NATO looks to contract $3.2B over next three years on C4, IT

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The point agency for buying software and technological capabilities for NATO wants to increase the number of small companies that support the alliance – and is prepared to put its money where its mouth is.

Peter Scaruppe, Director of Acquisition for the NATO Communications and Information Agency, told Defense News in a Feb. 2 interview that his office does about a billion Euros worth of business “in a good year – that’s a small number from the US, but for Europe that is a major player here.”

But that number is set to grow in the next two and a half years, during which Scaruppe says his agency plans to spend around €3 billion on contracts for requirement ranging across a number of areas, including cyber security and IT, but predominantly for command and control capabilities.

“Command and control systems for missile defense, for example, and for air command and control systems — we will have about €500m in business in this area alone. We have a lot of communication systems in the pipeline, for example, in the maritime area, in the land command and control area.”

The single biggest contract being worked is for satellites communications, which Scaruppe could come out to around €1.5 billion over the next three years.

Another area expected to grow are what Scaruppe calls “functional services” – things such as providing IT infrastructure for NATO’s new headquarters, scheduled to open this year, or wiring up the locations for NATO’s forward-based operations, such as in Poland. Doing joint procurement of software also falls under that umbrella.

“Software has been procured for NATO through common-funded financing, that means all 28 nations chip into a project, then the nation can use the software for a national purpose without having to buy it again because it’s been paid for by NATO already,” he said.

In order to broaden the pool of suppliers, the agency is hosting its annual conference outside Europe for the first time. The event instead will be hosted April 24-26 in Ottawa, Canada, a strategic decision made in part because Canada has “a lot of small and medium enterprises, and not the big-ticket industries” that tend to appear at shows in the United States.

Roughly 80 percent of the agencies’ contracts are given to prime contractors, so the conference will feature a challenge where smaller companies can compete to tackle a specific technological problem, which Scaruppe hopes will result in new voice arising.

“We need to make it easy on the smaller companies. A lot of them don’t want to deal with us because of too much red tape and administration, and an inter-governmental installation like we are tends to have more red tape than a national government,” Scaruppe said, adding that many smaller firms don’t want to have to share intellectual property rights with the NATO governments.

If those concerns sound familiar, it is because they are echoes of long-running concerns from U.S. defense officials – most notably former defense secretary Ash Carter, who made bringing technological innovation into the Pentagon a key part of his time in office. And just as Carter encouraged smaller companies to raise their concerns with the Pentagon, Scaruppe hopes to leave his conference with a handful of suggestions for improvement.

“If we want the best, we need to address this. We’re addressing this through the conference, we’re holding workshops where we want to address this,” he said. “We want to hear from industry, what are the challenges, and we will have our own experts here, including my own staff, to discuss how we can make it easier for industry to be a part of the successful bid.”