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Faced with looming economic recession, the lessons learnt from the Covid-19 crisis are vast and go beyond the question of public health. They include the issue of sustainable manufacturing capacity, security of supply, and smart, well-structured, technological innovation. Will defence industries be asked to pay a “COVID dividend” by our politicians, or will they be included in a societal dialogue to act upon these lessons learnt?

Due to a shortage of disposable masks, the US Air Force has been using its 3D printers to make face shields to combat the Covid-19 pandemic. (Photo: US Air Force)

In the past two months, the world witnessed an impressive mobilisation of various industries to provide much needed equipment in the fight against Covid-19. Big and small companies alike offered their support to governments. Many new technologies, like 3D printing or Artificial Intelligence, proved their utility but also raised many policy and societal questions.

For governments, the crisis revealed untapped resources within their national industrial bases and also a challenge to adapt regulatory and bureaucratic processes to the urgency of the moment, so product quality and safety are not compromised.

The defence and aerospace industries made no exception in this effort. Some examples of how defence industries contributed could illustrate this fact and provide insights on industrial policy steps that could be considered in the future.

Defence Industry and Covid-19

The lack of Personal Protective Equipment (PPE) and ventilators was salient. Governments were competing for the same resources, trying to avoid fraud by unscrupulous suppliers, and enforce quality and safety regulations under severe time pressure.

Raytheon Technologies Corporation, one of the largest aerospace and defence companies in the transatlantic space, includes Collins Aerospace following the Raytheon-UTC merger. As suppliers of essential components for cargo aircraft like the C-130, Collins played an intrinsic role in securing transportation of key supplies during the crisis. In addition, the company used nearly 70 3D printers across Raytheon Technologies’ global locations to produce face shield headbands.

Lockheed Martin, global security and aerospace company, produced more than 50,000 protective gowns and 27,000 face shields.

In Europe, the defence industry sector came up with concrete solutions and showed remarkable capacity to integrate and promote innovation from Small and Medium Sized Enterprises (SMEs) and universities.

Romarm is the largest supplier of military equipment, ammunition, and maintenance services in Romania, having 15 subsidiary factories under its supervision. During the crisis, Romarm added three lines to its usual production lines to secure, at maximum capacity, manufacturing of up to 8000 surgical masks per hour per production line. In addition, an FFP2 mask production line was installed, with a manufacturing capacity of around 3000 masks per hour.

The company also explores possibilities to support manufacturing of ventilators, and several prototypes available on the Romanian market are under consideration. A significant challenge is the dependency on external markets for certain small but essential ventilator components. Many suppliers are based in China – a country still in need for such equipment. However, as we will see in this article, some European defence-related industries started to propose solutions during the crisis.

Romarm also teamed up with Stimpex SA, a Romanian SME specialised in CBRN protective equipment, to manufacture a newly developed portable isolator for the evacuation of patients contaminated with biological agents, including SARS-CoV-2. The prototype isolator was developed in record-time by a Scientific Research Center of the Romanian Military Equipment and Technologies Research Agency in collaboration with Stimpex.

Like Raytheon Technologies in the US, companies belonging to the French aerospace and defence group Safran provided significant support. As suppliers of turbine engines and other components for helicopters and for A400M military transport aircraft, the group played an intrinsic role to assure availability of patient transportation.

Safran Aero Boosters, the group’s Belgian subsidiary, offered to use its 3D printing machines to produce spare parts for ventilators. In only two weeks, the company managed to successfully test a flow meter and to make it available to hospitals. The company also proposed to a university team of researchers to industrialise a ventilator prototype developed by the team.

Safran as well as Leonardo UK, another leading defence player in Europe, quickly converted their production lines to produce PPE for medical use. Safran is also working with authorities to adapt for medical use protection masks originally intended for soldiers, and Leonardo proposed an improved helmet and mask system to enable helicopter crews to continue fly during the pandemic.

Initiatives extend beyond the current management of the crisis. Restart of economic and social activities in a safe environment is essential.

Airbus, global leader in aeronautics and space, partnered with Koniku Inc. – US biotech SME – to co-develop a solution for the identification of biological hazards by adapting and extending research activities on a previous solution that was focused on contactless and automated detection of chemicals and explosives on-board aircraft and in airports. Cooperation between the two companies started in 2017 and its benefits are clearly visible today.

