Select Committee on Defence Appendices to the Minutes of Evidence

Memorandum submitted by Hunting plc on OCCAR (12 August 1999)

  I have pleasure in replying to your letter of 20 July 1999 concerning OCCAR (Organisation Conjointe de Cooperation en Matiere d'Armement).

  In general, we would welcome the establishment of an effective European Procurement Agency to cover those requirements where two or more European nations have a common requirement, provided that the Agency could be empowered to conduct its business without constant referral to each of the participating nation's own procurement agency.

  In answer to your specific questions, I would reply as follows:

OCCAR track record and function

  Whilst we have had no direct involvement with OCCAR other than briefings by OCCAR representatives, it would seem that, apart from MRAV, little change has occurred in the way in which the collaborative programme offices, such as PBFA and BTP assigned to OCCAR operate. They continue to be located remotely from OCCAR HQ.


  We have been aware of the convention, but I am not aware of any official consultation request.

Provisions of the Convention

  It would seem that the Board of Supervisors has reserved considerable executive power to itself. It would seem, therefore, that decisions on contract award are likely to be subject to considerable political interference. We would prefer to see that the convention required delegation of much greater authority to the director of the executive administration and the director of OCCAR, subject to increased accountability regulations which would ensure that contracts were awarded on a broad best value for money criteria.

  OCCAR should be required to operate against a set of standard conditions of procurement in the similar way in which the European Space and Technology Organisation functions.

Structure and Legal Basis

  See above. Consideration should be given to introducing a PFI mandate into OCCAR.

Extending Membership of OCCAR

  We would have no objections to extending membership of OCCAR to include all representatives and WEU nations who wish to take advantage of co-ordinated European procurement provided that adequate degrees of freedom are granted to the executive administration.

Rationalisation of European Defence Procurement

  We recognise that any agreement to move towards a European Procurement Agency has to be on the basis of compromise and the test should be whether or not the customer will obtain better value for money. We have experience of dealing with the European Space Agency where it would seem that the member states' ability to politicise procurement decisions may detract from the value for money given by central procurement. However, we would accept that there are winners and losers and that the small states probably obtain significant benefits. From an industrial point of view, the benefits of an efficient procurement organisation lie in shortening the procurement process as recognised in the UK Smart Procurement Initiative.

  We consider, therefore, that OCCAR could present a sensible approach to rationalisation of European collaboration, provided that sufficient degree of freedom can be granted to the procurement agency.

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