ComDef 2013

Italian Ministry of Defense procurement system Major procurement programs

Maj.Gen. Giovanni FANTUZZI Washington DC, 04th September 2013 SECURITY

THE BRIEFING IS UNCLASSIFIED

AGENDA

• Overview

• Defense Organisation - SGD/DNA

• Defense Acquisition Programs process

• Major Programs

• Conclusions

3/37 SCENARIO

SAFETY Economic / financial crisis

Globalization Unpredictability of threats

Removal of sovereignty Multiple generators of instability

GLOBAL SAFETY

MODERN AND TIME CONSTRAIN FOR DEPLOYABLE SYSTEMS INSTRUMENT MODERNIZATION 4/37 ARMAMENTS POLICY

GOVERNMENT CABINET DIRECTIVE: MILITARY POLICY FOR THE YEAR 2013

5/37 MAIN PLAYERS

Minister of Armed Forces Defense Staff Defense Staffs

Policy and requirements

Product &Tecnology Ministry of Economy and Finance

National Industry Ministry of Economic Development University and Ministry of Foreign Reserach Centers Affairs Countries, Agencies and International Org. Analysis and Assesment Procurement Technical Industrial Sector Directorates 6/37 DEFENSE ORGANISATION

MINISTER

STAFF OFFICE UNDERSECRETARIES

2 CENTRAL OFFICES

CHOD SGD/NAD ONLY TECHNICAL-OPERATIONAL

Chief AIR Chief SEA

5 D.T. 4 D.G.

Chief LAND Chief CC TECHNICAL-OPERATIONAL AREA TECHNICAL-ADMINISTRATIVE AREA

7/37 GENERAL SECRETARIAT FOR DEFENSE/DNA

SECRETARY GENERAL OF DEFENCE AND NATIONAL ARMAMENTS DIRECTOR

Deputy SG Deputy SG/DNA

I DEPARTMENT II DEPARTMENT III DEPARTMENT IV DEPARTMENT V DEPARTMENT PERSONNEL ADMINISTRATION INDUSTRIAL POLICY AND MAJOR ACQUISITION TECHNOLOGICAL INTERNAT. RELATIONS PROGRAMS INNOVATION

PERSOMIL PERSOCIV PREVIMIL TELEDIFE TERRARM NAVARM ARMAEREO

COMMISERVIZI GENIODIFE 8/37 PROCUREMENT: MAJOR HIGHLIGHTS

 Market research in the international arena

 Domestic industry involvement in Operational international programs Requirements  Search for economies of scale

 Economic returns in the case of exports (Royalty) Acquistion Program  Back with technological impact on employment

 Raising the professional level of Growth personnel (government and industry) Country’s System  Addressing industry to seek efficiency and international competitiveness

 Involvement in complex programs also for small and medium-sized enterprises (SMEs). 9/37

PROCUREMENT: ORGANISATIONAL STRUCTURES

PRAGMATISM, FLEXIBILITY, INTERDISCIPLINARY

PROCUREMENT DYNAMIC, TIMELY, EFFICIENT

Area Procurement

Area Joint Industry Staff

GIP DzP 10/37 GENESIS OF A PROGRAM

ROP

Approval Operational Requirements and Priorities First technical solutions feasibility

Operational Requirements

COVIRO

CHOD Approval

Procurement COVIRO: Joint Evaluation Committee of Operational Requirements 11/37 ACQUISITION ITER

DEFENCE GENERAL PLAN (PG-001)

APPROV GIP E

EO ROP ROD TECH SPEC

Pre-feasibility Feasibility/definition

DT GIP DzP

DEVELOPMENT REQUIREMENT PLANNING RESEARCH $ PRODUCTION SERVICE

SYSTEM LYFE CYCLE (RIF. SMD – L- 001)

12/37 DEFENSE INVESTMENT BUDGET

5 1.4 4 1.7 3 MiSE budget 2 3.5 Defense Budget 2.5 1

Mld € 0 2012 2013 (4,2 mld €) (4,9 mld €)

