German Defence Ministry punts key US defense-cooperation projects to the next government

By: Sebastian Sprenger

COLOGNE, Germany — The German Defence Ministry will leave planned air defense investments and other high-profile programs involving U.S. vendors unresolved in the final months of the Merkel government, officials have told lawmakers.

A Feb. 3 list of “important” but unfunded programs, as officials wrote, includes several trans-Atlantic defense efforts that have been simmering for some time. As a result, American contractor behemoths Lockheed Martin and Boeing are left to wait until a new government re-litigates Germany's defense acquisition posture sometime after the Sept. 26 election.

Lockheed Martin, along with MBDA Deutschland, has been gunning for a contract on the TLVS missile defense program following more than a year of negotiations and several years of German-American co-development. The program's prospects turned dimmer last fall, as new requirements drove up costs. Unsurprisingly, TLVS now officially appears on the to-do list for the next chancellor.

Notably, a project aimed at defending against short-range aerial threats, like drones or mortar fire, is also lacking a budget, defense officials wrote to lawmakers.

Defence Minister Annegret Kramp-Karrenbauer late last year reframed Germany's air defense requirements as needing greater focus on drone threats, as evidenced by the Nagorno-Karabakh conflict. She said a wholesale evaluation of the entire weapons portfolio would determine the way ahead, including what systems the Bundeswehr needs to counter threats of different sizes from various distances.

Whatever happened with the review, it appears it did not spur an appetite to start something new soon. That leaves Germany's fleet of Patriot systems, along with a limited order of counter-drone systems made by Kongsberg and Hensoldt aimed at fulfilling Germany's commitment to NATO for 2023, as the baseline equipment for the time being.

Lockheed also must wait for what happens next in the Bundeswehr's heavy transport helicopter program, which is meant to replace the fleet of CH-53G models. The Defence Ministry effectively halted the acquisition process last fall after Lockheed and Boeing went over budget with their custom offers of the CH-53K King Stallion and the CH-47 Chinook, respectively.

German defense officials recently requested information from the U.S. Defense Security Cooperation Agency about buying more standard, and presumably cheaper, versions of the desired aircraft instead.

In response, Lockheed launched a formal protest, which is now on the docket of the Federal Cartel Office, as newspaper Die Welt first reported. Company officials said they want to get a ruling of whether Berlin walking away from the purchase altogether was in line with fair-competition rules.

German acquisition laws make it difficult for companies to protest when the government chooses not to award any contract at the end of a competition, said Christian Scherer, a public procurement expert with the law firm CMS Germany in Cologne. “Generally speaking, you can't force the government to buy anything,” he said. “But bidders might have compensation claims.”

Judging offers as economically unfeasible, for example, could qualify as a valid reason for the government to withdraw, Scherer told Defense News.

At the same time, there is a legal path if companies suspect abusive implementation of the rules, especially if the government's requirements remain the same, he added. Those rules exist to protect offerers against favoritism and other forms of manipulation. “You can't go ahead and compete the same thing with the intention to award the contract to your preferred bidder.”

Finally, Germany's long-term campaign of replacing its fleet of Tornado combat aircraft will remain untouched during the final months of the Merkel era, according to the Defence Ministry. Defense officials last spring settled on a mixed fleet of mostly Eurofighters plus a smaller number of Boeing-made Super Hornets for electronic warfare and nuclear missions.

The decision has morphed into something more akin to a mere recommendation that would require years to play out, leading Eurofighter maker Airbus to hold out hope that U.S. manufacturers can be entirely kept out of the business when all is said and done.

Tobias Lindner, a Green Party member of the Budget and Appropriations committees in the Bundestag, said the list of unfunded programs is “almost more interesting” than the acquisitions considered doable by the time the Bundestag session ends in late June.

With so many big-ticket programs in limbo (15 overall), Kramp-Karrenbauer could move to set priorities and cut needless projects. “Unrealistic announcements and promises weaken trust within the armed forces and with our allies,” Lindner said.

https://www.defensenews.com/global/europe/2021/02/05/german-defense-ministry-punts-key-us-defense-cooperation-projects-to-the-next-government/