were purchased in 2018. By the end of 2018, almost all soldiers had been provided with a first pair of heavy combat boots. 2019 will see the introduction of corresponding state-of-the-art functional socks. Due to the size of the procurement project, it is not possible to issue the new combat boots to all soldiers at the same time.
Accordingly, the service branches have drawn up an order of priority for their supply. Outfitting the entire Bundeswehr along the lines of the Armed Forces Combat Boots System project will be completed by the end of 2020. To this end, a total of about one million pairs of combat boots are being procured.
Armed Forces Combat Clothing (KBS SK)
The Armed Forces Combat Clothing project sees the fielding of functional clothing for soldiers which helps to enhance survivability, protection and sustainability of armed forces on deployment around the globe. The clothing is meant to support the human body in conducting operations even under extreme conditions, at day and night, under any weather conditions, and in almost all climatic regions, terrain conditions and urban environments.
To that end, the following components will be introduced:
- Cold-weather liner jacket
- Cold-weather liner trousers
- Waterproof liner jacket
- Waterproof liner trousers
- Multi-layered undershirt/underpants
- SOFCOM undersocks
- Insulation suit (insulation layer II)
- Underwear (hydrophilic, short)
- Dust protection cloth
- Combat shirt (3 or 5-colour camouflage print)
- Hardsided knee protector
- Mobile waterproof protection hood(3 or 5-colour camouflage print)
- KBS SK combat suit jacket (3 or 5-colour camouflage print)
- KBS SK combat suit jacket (long, 3 or 5-colour camouflage print)
- KBS SK combat suit trousers (3 or 5-colour camouflage print)
The roll-out of Armed Forces Combat Clothing has already started. It is intended to procure 50,000 Armed Forces Combat Clothing kits by 2021 and to ensure that by 2027 90,000 soldiers will be outfitted with them.
Modular Ballistic Protection and Load-Carrying Equipment (MOBAST)
The Modular Ballistic Protection and Load-Carrying Equipment for soldiers (MOBAST) consists of a modular body armour system and the corresponding basic load-carrying equipment (multi-purpose magazine pouches, fast rope bag, multi-purpose bags etc.) as well as underwear with integrated protection against micro fragments. The aim of this project, which falls within the wider framework of what is called “task-oriented equipment”, is to replace all previous common versions of body armour and to considerably increase the total quantity of available body armour in the medium and long term. To this end, the procurement of around 46,000 systems by 2025 will be tasked. In the long term, a further considerable increase is planned to be completed by 2031.
Official Provision of Service, Dress and Sports Clothing (“Fiscal Supply”)
An efficiency analysis is being carried out in order to assess whether service, dress and sports clothing can be provided officially for all soldiers. This includes furnishing all-season jackets and soft-shell jackets, both of which have been given priority and will be provided officially from the next fiscal year onwards.
New Combat Helmet
The Bundeswehr Office for Defence Planning is currently drawing up the Capability Gap and Functional Requirement document in respect of a new combat helmet. This project aims at replacing the common combat helmet introduced in the 1990s and its variant for airborne infantry with a more modern model, including capability upgrades (e.g. integrated mounts for night-vision devices and other additional equipment).
Team of authors BAAINBw.