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NATO Support Agency (NSPA) and Smart Defense

Introduction
At the Lisbon Summit in November 2010, NATO leaders, in the context of the new Smart Defence approach, agreed to streamline the functions and programmes of three NATO support agencies (NAMSA, NATO Maintenance Supply Agency - NAMA, NATO Airlift Management Agency and CEPMA, Central Europe Pipeline Management Agency) and to merge them into one agency: the NATO Support Agency (NSPA). NSPA became operational on 1/7/2012. Greece has a significant annual cycle of procurement and purchases of services and support materials from NSPA of the order of 35-40 MEUR to support the ED&SA.

What is Smart Defense?
Smart Defense is the new approach that promotes cooperation and encourages allies to work together in developing, acquiring and sustaining operational capabilities to undertake key mandates within the framework of NATO's new strategic plan. This is done through the pooling and sharing of capabilities and resources, the specialization of production, the prioritization of actions and the more effective coordination of efforts.
Since 2008, the global economy has been facing its worst period since the last war. Governments are implementing drastic cuts to defense budgets to cope with the economic downturn. Under Smart Defense, alliance members must prioritize those operational capabilities they need most, specialize in what they do best, and seek multinational cooperative solutions to common problems. NATO can act as a mediator, helping countries define what they can do collectively at lower cost, more effectively, and with less risk.
NATO Secretary General Rasmussen has placed the Smart Defense philosophy high on the Alliance’s agenda and priorities, often describing it as a vital priority for the Alliance. According to his speech at the Munich Security Conference in February 2011, Smart Defense can be defined as the specific approach capable of “ensuring greater security, with less money, through flexible cooperation aimed at pooling and sharing resources so that NATO members can together acquire the necessary operational capabilities.”
On this basis, Smart Defense is obviously nothing new (Jacob Henius, Jacopo Leone Mac Donald/NATO Defense College, Rome, March, 2012). Moreover, concerns and concerns about the shortcomings in NATO’s operational capabilities have been expressed many times by countless military and political actors, often proposing the “pooling and sharing of resources” to narrow the gap in the balance of operational requirements and capabilities.
Thus, Smart Defense seems like nothing more than a new attempt to implement an old idea. Let us not forget, NATO’s existence is based on an innate belief in the interests and benefits of initiatives to pool and share forces and resources, and, obviously in these times of recession and austerity, there is no doubt that a philosophy like that of Smart Defense renews its political appeal and value.

Who is NSPA?
The NATO Support Agency (NSPA) is the NATO Integrated Logistics provider, combining the former NATO Maintenance and Supply Agency (NAMSA), Central European Pipeline Management Agency (CEPMA) and Air Transport Management Agency (NAMA). It is fully funded by its members, non-profit-making, staffed by approximately 1200 employees and headquartered in Luxembourg (Capellen), with operational centres in Luxembourg, France, Hungary and Italy.
NSPA is the executive body of the NATO Support Organisation (NSPO) of which all 28 NATO nations are members. The nations are represented on the Agency Supervisory Board (ASB), which directs and oversees the activities of NSPA, which brings together logistics and procurement activities in a single agency, providing integrated multinational support solutions to its stakeholders. The creation of the new agency is part of the new approach to smart defence.

NSPA Mission:
The NSPA mission is to provide NATO members, NATO military authorities and partner countries, both individually and collectively, with flexible, effective and efficient logistics and support for their military systems and operations, in times of peace, crisis and war, wherever required.

The NSPA components providing support are the Airlift Management Programme, the Central Europe Pipeline System Programme and the Logistics Operations Service.

Customers
• NATO member countries (collectively or individually)
• Allied Command Operations and Transformation (ACO, ACT) and subordinate Commands
• Member countries of the Partnership for Peace (PfP)
• NATO Services and Organizations
• International Organizations (EU and UN)
• Central European Pipeline (CEPS) Users

Suppliers
• Industry and Service Providers of NATO member countries
• Military technical services of NATO member countries
• Industry of Peace Partnership member countries (in some cases).