13/37 TOTAL DEFENSE BUDGET 2008 - 2012

10000 71% 67% 66% 67% 66% 9000 59% 8000

7000 6000

5000

4000 24% 24% 3000 22% 24% 17% 20% 2000 18% 13% 12% 11% 10% 1000 9%

0 2008 2009 2010 2011 2012 2013 Data in M€ Personnell Operation Investiment 14/37 MULTINATIONAL COOPERATION

CNAD

OCCAR LoI EDA European Commission

MULTI / BILATERAL COOPERATION

15/37 DEFENSE INDUSTRY

joint ventures alliances

acquisition

Transnational Dimension Geographical Capital distribution

16/37 DEFENSE INDUSTRY

National Defense Industry Market

Borders Limited

only the most competitive industries, therefore, will be able to survive

17/37 SMALL-MEDIUM NATIONAL INDUSTRY

TREVISO VICENZA LECCO MILANO BOLOGNA

PERUGIA

ROMA ENTERPRISE LATINA NAPOLI BRINDISI

CREATIVITY

INNOVATION

18/37 DEFENSE vs INDUSTRY

common objectives, even in the presence of different assumptions and purposes

DEFENSE INDUSTRY the best system, timely at the best economic conditions, to ensure the maximum economic return, country's security, and to be able to with access perform the assigned task, in to the internal market and, accordance with international above all to the international one commitments 19/37 PROCUREMENT PROGRAMS Italian Armed Forces Procurement Programmes ≈4.5 Billions €/year

IT-MOD Releasable to SEDENA Land Programmes

NEW ARMOURED VBM “FRECCIA” 8x8 PZH 2000 MLRS VEHICLE “CENTAURO”

THALES IT – CASSIDIAN - KRAUSS OTO MELARA – KRAUSS IVECO - OTO MELARA IVECO - OTO MELARA MAFFEI WEGMANN – THALES FR MAFFEI WEGMANN CONSORTIUM CONSORTIUM

MLTV “LINCE” MLTV - AMBULANCE NEC FORCE FUTURE SOLDIER

ITALIA INDUSTRIES OF MARCONI SELEX COMM. IVECO IVECO - OTO MELARA CONSORTIUM FINMECCANICA GROUP LARIMART – GALILEO AVIONICA BERETTA - SISTEMI COMPOSITI – AEROSEKUR Naval Programmes

FREMM U212A MU-90

ORIZZONTE S.N. FINCANTIERI WASS (ITA) DCNS (FRA) General Submarine Consortium (GER) THALES, DCNS (FRA)

BLACK SHARK VULCANO STRALES

WASS OTO MELARA OTO MELARA Fixed-Wing Aircraft Programmes

EF2000 JSF C-27J

EUROFIGHTER (industrial leader) ALENIA AERONAUTICA EUROJET and ALENIA ERONAUTICA

MPA INTERIM AEJPT M346 ITS

ALENIA AEM AEM Rotary-Wing Aircraft Programmes

NH-90 CH-47F AW101 CSAR

AGUSTAWESTLAND AGUSTAWESTLAND AGUSTAWESTLAND Missile Programmes

METEOR FSAF MEADS

MBDA/ITA-MABDA/FRA-THALES MBDA ITALIA MBDA ITALIA

NATO ALTBMD & Territorial MD

SELEX SI in 2 Multinational Consortia (SAIC Team & TRS Team) Space Programmes

SICRAL2 ATHENA-FIDUS COSMO - SKYMED

THALES ALENIA SPACE IT THALES ALENIA SPACE IT TELESPAZIO TELESPAZIO

HELIOS MUSIS VEGA

ASTRIUM THALES ALENIA SPACE TELESPAZIO THALES ALENIA SPACE E.L.V. (AVIO – ASI) TELESPAZIO S.p.A. RPS Programmes

PREDATOR A & B AGS TACTICAL RPS

15 NATO NATIONS

GENERAL ATOMICS AERONAUTICAL NORTHROP GRUMMAN AAI SHADOW 200 SYSTEMS INC. (industrial leader)

