FlightCom – August 2019

FlightCom Magazine 24

OPPOSITE PAGE
ABOVE: A drastic reduction in Special Defence Account budget will make it effectively impossible
for the SAAF to upgrade its strategic and tactical airlift capability.

BELOW: Crusades such as this book against arms deals are weak because of the excellent controls.

controversially the SDA is allowed to have a small section, typically
up to around R400 million, that is allocated to funding top secret
projects and operations and overseen by neither Parliament nor
the Auditor-General. Its spending must, however, be personally
approved by the Secretary of Defence and Minister of Defence &
Military Veterans. And the mandated paper trails are voluminous.
In order to retain proper financial control and auditing, and
prevent breaches of the Public Finance Management Act (PFMA),
there are strict limitations placed on how the SDA is allowed to be
used. To keep this brief, it’ll focus only on purchases, leaving the
discussion of secret operations for another time.
First, all defence purchases are split into two broad categories
of matériel, Category 1 and Category 2. Category 1 refers to
military equipment and associated parts which are designed and
developed specifically to military
requirements and standards, and
managed in a through- life concept
with integrated logistic support.
In contrast, Category 2 refers to
Military Off The Shelf (MOTS) or
Commercial Off The Shelf (COTS)
components, parts, and supplies that
are available on the open market
from multiple suppliers and don’t
require the establishment of new
military specifications or baselines.
In practice this means that
buying fuel, uniforms, ration packs,
most tyres, paint, and so forth can
be done from multiple suppliers in
South Africa without substantial
risk. These fall under Category 2
and are referred to as ‘procurement’.
Systems like new aircraft, bombs, missiles, reconnaissance pods,
and so forth fall under Category 1 and are termed ‘acquisitions’.
Second, these two categories follow completely different
processes, with Category 2 items going through the standard
tender process as defined by National Treasury and the Preferential
Procurement Policy Framework, and Category 1 items going through
the far stricter policy defined by the Handbook for the Acquisition
of Armaments in the Department of Defence and Armscor (DAHB
1000 Edition 1.1). Category 2 spending is allocated to the Folio 01
section of the DOD’s Financial Management System (FMS) and can
only come out of the GDA. Category 1 spending is allocated to the
Folio 02 section of FMS and can only come out of the SDA.
DAHB 1000 is an extremely comprehensive, thorough, and
carefully designed policy document running to over 500 pages. It
defines in detail each and every aspect of running accountable and

efficient acquisitions. It’s the culmination of decades of refinement

beginning with the original VB1000 policy in the 1990s, through

four substantial revisions (at one stage becoming DAP 1000) through

to the most recent which came into effect in March this year. Each

new refinement has brought more integration between the DOD

and Armscor and better controls. This article covers just the basic

elements of the policy.

Unfortunately, as a result of much ignorant and incorrect

media coverage around military acquisitions in South Africa,

particularly the ‘Arms Deal’ of the late 1990s, most of the public

has the impression that it’s an uncontrolled free-for-all without any

accountability. But this is far from the truth. In reality, thanks to

DAHB 1000 and its predecessors, the acquisition of major military

systems in the SANDF is well-controlled, designed to reflect actual

operational needs at every

stage, and overseen at multiple

levels.

In the course of an average

project, it will first need to

be justified by a Required

Operational Capability

document, approved by the

Military Command Council. If

successful, that’s followed by

a Staff Target which must be

approved by the Armaments

Acquisition Steering Board

(AASB) chaired by the

Secretary for Defence. Then,

a Staff Requirement fleshing

out details, which must be

approved by the Armaments

Acquisition Control Board

(AACB) chaired by the Chief of Defence Matériel. Then a Project

Study Report, approved at AASB level, a Deployment Plan approved

at AACB level, an Acquisition Plan at AASB level, and a Provisional

and/or Final Project Closing Report again at AACB level.

In the case of a ‘cardinal’ project, defined as a project with higher

than usual risk, which has a total expenditure equal to more than 5%

of the total acquisition budget for one year, or is otherwise strategic,

then the Staff Target, Project Study Report, and Acquisition Plan have

to go all the way up to the Armament Acquisition Council chaired by

the Minister of Defence & Military Veterans and potentially all the

way up to Cabinet. During those process no less than seven separate

specification baselines, Requirements (RBL), Functional (FBL),

Allocated (ABL), Product (PBL), Manufacturing (MFL), Operational

(OBL), and Qualification (QBL), will be created and validated, along

with ten studies to define and verify all the operating parameters and

THE SOUTH AFRICAN

AIR FORCE SDA

BUDGET WOULD BE

REDUCED FROM R1.5

BILLION TO JUST R37.6

MILLION IN 2020/21