III. The State–Defence Industrial Relationship: Government as Sponsor

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Notes

¹ By ‘sponsor’ the authors mean simply government's commitment, or otherwise, to support and promote defence industries through the generation of tailored policies, processes and activities.

² See James F Nagle, A History of Government Contracting (Washington, DC: George Washington University Press, 1999).

³ For a historical perspective on this point, see Merton J Peck and Frederic M Scherer, The Weapons Acquisition Process: An Economic Analysis (Cambridge, MA: Harvard University Press, 1962). See also Eugene Gholz, Harvey Sapolsky and Caitlin Talmadge, U.S. Defence Politics: The Origins of Security Policy (New York, NY: Routledge, 2008).

⁴ See Terrence R Guay, Globalization and Its Implications the Defence Industrial Base (Carlisle, PA: Strategic Studies Institute, US Army War College, February 2007).

⁵ For a general discussion of the complexities of defence and security questions in periods of government austerity, see Michael Codner and Michael Clarke (eds), A Question of Security: The British Defence Review in an Age of Austerity (London: I B Tauris, 2011). See also Mark Abramson and Roland Harris, The Procurement Revolution (Lanham, MD: Rowman and Littlefield, 2003). A good contextual comparative volume is Ethan B Kapstein, The Political Economy of National Security: A Global Perspective (Columbia, SC: University of South Carolina Press, 1991).

⁶ GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-07-406SP (Washington, DC: GAO, March 2007).

⁷ See Department of Defense, ‘Quadrennial Defense Review Report’, February 2006.

⁸ See GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-08-467SP (Washington, DC: GAO, March 2008).

⁹ See National Research Council of the National Academies, Science and Security in a Post-9/11 World (Washington, DC: National Academies Press, 2007).

¹⁰ See Jacques S Gansler, Democracy's Arsenal: Creating a Twenty-First-Century Defense Industry (Cambridge, MA: MIT Press, 2011), p. 245. See also Paul Bracken, Technological Innovation in National Security (Philadelphia, PA: Foreign Policy Research Institute, 2008).

¹¹ See International Institute for Strategic Studies, The Military Balance 2011 (London: Routledge, 2011).

¹² Based on the United States' national defence budget estimates for the fiscal year 2006–07, Office of the Under Secretary of Defense (Comptroller), April 2005. See Gansler, Democracy's Arsenal, p. 254.

¹³ See National Research Council of the National Academies, Beyond Fortress America: National Security Controls on Science and Technology in a Globalized World (Washington, DC: National Academies Press, 2009).

¹⁴ See David Mowery, Military R&D and Innovation (Berkeley, CA: University of California Press, 2008), p. 19.

¹⁵ See Department of Defense, ‘Annual Industrial Capabilities Report to Congress’, March 2008.

¹⁶ See Gansler, Democracy's Arsenal, p. 268.

¹⁷ For a discussion of this point see the Centre for Strategic and International Studies, ‘Globalization, Technological Leadership and Risks to the U.S.’, June 2004.

¹⁸ Accruals accounting was introduced in the 1990s to replace cash accounting as part of the UK's new public-management reforms. See Bill Kincaid, Dancing with the Dinosaur: How to Do Business with MoD in the Smart Procurement World (Newcastle-upon-Tyne: UK Defence Forum, 1999).

¹⁹ MoD, ‘Defence Technology Strategy for the Demands of the 21^st Century’, 2006, <http://www.science.mod.uk/modwww/content/dts_complete.pdf>, accessed 10 October 2013.

²⁰ MoD, ‘Innovation on Show from the Centre for Defence Enterprise’, 28 March 2012, <http://www.mod.uk/DefenceInternet/DefenceNews/EquipmentAndLogistics/InnovationOnShowFromTheCentreForDefenceEnterprise.htm>, accessed 10 October 2013; see also the CDE website, <http://www.science.mod.uk/engagement/enterprise.aspx>, accessed 10 October 2013.

²¹ MoD, ‘Defence Technology Centres’, <http://www.science.mod.uk/engagement/dtcs.aspx>, accessed 11 October 2013.

