The Strategic Chessboard: Understanding the Intricacies of Arms Procurement
Arms procurement, in a narrower sense as a component of defense procurement, is exclusively related to the acquisition of goods and services designed or intended for military purposes. This category includes weapon systems, such as submarines, fighter jets, armored vehicles, munitions, missiles, and related services. One could argue that this specific definition also encompasses the procurement of “dual-use” technologies — technologies with potential applications in both military and non-military contexts. However, this inclusion depends on the primary purpose of acquisition being for military use and any required modifications to the specifications of these “dual-use” technologies to meet military requirements.
While some might think that buying weapons is as straightforward as acquiring a company vehicle or shopping for household items, the reality is quite different. Arms procurement involves a complex and lengthy process. It requires a thorough analysis of the weapon systems, considering factors like a country’s political stance, geopolitical situation, internal stability, economic capability, trade balances, embargoes, treaties, regulations, intelligence, security, and even the buyer country’s industrial capabilities when technology transfer is part of the deal. The entire arms procurement process can take years, sometimes even exceeding the term of a president. The already intricate process becomes significantly more challenging when the buyer is a third-world country seeking to procure weapon systems from developed Western countries like the United States or the United Kingdom.
Because of the lengthy and intricate process, arms procurement is typically initiated years in advance, especially as regional or global tensions begin to escalate but before they escalate into active open conflicts. This proactive approach ensures that the country’s armed forces are prepared and not caught unprepared at the onset of hostilities. Furthermore, weapon systems acquired through arms procurement can serve as a deterrent against external or internal forces seeking to harm the country. Hence, the phrase “Si vis pacem, para bellum,” which translates to “If you want peace, prepare for war.”
State arms procurement is typically managed by the country’s Ministry of Defense. In certain instances, individual branches of the armed forces may handle arms procurement independently.
The lengthy and complicated process of arms procurement is summarized in the following steps. This article will delve into each step in-depth.
1. Assessment of Requirements
2. Strategic Planning
3. Request for Information (RFI)
4. Request for Proposal (RFP)
5. Technical Trials and Selection
6. Letter of Intent (LOI) and Sale Acceptance
7. Budget Allocation and Financial Negotiation
8. Memorandum of Understanding (MOU)
9. Contract Signing
10. Payment and Delivery
11. Acceptance and Integration
12. Logistics and Conversion Training
1. Assessment of Requirements
This step is commonly referred to as the Defense White Paper formulation. A Defense White Paper is a comprehensive government document that outlines a nation’s defense and security policies. Typically released by the defense ministry or a relevant government department, this document serves as a strategic framework for the country’s defense priorities, military capabilities, and potential threats. A Defense White Paper provides an in-depth analysis of the geopolitical environment, the nation’s security posture, and the rationale behind military capabilities and acquisitions. Key elements often covered in a Defense White Paper include assessments of current and future security challenges, strategies for addressing them, and the allocation of resources for defense purposes. It acts as a crucial communication tool, informing the public, military, and the international community about a country’s defense policies and priorities.
2. Strategic Planning
The government or relevant defense authorities develop a strategic plan outlining defense priorities and objectives, specifying the types of weapons and equipment needed. Typically, this strategic plan is based on the nation’s defense white paper. In its formulation, not only the Ministry of Defense and the armed forces but also the executive and legislative branches of the country are involved. As an example, the Indonesian government, aiming to modernize its armed forces following embargoes in the late 90s and early 2000s, crafted a plan known as the Minimum Essential Force (MEF). The MEF is a series of long-term arms procurement plans designed to equip the Indonesian National Armed Forces with the essential minimum equipment required for defending the national territory of Indonesia.
3. Request for Information (RFI)
The government releases a Request for Information (RFI) to collect information from potential suppliers regarding their available products and capabilities. This step aids in gaining insights into the market and exploring available options. As an illustration, a specific government issued an RFI for a procurement of new multirole combat aircraft (MRCA), specifying requirements such as the aircraft being dual-seater, having a range of 1000 km, and easy to maintain
4. Request for Proposal (RFP)
Based on the information collected from the RFI, the government issues a formal Request for Proposal, outlining specific requirements, technical specifications, and terms and conditions. Vendors or defense contractors submit their proposals in response to the RFP. The government evaluates these proposals based on various criteria, including technical capabilities, cost, and other relevant factors. For instance, to respond to a Request for Proposal (RFP) from a specific country seeking to acquire new Multirole Combat Aircraft (MRCA), companies like Lockheed Martin, Dassault Aviation, and Sukhoi, represented by United Aircraft Corporation, submitted their proposals.
5. Technical Trials and Selection
The government proceeds to conduct technical trials to assess the proposed weapon systems. Often, the suggested systems are brought to the country and subjected to testing in diverse and challenging conditions. These tests encompass evaluating operational capability, ease of operation by less-trained crews, and assessing the durability and endurance of the weapon system. Multiple weapon systems are pitted against each other in these trials, aiming to determine the most suitable system to operate effectively within the country’s specific conditions.
In some cases, countries may opt to bypass this process, as they have already assessed the weapon system’s capabilities through its real-world performance on the battlefield. This evaluation could involve deploying military attaches to ongoing conflicts or reviewing combat reports related to specific weapon systems.
6. Letter of Intent (LOI) and Sale Acceptance
In the majority of arms procurement cases, steps one and two have already been established, and steps three and four are often omitted. Furthermore, step five is typically conducted through paper evaluation rather than actual testing. As a result, this step marks the initial phase for most arms procurements.
