Aerospace and Defence

Constructive Edge understands the unique needs of the global aerospace and defence industry and how it needs to manage industrial cooperation, economic particpation, offset programs and essential security interests as found in Directive 2009/81/EC (generically "Industry Programs").  Constructive Edge has excellent connections that assist in Industry Program implementation. Services include:

  • Development of an Industry Program strategy
  • Research and identification of local supply chain opportunities
  • Project proposal development
  • Negotiation, documentation and compliance
  • Indirect industrial benefit fulfillment
  • Post contract administration
  • In-house placements (secondments) on either short or long-term basis

It can be said that Industry Programs have existed for decades, which is certainly true, but the new emerging customer countries which are accounting for the majority of new foreign defence sales are developing Industry Program policies that are largely in line with the traditional markets of Europe.

However, whereas such markets in Europe (for example) recognise that Industry Programs are a political tool as a means of justifying expensive foreign defence procurements, they also recognise their limitations as an economic development tool. An emerging trend in other markets is an expectation that Industry Programs should serve to develop local defence industries and be demonstrably measurable in terms of the resulting business generated. 

Indeed, there are examples of procurements that have been made by Governments less because of a need for the equipment, than for the expected long term benefits of the associated Industry Program. This aim, though relatively unfamiliar, is legitimate. Particularly in the emerging defence markets that are substantially increasing their foreign defence spend, Industry Program regulations generally require defence related technology transfer to generate exports and/or entirely new manufacturing.  In-country systems integration and through-life-support capability are also a focus in complex platform procurements.

This poses a number of difficult compliance and commercial issues for defence companies, and therefore generates higher risk of non-fulfillment. In contrast, European customers’ requirements tend toward direct co-production with established defence industries and so can more readily rely on local manufacturing opportunities prior to contract signature.

As a reaffirmation of this need to refocus, a respected Washington think tank forecast that between 2011 and 2016 an additional $225 billion in Industry Program obligations was likely generated. 

While this figure is not significantly more than the volume generated between 2005 and 2011 ($214 billion), the countries that made most of these procurements are relatively new to mandated Industry Programs and the individual procurements were much larger. All these changes, which show no sign of abating, have resulted in a greater demand for advice and assistance from globally capable organisations and in this specialist service provider space, that is Constructive Edge.

The Constructive Edge Team is unparalleled in the breadth of global experience it brings to its clients involving all aspects of strategy, bid preparation and submittals, project development and program fulfiment for both aerospace and defence Industry Programs.

 

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