On Monday 20th of March 2023, the Council of Foreign Affairs (in Jumbo format) reached an agreement to accelerate the supply of ammunition to Ukraine and Replenish the Stockpiles of Member States.
In the margins of the Council meeting, 17 Member States and Norway signed a project arrangement for a common procurement project of ammunition, led-by the European Defence Agency (EDA), called Collaborative Procurement of Ammunition.
C&V Consulting provides you with the key points to remember:
1. The three-track Agreement to Supply Ammunition to Ukraine and Replenish the Stockpiles of Member States
- 1st Track, Depleting the stocks: The European Peace Facility will have a budget of 1 Billion EUR to reimburse Member States that will give more artillery ammunition (NATO and Soviet standards) to Ukraine either from their existing (and largely depleted) stocks or by reprioritising existing orders. To be eligible for this funding, the deliveries must happen before the 31st of May 2023.
- 2nd Track, Short-Term Common Procurement: Member states will commonly procure 155mm ammunition from the defence industry of the EU and Norway, and they will donate part of the orders to Ukraine. Member States can procure either through the project led by the EDA (Collaborative Procurement of Ammunition) or through other projects led by a Member State. The European Peace Facility will reimburse Member States (up to another 1 Billion EUR) for whatever they donate to Ukraine from these common procurement orders, before the 30th of September 2023.
- 3rd Track, Reinforcing the EDTIB: The Commission is tasked to propose concrete actions to help rump up the defence industry by strengthening the supply chain, speeding up the public procurement processes, removing bottlenecks, ensuring the supply of critical raw materials – especially gunpowder and promoting investments.
These common procurement projects of ammunition (whether led by the EDA or a Member State) could be eligible for EDIRPA. Indeed, the Commission could be willing to dedicate a large share of EDIRPA’s budget to incentivize the common procurement of ammunition.
The stated objective of Thierry Breton is to reduce the delivery times of 155mm ammunition from 12-16 months to 4-6 months.
2. The EDA’s Project « Collaborative Procurement of Ammunition »
In the context of the 2nd and 3rd tracks of the agreement above, the EDA has launched a project for the collaborative procurement of ammunition.
The project has two different components:
- A Fast-Track Project to procure 155mm ammunition for Ukraine and Member States
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A seven-year-long project to procure ammunition of all calibres (5,6mm to 155mm)
17 Member States and Norway have already signalled that they are interested in the common procurement project. A few other Member States could also indicate their interest in the coming days or weeks.
3. A strengthened ambition for the EDA
The EDA has the possibility of organizing joint procurement projects. The Agency already has previous experience with the joint procurement of ammunition for the Carl Gustav recoilless multipurpose cannon, and in the past, it has negotiated framework contracts with companies for the provision of services for Member States such as airlift or satellite imagery.
Nonetheless, given the scope of the new « Collaborative Procurement of Ammunition » project, the EDA could place common procurement at the heart of its activities in the future, especially in the framework of the future European Defence Investment Programme (EDIP).
Contact us to know more: contact@cnv-consulting.eu