ASIO B – SELEX ES STRIX-C – ALPI AVIATION FALCO – SELEX ES

C4ISTAR Programmes

DEFENCE INFORMATION SOFTWARE DEFINED RADIO INFRASTRUCTURE • NATIONAL SDR • ESSOR (6 UE NATIONS ) • COALWNW (9 NATIONS)

SELEX ES INDUSTRIES/CONSORTIA TO BE SELECTED SICOTE 2 MAJIIC WI MAX + NC3A Air Defence Radar Network

SELEX ES SELEX ES VITROCISET COASTAL RADAR NETWORK Interministerial System for COUNTERFIRE RADAR Maritime Surveillance

SELEX ES SAAB MICROWAVE SYSTEMS ENGINEERING - IDS SELEX ES CONCLUSIONS

30 CONCLUSIONS

• We are facing a lot of difficult challenges • Procurement must adapt with agility to the evolving scenarios • Less overhead • Lean structure to contribute to a Whole of Government approach • Better adherence to affordable and sustainable Requirements • Importance of EU and transatlantic cooperation

31 CONCLUSIONS

• In time of scarce resources in presence of complex and unpredictable threats, the Italian Armed Forces are Transforming while Operating • Transformation to enhance operational capabilities and quality of the military • The Italian Armed Forces commitment is strong and determined

32 Quote of the Day

“The one who adapts his policy to the times prospers, and likewise that, the one whose policy clashes with the demands of the times does not.”

Niccolò Machiavelli 1469-1527

ACQUISITION ITER: PARLIAMENTARY CONTROL

New Capabilities Increase and Upgrading L. 436/88 (Giacchè)

~15 mo. MINISTERIAL DECREE APPROVAL AND NATIONAL ACCOUNTS SYTEM RECORDING PARLIAMENT (COMMISSIONS) 60 DAYS

INTERNATIONAL

CHIEFS OF STAFF COMMITTEE MoU Sign NATIONAL acquisition by Int Agency or Lead Nation ROD/JORD Approved by CoD

RFQ issuance Offers Assesment Market Analysis Contract Signature and National Account System (RFI) by GIP Recording (SGD lead)

35/37 FUNDING

36/37 KEY ALLIANCES KEY ALLIANCES

ELECTRONICS SPACE SATELLITES AERONAUTICS MISSILES

THALES ALENIA ELETTRONICA SPACE TELESPAZIO MDBA SUKHOI CIVIL AIRCRAFT COMPANY FINMECCANICA 25%

FINMECCANICA SUKHOI 75% FINMECCANICA 31% 25% FINMECCANICA FINMECCANICA 33% 67% ATR FINMECCANICA 50% THALES BAe ALENIA EADS 50% SYSTEMS SPACE 33% 37,5%

EUROFIGHTER THALES THALES FINMECCANICA (AZIONISTI ALENIA ALENIA 21% SPACE 67% SPACE 33% PRIVATI) BAE SYSTEMS EADS 37,5% 36% 33% EADS 46%

38/37 CONCLUSION

SCIENTIFIC AND TECHNOLOGICAL MODERNIZATION

INDUSTRY RATIONALISATION AND ACCURACY IN GLOBALISATION OPERATIONAL REQUIREMENT

Country INDUSTRIAL COMMON POLICY ARMED System’ DEVELOPMENT FOR ARMAMENT FORCES MATERIAL USER AND Growth «TEST BED» POLITICAL SUPPORT FOR THE SUCCESS OF INDUSTRIAL POLICY EVOLUTION IN THE FIELD OF DEFENCE TROUGHOUT PRODUCTION

OPERATIONAL REQUIREMENT SATISFACTION

39/37