These examples remind about the capacity of defence industries to swiftly adapt to changing circumstances. From a practical perspective, they also highlight the challenge of having to quickly switch R&D focus and production lines during fast moving scenarios. This includes the challenge for the workforce to adapt and apply its expertise to new scenarios and unexpected requirements.

Paradoxically, the biodefence sector seems to have anticipated this type of challenges when it advanced the idea of “flexible manufacturing”. It is perhaps because viruses, like threats in general, tend to mutate.

Could our defence industries have provided even more support if the idea of fast changing requirements was already part of a pre-existing manufacturing model supported by Public-Private Partnerships (PPP)? Or, could they do so in the future to support better response to unexpected civil emergencies or security threats to our society and way of life?

3D printed masks sit inside the medical warehouse at Tripler US Army Medical Center, Hawaii. (Photo: US Air Force)

“Flexible Manufacturing” in the Bio-Defence Sector

In 2012, the US Biomedical Advanced Research and Development Authority (BARDA) established three Centers for Innovation in Advanced Development and Manufacturing (CIADM). Structured as Public-Private Partnerships (PPPs), the objectives of these Centers were:

  • to provide core services for the advanced development and manufacturing of CBRN biopharmaceutical countermeasures (CM);
  • in an emergency, to accelerate development and manufacture of CM by providing surge capacity;
  • to provide specialised workforce development through training programs aligned with regulatory guidelines;
  • to explore emerging and innovative technologies that could be applied to current or future medical CM development efforts, including through collaborations with small companies. According to Medical, exploring such technologies in this framework would also “reduce risk, increase yield, and ultimately to reduce total life-cycle costs through flexible manufacturing, consolidating other costly product development expenditures, or any other economy-of-scale opportunities.”

To date, BARDA funded three Centers and concluded with major biopharmaceutical companies PPP agreements that could be renewed for up to 25 years. Under these contracts, the awardees “retrofit existing facilities, or build new facilities to incorporate flexible, innovative manufacturing platforms that can be used to manufacture multiple products.”

The PPPs’ governance process is overseen by a governmental Advanced Development and Manufacturing Steering Committee that advises on the prioritisation of projects and establishes specialised working groups, monitors program functionality and infrastructure, and supervises product development.

The Centers proved their utility during the Covid-19 crisis. US BARDA has recently partnered with the CIADM established a few years ago at the company Emergent BioSolutions, to develop Covid-19 Human Immune Globulin (HIG). BARDA’s funding will support the collection of plasma and the manufacture of the therapeutic for clinical evaluation in patients later this year.

Public-Private Partnerships in the Defence Sector

Public-private partnering is known to the defence sector. The end of the Cold War triggered major transformation of the Armed Forces and of defence industries. Economically, the “peace dividend” called for major cuts in defence spending. Mission-wise, the new strategic environment required forces to adapt from a relatively static posture to a deployable and highly mobile one. In addition, after 9/11 – and especially in the last decade – defence forces were increasingly called in support of civil authorities at home. The Paris or Brussels 2015 and 2016 terrorist attacks, but also the Covid-19 crisis, are reminders of this.

Defence transformation did not happen at once but was a recurrent process with inputs enshrined in national, NATO and EU defence policy reviews (e.g. US Quadrennial Defense Review; UK Strategic Defence Review) and outputs visible as further reorganisation to optimise costs while increasing availability, performance and longevity of defence systems.

Defence industries were not spared from these changes but had to adapt in kind. In parallel to the post-Cold War reorganisation and privatisation, industry had to adapt to armed forces’ urgency to optimise life-cycle sustainment costs as part of their logistics transformation. Minimising cost and logistics footprint was essential.

Soldiers from the 551st Medical Company (Logistics) and the 627th Hospital Center unload tri-walls of medical supplies as they arrive at Joint Base Lewis McChord, Washington, in support of Covid-19 relief efforts March 30, 2020. (Photo: US Army)

Acquisition costs, while the most visible, are not necessarily the highest. Product sustainment throughout life cycle can trigger much higher costs unless effective life cycle sustainment planning is implemented. It is today widely agreed, for example, that the demand for sustainment of a system is likely to be lower if this is already well-planned in the early stages of the life cycle. However, when the system is already acquired, the initial product support strategy (e.g. maintenance, supply, manpower) can be improved to optimise remaining life-cycle sustainment costs. In addition to sustainment, support services (e.g. air refuelling) can be an important cost driver.