²² See, for instance, para. viii of the Executive Summary, MoD, National Security Through Technology: Technology, Equipment, and Support for UK Defence and Security, Cm 8278 (London: The Stationery Office, February 2012), p. 9.

²³ Bundesministerium für Bildung und Forschung (BMBF), ‘Ausgaben des Bundes für Wissenschaft, Forschung und Entwicklung nach Förderbereichen und Förderschwerpunkten’, <http://www.datenportal.bmbf.de/portal/Tabelle-1.1.5.html>, accessed 11 October 2013.

²⁴ By ‘cutting-edge’ the authors mean battle-winning technologies, when compared to the capabilities fielded by an adversary.

²⁵ See Bundesministerium der Verteidigung, ‘Ressortforschungsplan für 2013 ff’, 26 April 2013, pp. 5–6, <http://www.bmvg.de/resource/resource/MzEzNTM4MmUzMzMyMmUzMTM1MzMyZTM2MzIzMDMwMzAzMDMwMzAzMDY4NmE3MTcyMzY3ODZmNmEyMDIwMjAyMDIw/Ressortforschungsplan%20BMVg%202013%20ff.pdf>, accessed 15 October 2013.

²⁶ See Deutsche Bundesregierung, ‘Entwurf eines Gesetzes über die Feststellung des Bundeshaushaltsplans für das Haushaltsjahr 2013 (Haushaltsgesetz 2013)’, Bundestags Drucksache 17/10200, 10 August 2012, pp. 113–15.

²⁷ Fraunhofer VVS, ‘Fraunhofer Verbund Verteidigungs- und Sicherheitsforschung VVS 2012/2013’, p. 2, <http://www.vvs.fraunhofer.de/fileadmin/media/vvs/Downloads/2012_VVS_Broschuere_de_online.pdf>, accessed 11 October 2013.

²⁸ ‘The TIV is based on the known unit production costs of a core set of weapons and is intended to represent the transfer of military resources rather than the financial value of the transfer’. See SIPRI, ‘Explanation of the TIV Tables’, <http://www.sipri.org/databases/armstransfers/background/explanations2_default>, accessed 11 October 2013.

²⁹ The authors are grateful to Siemon Wezeman of SIPRI for his clear explanation of what SIPRI seeks to capture and how it is measured.

³⁰ See ‘Rede des Bundesministers der Verteidigung Thomas de Maizière vor dem Deutschen Bundestag zum Etat des Bundesverteidigungsministeriums am 7. September 2011’ (Translation by the authors).

³¹ See Robert Trice, ‘Globalisation in the Defense Industrial Base’, briefing to the Defense Science Board, Washington, DC, 11 December 2006.

³² Author's interview with a senior US defence industrialist, 6 November 2012.

³³ Lieutenant General Ross Thompson, testimony before the Senate Armed Services Committee, 24 January 2008. See also Commission on Army Acquisition and Program Management in Expeditionary Operations, ‘Urgent Reform Required: Army Expeditionary Contracting’, 31 October 2007.

³⁴ See Gansler, Democracy's Arsenal, p. 157.

³⁵ See Mark A Lorell and John C Graser, An Overview of Acquisition Reform Cost Savings Estimates (Santa Monica, CA: RAND, 2001).

³⁶ Figures quoted for 2006. See DoD, ‘Summary of Procurement Awards 2005–2006’, 2006.

³⁷ See Per Lundin, Niklas Stenlas and Johan Gribbe (eds), Science for Welfare and Warfare: Technology and State Initiative in Cold War Sweden (Sagamore Beach, MA: Watson Publishing, 2010).

³⁸ See Bundesministerium der Verteidigung, ‘Minister de Maizière billigt Umrüstung’, 21 October 2011, <http://www.bmvg.de/portal/a/bmvg/!ut/p/c4/NYuxEsIgEET_iIPGOHZiGgsb44zGjhCGnBJgLpfY-PFC4e7MK_bNwhNKo9nQG8YUTYAH9BYPw0cM8-bFK61UVrGgnRxNDnnJKSDjG-71OjphU3RcyS4yFnoynEjkRByqWYmKEThCL1WrpZL_qO_-cjvpbtc07VlfIc_z8Qec5KgJ/>, accessed 15 October 2013.