After selecting a particular weapon system or preferred vendor, negotiations ensue. Once the terms are agreed upon, a Letter of Intent (LOI) is issued, signifying the government’s intent to proceed with the purchase and outlining the key terms of the agreement. The LOI includes specifications of the weapon system, logistics, quantity, and additional components.
The LOI undergoes evaluation by the recipient country’s organization assigned to assess the feasibility of selling the weapon systems. This involves a comprehensive exploration of potential outcomes, including alignment with the seller country’s foreign policy goals, impact on the buyer’s military capability, influence on the basic military balance in the region, and effects on the seller country’s defense readiness. The organization then presents its findings to the country’s government body/ministry and legislative body with the authority on the matter. Subsequently, the government body decides whether to approve or reject the sale.
For instance, in 2022, the Indonesian Ministry of Defense issued an LOI to procure the newly-designed Boeing F-15EX Eagle II from the United States with specific modifications, resulting in the modified weapon system known as F-15ID. The United States Defense Security Cooperation Agency (DSCA) evaluated the potential sale and forwarded it to the United States Department of State and Congress. Following this, both the Department of State and Congress approved the potential sale.
7. Budget Allocation and Financial Negotiation
After the potential sale receives approval from the seller’s country, the Ministry of Defense of the potential buyer country will then relay the potential sale to the country’s Ministry of Finance. Together, both ministries will explore and formulate strategies to fund the arms procurement. Due to the expensive nature of weapon system, other than the country’s annual budget, funding sources may include internal loans, soft loans from the seller country, external loans from overseas banks, or the export of materials to the sellers’ countries through trade balances, among others. Sometimes, due to the nature of the payment, other ministries such as the Ministry of Foreign Affairs and Ministry of Industry may also be involved. Throughout this process, the payment scheme is continually negotiated with the seller’s country, aiming to lower the overall selling price or maintain a low-interest rate. Also in this process, depending on the nature of the sale, the Ministry of Defense may appoint a company to act as an intermediary for the purchase. This intermediary role can potentially inflate the overall sales cost.
8. Memorandum of Understanding (MOU)
In certain instances, a Memorandum of Understanding (MoU) may be executed between the purchasing country and the supplying country or company. This document delineates the overarching terms and conditions of the deal, encompassing legal and financial aspects. At this stage, negotiations are ongoing, specifically concerning the financial aspects and potential bonuses associated with the purchase. Throughout this process, decisions are also made regarding which local companies will receive knowledge and technology transfers to enable them to maintain or even offset some degree production of the weapon systems. This determination is carried out through a direct examination conducted by representatives of the weapon producer.
The time required to progress from the Letter of Intent (LOI) step to the Memorandum of Understanding (MOU) step can span months or even up to a year. In many instances, arms procurement processes get stuck at the LOI or financial allocation stage, leading to eventual cancellations or scrapping of the procurement.
9. Contract Signing
Detailed negotiations continue, leading to the finalization of a formal contract. This contract outlines the specifics of the purchase, including quantities, delivery schedules, warranties, and payment terms. The signing may be delayed and take years after the signing of the Memorandum of Understanding (MOU) due to the back-and-forth nature of negotiations.
10. Payment, Production, and Delivery
The purchasing country initiates the agreed-upon payments. Following the down payment for the purchase, the production of the weapon system commences. The production and delivery timeline for the weapon system can vary based on its type. For individual weapon systems like firearms, the production time may extend up to a year. In the case of tanks, the production period may extend to two years or more. The longest production time is for ships and aircraft, which may take up to five years or more to be delivered. The extended delivery time is influenced by factors such as an already busy production line, the commonality of small production lines in Western military industrial complexes, the complexity of the weapon system, and other related factors.
For instance, India signed a contract for the procurement of 36 Dassault Rafale fighter jets in 2016. The first Rafale destined for the Indian Air Force was delivered in 2020, with the entire batch completed in 2022. The entire production time required for the sale spanned six years.
11. Acceptance and Integration
The procured weapons or equipment undergo acceptance testing, and they are integrated into the country’s military forces. The certification and testing processes are conducted by the country’s regulatory body. For example, in Indonesia, the regulatory body responsible for certifying military aircraft is the Indonesia Defense Airworthiness Authority (IDAA/IMAA). The certification process alone may take a year, in conjunction with the integration process.
12. Logistics and Conversion Training
Logistics support and training programs may be included in the procurement deal to ensure that the military can effectively use and maintain the acquired assets. The conditioning of local industrial and infrastructure capability begins immediately upon signing the contract. This process may necessitate the development of new infrastructure and the introduction of new technologies. Local maintenance companies and even the military’s own logistical and maintenance units are often heavily involved in this phase. Simultaneously, training for the actual crew and maintenance staff of the weapon system commences immediately after contract signing. Over the five to six years of waiting, the crews undergo training abroad to ensure they are proficient in operating the weapon system as soon as it is delivered.
Conclusion
In the world of acquiring weapons, countries strategize like a chess game, carefully weighing each move’s impact on their defense and global position. It’s more complex than everyday shopping, involving thorough planning, negotiations, and international collaboration. This process stretches over years, often surpassing a president’s term, underscoring the proactive nature of gearing up for potential conflicts well in advance. Spearheaded by the Ministry of Defense, this intricate journey encompasses financial talks, contract signings, and ensuring the weapons meet stringent standards. As these weapons integrate into a country’s military, the effects ripple beyond defense, shaping local industries and the broader global landscape. Thus, acquiring weapons isn’t a straightforward task; it demands thoughtful consideration to safeguard a country’s interests in a dynamic and evolving world.