Against this backdrop, the “Outcome-Based Contracting (OBC)” or “Performance-Based Logistics Contracting (PBL)” emerged in the new millennium as a public-private business model that can help optimise customer support and improve operational readiness at reduced ownership costs. As opposed to traditional transactional contracting, in PBL the government procures an outcome – such as system or service availability – and seeks to reduce overall costs by placing more responsibility on the industry. The latter is incentivised to find innovative ways to reduce costs, including through investments, in exchange for a set of rewards that depend on the delivery of the required outcomes at reduced total cost.

There are several definitions for OBC or PBL. Most importantly, PBL structure and contractual constructs can vary depending on project scope, context or cultural factors, including national approaches on the role of industry in relation to the state. For example, in the beginning, PBL was mostly used by armed forces in the Anglo-Saxon countries but the model started to progressively gain more attention in continental Europe. The US C-17 GLOBEMASTER III Sustainment Partnership is one of the best-known programmes that include PBL contracts. However, many more such examples exist. Indeed, PBL has been implemented for various system levels, from Integrated Logistics Support for an entire system or system-level support service, to sub-systems (e.g. radars), or components (e.g. tires).

A common characteristic in PBL is the collaborative – and often long-term – relationship between the customer and industry, structured as public-private partnering. In product support, PPP is understood by US DoD as “a cooperative arrangement between an organic product support provider and one or more private sector entities to perform defence-related work, utilise DoD facilities and equipment, or both” (US DoD Public-Private Partnering for Product Support Guidebook). They allow the private sector to utilise existing organic facilities and infrastructure, which can have several benefits e.g. avoidance of capital investments, reduction of operating costs, access to laboratories and trained organic work force, or establishment of collaborative relationships between the public and the private sectors. Partnerships can provide synergies that neither partner could generate separately.

Public-private collaborations in the defence sector were not implemented only in the context of PBL. They were also used e.g. in cyber-defence, humanitarian assistance and disaster relief, military medicine, or to facilitate cooperative R&D – to name just a few.
With various governance models, and perhaps not always “perfect”, PPPs have generally proven their utility by leveraging competence, infrastructure and best practices from both the public and private sectors.

Defence industries are particularly well placed to activate in a public-private partnering framework. Traditionally subject to strict quality standards and a need to guarantee reliability of their supply chains, these industries remain strategic government partners not only to respond to sudden crises but also to anticipate and prepare for future ones.


Faced with looming economic recession, the lessons learnt from the Covid-19 crisis are vast and go beyond the question of public health. They include the issue of sustainable manufacturing capacity, security of supply and smart, well-structured, technological innovation.

Will defence industries be asked to pay a “COVID dividend” by our politicians, or will they be included in a societal dialogue to act upon these lessons learnt? The impact of major crises, and Covid-19 is one of them, is always considered in governments’ strategic defence reviews. Such crises can even trigger defence reviews outside the regular cycle. Under the pressure of the moment, temptation may be high to cut defence spending even more. In this case, it is urgent to stop and think twice.

Instead, decision-makers should ask how we can better use the potential of our defence industries. By their very nature, our defence industries have an extremely qualified work force and a thorough know-how of implementing technical civilian and military standards. Often, their manufacturing lines produce for both the military and the civilian sectors. There is even a high probability that, like “flexible manufacturing” in biodefence, defence industries can adapt and switch their manufacturing capacity to meet a more diverse set of needs than today.

Nonetheless, a prerequisite for this would be a first step made by the public sector in starting a dialogue regarding key technological areas and gaps where manufacturing and supply chain needs are not met at present. These should cover both potential requirements in civil emergencies as well as complex security requirements. Indeed, Covid-19 crisis showed us how much simple needs and supplies do matter. Moreover, political capital is often built on simple things. Health security, food, energy, communication, but also well-being and sports, they all matter and are a continuum to advanced technologies like AI or big data, which nowadays can be key to securing the former.

After the Cold War, defence industries were asked to diversify. Let us diversify smart, by leveraging the potential of Public-Private Partnerships where governance is assured, for example, by multinational agencies like the NATO Support and Procurement Agency or the European Defence Agency.

Manuela Tudosia is government af- fairs expert in defence, and contributor to the NATO Industrial Advisory Group and NIAG Industry Interface Group. She is also founder of the Pole CM [Civil-Military Innovation Network], initiative that provides strategic advice to Small- and Medium- Sized Enterprises in defence.