³⁹ Gemeinsame Konferenz Kirche und Entwicklung, ‘Rüstungsexportbericht 2012 der GKKE’, Berlin, 10 December 2012, p. 7.

⁴⁰ Spiegel Online, ‘Saudi-Arabien will erneut deutsche Panzer kaufen’, 2 December 2012.

⁴¹ Spiegel Online, ‘SPD kritisiert Bundeswehr-Hilfe für Panzer-Test’, 6 July 2012.

⁴² See Deutsche Bundesregierung, ‘Förderung von Rüstungsgeschäften und militärische Nachwuchsgewinnung auf der Internationalen Luft- und Raumfahrtausstellung 2012’, Bundestag Drucksache 17/10705, 14 September 2012, p. 2.

⁴³ See Deutsche Bundesregierung, ‘Auslandsreisen von Mitgliedern des Bundeskabinetts unter Begleitung von Rüstungslobbyisten’, Bundestags Drucksache 17/9854, 31 May 2012.

⁴⁴ BDSV, ‘Sicherheit made in Germany: Zeit für Veränderungen – Chancen erkennen und nutzen’, July 2010, p. 15.

⁴⁵ Angela Merkel, quoted in n-tv.de, ‘Instrument der Friedens-sicherung: Merkel wirbt für Rüstungsexporte’, 22 October 2012, translation by the authors.

⁴⁶ See Henrik Heidenkamp and Ferdi Akaltin, ‘Confronting the European Defence Crisis: The Common European Army in Germany's Political Debate’, RUSI Journal (Vol. 157, No. 2, April/May 2012).

⁴⁷ At the time of writing, German political parties are in the midst of post-election coalition negotiations.

⁴⁸ For details of DSO's structure and roles, see UK Trade and Investment (UKTI), ‘How We Can Help – UKTI DSO services’, 2 August 2013, <http://www.ukti.gov.uk/defencesecurity/item/107130.html>, accessed 11 October 2013; for information about the Industrial Engagement Policy, see UKTI, ‘Industrial Engagement’, 2 April 2013, <http://www.ukti.gov.uk/defencesecurity/defence/industrialengagement.html>, accessed 11 October 2013.

⁴⁹ See John Louth, ‘The Sum of its Parts? Partnering, the MoD and Industry’, RUSI Journal (Vol. 157, No. 2, April/May 2012).

⁵⁰ See ‘General Dynamics and Newport News Shipbuilding Sign Teaming Agreement for Construction of New Attack Submarine’, press release, 25 February 1997, <http://www.generaldynamics.com/news/press-releases/detail.cfm?customel_dataPageID_1811 = 13058>, accessed 15 October 2013.

⁵¹ See Gansler, Democracy's Arsenal, p. 168.

⁵² Heidenkamp and Akaltin, ‘Confronting the European Defence Crisis’, p. 10.

⁵³ Ashton B Carter, ‘The Defense Industry Enters a New Era’, speech at the Cowen Investment Conference, New York, NY, 9 February 2011.

⁵⁴ DoD, ‘Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defence Spending’, memorandum for acquisition professionals, 14 September 2010.

⁵⁵ Robert Gates, speech to NATO Strategic Concepts Seminar, National Defense University, Washington, DC, 23 February 2010.

⁵⁶ Author interview with a senior US defence industrialist, 6 November 2012.

⁵⁷ See Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly Improbable (London: Penguin, 2007).

⁵⁸ See the National Research Council of the National Academies, An Assessment of the Small Business Innovative Research Program at the National Science Foundation (Washington, DC: National Academies Press, 2007) and House Small Business Committee, ‘Manzullo: US Small Businesses Secure Record Amount of Federal Prime Contracting Dollars’, 21 June 2006.

⁵⁹ See Alvin Toffler and Heide Toffler, War and Anti-War: Survival at the Dawn of the Twenty-First Century (New York, NY: Little Brown, 1993).

⁶⁰ See David Gould, ‘Procurement Reform’, in Codner and Clarke (eds), A Question of Security.

⁶¹ See Keith Hayward, ‘Defence Industrial Strategy under the Coalition’, in Codner and Clarke (eds), A Question of Security.