Pooling Demand: Finding best practice and fostering progress

Brussels - 8 August 2012 European Defence Agency News

In times of austerity, Ministries of Defence must find more efficient and effective ways to procure. Pooling Demand with a view to common procurements, particularly in the field of off-the-shelf purchases, offers considerable opportunities to increase the effectiveness of defence spending, while boosting interoperability. Equally, Pooling Demand helps counter fragmentation and small orders, helping the European defence industry plan better and seek economies of scale – thereby enhancing the global competiveness of the European defence technological and industrial base, which is a crucial element for long term security of supply. It is for these reasons that Pooling Demand was named a key enabler for multinational cooperation by the EU Council of 22 March 2012.

The European Defence Agency has been at the forefront of pooling demand: its Effective Procurement Methods project is already delivering results, with the launch of two pilot cases in recent months. In association with the European Defence Agency and the Egmont - Royal Institute for International Relations of Belgium, the Cyprus EU Presidency is organizing a high level seminar entitled: "Innovative European Defence Cooperation - Pooling and Consolidating Demand."

The seminar will bring together policy makers and senior level experts from governments, industry and institutions to discuss on-going efforts, and to identify those areas where future work would be needed to further implement and complement these initiatives.

Pooling Demand: Designed for Member States

Pooling of Demand is driven by the Member States. Member States have to identify the areas they are willing to cooperate on, find the appropriate partners and decide on how to structure such a cooperation. The EDA through its Effective Procurement Methods workstrand is on hand to offer its expertise and assistance throughout this process. This flexible, Member State-driven approach ensures that Pooling Demand delivers clear benefits. Some Member States have already gained concrete experience in pooling demand, either in the role of a lead nation managing common demand on behalf of others or as country benefitting from the purchasing services of another country or international body, like the EDA. It is now about sharing these experiences and identifying improvements to existing processes, for the benefit of Member States.

From Common Demand to Common Action

Finding the right subjects for Pooling Demand is one of the biggest challenges in the process. It is not only about selecting which goods and services to procure, but also about finding an appropriate composition of beneficiaries for a procurement. Cooperative programmes of the past have not automatically led to more effectiveness or efficiency.

Therefore, we will have to openly assess the different possibilities and challenges. Comparing governmental and industrial perspectives will help identify promising areas for Pooling Demand and – just as importantly – detect areas which are not ready to be included in such efforts.

Once, based on consolidated requirements, common demand has been detected, such demand has to be translated into actual cooperation. Working together in the EDA framework is certainly one of the options. But there are a number of other possibilities that may be equally appropriate and worth exploring. At the end of the day, Member States have to identify their preferred collaborative vehicle for a given case.

Learning from past experience and building best practices in this regard will help avoiding some of the challenges encountered by past cooperative initiatives. Eventually, through optimising cooperation – in procurement and beyond – we will be able to make common efforts more and more attractive. By this, we would contribute to bridge the gap between the common political will for more Pooling of Demand and its practical and concrete implementation.