Portfolio of Support Services Provided
• Transportation of fuels and naphtha
• Aviation fuel bank (JET A-1)
• Fuel storage
• Fuel quality control
• Management and support of the three air transport vehicles (Boeing C-17).
• Use of air transport within the framework of the agreements of the Nations, NATO, EU and UN.
• Provision of air transport to member countries according to the pre-agreed allocation.
• Support of weapons systems and means
– Terrestrial systems
– Aircraft
– Naval systems
– Unmanned aerial systems
– Missiles and rockets
– Ammunition
– Ground-based air defense systems
– Sensors and radars (command and control)
– Telecommunications systems
– NATO Operational Capability Packages.
• Provision of Logistics Services
– Logistical support
– Maintenance, repair and calibration
– Technical and mechanical consulting
– Transportation
– Host Nation of NATO Systems and Projects (NSIP)
– Support for Security Forces and Coast Guard systems.
– Material procurement brokerage (Random Brokerage)
– Dismantling, demilitarization, withdrawal and destruction of military equipment
– Project Management (turn-key solutions) and technical assistance
– Logistics information and data management (NATO codification, configuration and documentation management, Product Life Cycle Support, data management support)
– NATO operations planning and contract management
– Integrated logistics in the business field
– Multiple expeditionary operations support services
– Civil engineering works
– Relief and assistance after major disasters

Procurement Policy
The objective of NSPA's procurement policy is to achieve the best price while respecting technical and quality specifications and schedules. The basic principles are consolidation of supplies, international competition, fair balancing between member countries, transparency and flexibility, and strict quality control.

The basic rules of procurement competitions are:
• Participation is only allowed to registered suppliers in the NSPA supplier source file.
• The selection is made from the supplier base.
• The tender process can be carried out through the online application of electronic procurement (Ebid, Electronic Bidding).
• Invitation of at least three suppliers for supplies under 75KEUR.
• Mandatory consultation of all qualified suppliers for procurement requirements exceeding 75KEUR.
• The Request for Proposal (RFP) Document forms the basis of the contract.
• Fixed price contracts are preferable.
• The bids are evaluated and the bid that complies with the technical specifications and requirements with the lowest price is awarded the contract. All participating suppliers are informed of the results of the tender.

Interesting Business Highlights 
– Staffing: ~1200 people from all NATO member countries.
 Total contractual transactions for material supplies and support: ~ 25,000
– Total transaction cycle:  ~MEUR 1,800 (materials 400, services 1,400)
 Service efficiency (Administrative expenditures over the value of services): 5%
  – Total collaborating industry & service units: ~10,000 total.
 – Average procurement time: ~55 Days
– Cost of Supplies: In addition to the procurement of materials and support services provided through NSPA's institutionalized programs and partnerships (Weapon systems programs, partnerships and support conferences), unscheduled materials and services (Random Brokerage Services) are also provided upon request by any member.The cost of these is: Administrative Fee 300EUR per request + Additional Operating Fee, based on the value of the materials and/or support services. The additional operating fee varies from 0.5% to 7% of the value of the materials/services provided.

– Greek Industrial Returns (HIR):

The industrial return (IR) is the ratio of the value of contracts that NSPA has made with a country's Industry to the value of purchases and supplies that the country has made through NSPA in a specified period (usually 1 year).

When BE>1 then the country is well-ranked (Well Placed Country).

When BE is from 0.5 to 1 then the country is moderately ranked (Less Well Placed Country) and

when BE<0.50 then the country is a Poorly Placed Country.

In 2011 the EBE was ~0.38 (Greece placed contracts worth ~MEUR36 while NSPA-NAMSA, at the time- gave Greece contracts worth ~MEUR4), which means that Greek Industry gets much less than Greece gives to NSPA and the country is poorly-ranked. It is obvious that the Ministries of Defense and Development must work closely together to raise the EBE above 1 (as an example, the EBEs of Italy, Turkey, Belgium are respectively ~7.3, ~6.9 and ~1.3).

– Participation of Greek Systems:

Greece purchases support services for the following systems from NSPA:
– Missiles and Torpedoes (HAWK, AMRAAM, Artillery Rocket&Missile Systems, Land Combat Missiles, Stinger, Patriot)
– Aircraft (Fixed Wing Aircraft, Helicopter, Strategic Airlift Integrated Solution, AWACS)
– Land Systems (Land Combat Vehicles, Logistics Services for UAVs)
– Naval Systems (Torpedo, Naval Logistics Support)
– Telecommunications Systems (NATO: Crypto, Depot&Support System, Maritime Communications, Network Management Systems, Peace Support Operations, SATCOM, Transmission Systems)
– Air Defense Systems (AADGE, CRC, GBD, RAT31, RSRP, SSSB)
– Support Services (Ammunition, NADB, PfP, Random Brokerage, COMMIT, NMCRL)
– Business Support (KFOR Fuel)

– Participation of Greek personnel: Permanent international employees: A' category ~10, B' category ~15, EEJ liaison officers (4).

Sources:
NATO Support Agency (NSPA), www.nspa.nato.int,
NATO Defense College, Jacob Henius, Jacopo Leone Mac Donald, Rome, March, 2012

Anastasios Basaras
Member of the Armed Forces (MH), former NATO Senior Official