EU launches new initiative to open up defence market

Fifteen of Europe's biggest defence companies have posted tenders offering defence contracts through a business-to-business web portal set up by the European Union on Thursday to open up the European military equipment market to more cross-border competition.

The Electronic Bulletin Board (EBB) created by the European Defence Agency (EDA) allows subcontractors to browse tenders posted by bigger defence companies and apply for the contracts.

European Union and industry officials said the aim was to provide a one-stop-shop for smaller companies looking for defence business opportunities.

"This could change the way we do business," said Miroslav Tieff, of B.O.I.S.-Filtry, a Czech company specializing in protective clothing. "Until now, finding export opportunities was so complicated that it was often just not worth the effort."

BAE Systems PLC led the charge among Europe's major defence firms to post tenders on the new portal. The British company advertised 13 contract opportunities on the EDA EBB for equipment ranging from tenting for its Panther light vehicles to rudders for frigates.

Other companies participating include EADS, Saab AB and Dassault Aviation. In total, 76 tenders were posted on the site's first day.

The new business-to-business portal extends a system launched in July where governments from 22 European nations post defence contracts, an initiative aimed at opening up the EU's multibillion dollar annual defence market to greater cross-border competition.

EU governments have long been able to protect national defence industries because of clauses in the Union's treaty which largely exempt military contracts from rules that have torn down barriers to trade in other sectors.

Last year, faced with mounting complaints that such protectionism was hindering efforts to strengthen the European industry against international competitors, all but five of the EU's member nations agreed to a "code of conduct" to open up their markets by offering EU-wide tenders.

"We want to reinforce the industry in Europe to be on the same level playing field as the Americans," said Charles Edelstenne, chairman and CEO of Dassault, who pressed the button that activated the new system at the Brussels headquarters of the European Defence Agency.

Ahead of the launch, armaments directors of the 22 participating countries met to assess the performance of the system set up last year for government defence contracts.

They said it was too early to assess how successful the system has been. Although about 140 contract opportunities have been posted, worth an estimated €6.5 billion, only four contracts had been awarded — all by the Polish government to Polish companies who were the only ones competing.

"We must wait a little longer to be sure that cross-border advertising is followed by cross-border contracts," said Eero Lavonen, a Finnish defence officials who chaired the meeting. "But already defence procurement in Europe is becoming more open."

All EU nations are taking part in the new system except, Denmark, Spain, Hungary, Romania and Bulgaria who have so far opted-out.

Source: Associated Press

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