FlightCom – August 2019

25 FlightCom Magazine

doctrinal requirements of the acquisition.

Unlike arms acquisitions elsewhere in

the world, those in South Africa are fixed

cost. That is, once you reach the point of

actually ordering an aircraft, the only thing

that should change are movements owing to

currency. While it’s theoretically possible

to request a higher ceiling, in practice it’s

almost never granted.

In effect DAHB 1000 achieves this

by strictly separating out risk-carrying

portions of an acquisition, such as

developing uncertain new technologies,

from the acquisition itself. These technology

development projects, conducted as part of

the acquisition project, are kept intentionally

small, time boxed, and limited in scope.

As an example, let’s say the SAAF

wanted to acquire a new transport helicopter

but for reasons of national defence policy

and the creation of indigenous capabilities,

it desired to have a new optical distributed

vision system developed by a local

company. That element would then be a

separate technology development project

with a specific time scale designed to

reach maturity just at the point where the

acquisition project reached final approval

on its subsystems. The project officer in

charge of the acquisition project would then

have to ensure that there was a fallback plan

to use other available systems to meet the

operational requirement should the attempt

to develop and industrialise the technology

fail to deliver.

Virtually every contract also includes

strong penalty clauses for late delivery or

failure to meet specifications, which can

be done purely because DAHB 1000 sets

high standards for the requirements and

specification analysis phases, as well as the

verification phase. Meaning that there’s an

objective and difficult to contest basis on

which to hold suppliers to account.

Even the ‘Arms Deal’, with its

controversy over selections, at least

delivered good prices and was run on

time and on budget because despite there

being a custom (and flawed) initiation

process, Armscor and the DOD used the

then VB1000 to guide the negotiation and

contract stage, and kept each contract to its

cost ceiling. This is why the SAAF had to

cancel two Gripens in order to afford extra

capability that it decided it wanted late in

the process.

Since then most of the gaps in policy

that led to the deviations from VB1000 in

the Arms Deal have been plugged, while the

regulations around both national industrial

and defence industrial offsets have been

improved substantially. It’s also notable that

winning bids are not chosen on price alone,

but on a complex process of measured

factors including the benefit to local

industry, supportability and logistics, and so

on, with price being the strongest variable.

Of course, no system is entirely perfect.

For one, efficiently running a process as

complex as this requires a large number

of exceptionally skilled people as project

officers and other roles. But the severe

budget crunch the SANDF, and the SAAF

in particular, have faced over the past

decade has meant that very few large scale

acquisitions have been carried out, so the

process is not tested as often as it ideally

should be.

Transparency is also lacking, as while

DAHB 1000 specifies that Parliament’s

portfolio committee on defence should

be briefed bi-annually on all cardinal

acquisition projects, no such briefings have

taken place. And its sheer rigidity means it

takes a long time for a project to go from

a Required Operational Capability to an

acquisition if the various control boards

aren’t meeting frequently. In practice, this

has meant that in a number of cases a project

has taken so long to get all the necessary

approvals that by the time it’s ready either

the market or the strategic situation has

changed. Also currency movements mean

the original approved budget no longer

suffices and the process must start all over

again as each approval only has a limited

lifespan.

These can all be solved. For one, DAHB

1000 does contain a procedure for expedited

urgent operational requirements, which

follow a much shorter process but with the

highest levels of authorisation required.

The delays in receiving approvals from the

various steering committees and boards

is simply bad management and should not

happen to the extent it does.

However, that all assumes that the

SDA remains available for the DOD to use,

because it certainly will not have enough

time to both alter its policies and accounting

practices, and change its Financial

Management System in time to be able to

cope with the planned phasing out.

It also assumes that there will be at least

some acquisition funding, but the medium

term budget proposals from National

Treasury show the SANDF’s budget being

cut again and again, reducing the acquisition

budget to almost nothing.

Without the ability to buy anything at

all, the question of how that buying should

be done becomes merely academic.

ABOVE: It took a lot to subvert the arms

deal - and will require even more now.

.

.

.