HELSINKI — The competitive nature of bids for
The five — Boeing (F/A-18), Dassault Aviation (Rafale), BAE Systems (Eurofighter Typhoon), Lockheed Martin (F-35) and Saab (JAS Gripen) — have all responded to requests for information (RFI) from the Finnish Armed Forces Logistics Command (FAF-LA) concerning Finland’s plan to replace it fleet of 61 Boeing F/A-18C/D Hornet multirole fighters.
As part of the RFI,
The aircraft acquisition cost within the HX-FRP framework, depending on the fighter type bought, is estimated to be around $10.5 billion. Life cycle costs are likely to be up to three times the acquisition price.
is scheduled to reach a purchase decision in 2021. The FAF plans to start retiring the first of the Air Force’s F/A-18 aircraft from 2025.
The Finnish government, struggling to re-energize an economy, which has suffered through serial recessions and austerity programs since 2008, wants to use the HX-FRP to spur bids that contain a strong degree of long-term investment value to stimulate domestic growth and jobs.
Saab, Dassault Aviation and BAE Systems have indicated they plan to include extensive defense-industrial collaboration proposals within the frameworks of their HX-FRP bids. The scope is for long-term strategic partnerships, defense-related capital investment projects and commitments to assemble fighter aircraft in
.
The HX-FRP, and how it will be funded, will feature prominently when Finland’s center-right government drafts a new public finances framework plan covering 2018-2021, said Member of Parliament Markus Mustajarvi, the Left Alliance member of the parliamentary Defence Committee.
"That public finance plan will happen in April 2017. The options are to finance the fighter acquisition program from the central budget or fund it through borrowings. There will be opposition if the government tries to finance the project by reducing spending on core areas such as health care and education," Mustajarvi said.
The RFI directed at Boeing, Dassault, BAE Systems, Lockheed Martin and Saab sought clarification on budget estimates on procurement costs, systems maintenance and weapons, said Project Coordinator Lauri Puranen.
"A call for tender will be sent out in the spring of 2018, and the procurement decision will be made in 2021," Puranen, the Finnish Air Force’s former chief, said.
The five competing manufacturers are stepping up measures to drive the lobbying wings of their campaigns well in advance of the bid-tendering stage. Former diplomatic and military chiefs are being recruited as consultants while public relations firms have been hired for what will be
’s single largest defense-related capital investment.
BAE Systems has hired Finnish PR firm Kaiku Helsinki to support its lobbying campaign. Lockheed Martin is working with Hill+Knowlton Strategies’ office in
, while Saab is using the Helsinki-based PR agency Miltton.
The flurry of lobbying and networking activity is directed at establishing contacts and support within
’s defense industry. Moreover, contact has been made by lobbying groups with MPs, the Defence Committee and various committee members.
The frequency of contacts from competing companies is rising, said Ilkka Kanerva, the Defence Committee’s chairman. For transparency reasons, the committee has decided to only meet with lobbyists representing the defense contractors in committee meeting rooms.
"Personally, I have been receiving invitations to various air shows from the competing companies since last spring. I’ve told them my calendar is full," Kanerva said.
On the industrial front, Saab’s optimism in selling the Gripen NG to
is buoyed by
’s desire to reach a "meaningful" bilateral defense deepening agreement with its Nordic neighbor, said Marc Fierens, a Brussels-based political analyst.
"The Finnish government’s official position is that commercial value and cost rather than political considerations will influence the contract decision and outcome. Saab believes it is best positioned to deliver on cost and long-term industrial cooperation. That said,
’s political impulse favors maintaining a close
security dimension to its national defense," Fierens said.
The Swedish defense group’s eventual offering to
will likely be modeled on the structure of its defense-industrial agreement with
. This embodies long-term commitments on capital investments, localized assembly of aircraft, building strategic partnerships and technology transfer.
Worth $4.7 billion, Saab has been contracted to deliver 36 Gripen NG multirole aircraft (28 single-seat Gripen Es and eight twin-seat Gripen Fs) to
during 2019-2024.
On Nov. 22, Saab launched the
state-headquartered Gripen Design and Development Network (GDDN) in collaboration with Embraer Defense & Security.
The GDDN, which will serve as the hub for Gripen NG technology development in
, includes participation from local industrial partners AEL Sistemas, Atech, Akaer and the Brazilian Air Force’s Department of Aerospace Science and Technology research unit.
"We have a long-term commitment to
. The launch of the GDDN is a key milestone in the Brazilian Gripen program, as it will be the basis for the technology transfer and fighter development in the country," said Hakan Buskhe, CEO of Saab.
strengthened its capacity to gain stronger commitments from the five competing manufacturers when the government adopted a Ministry of Defence resolution in April 2016 to "protect the indigenous defense industry’s technological and industrial base," Fierens said.
"The resolution is integral to government plans to finds ways to more closely integrate
’s defense industry into the country’s defense system," Fierens added.
The resolution will impact government thinking on "major defense programs," such as the HX-FRP and replacement of a large part of the Navy’s combat surface fleet, according to Finish Defence Minister
.
Under the resolution, the protection of the defense industry’s technological and industrial base — a large part of which is centered around state-controlled Patria — will become a fundamental factor in the FAF’s procurement and research activities.
Saab’s futuristic target of selling 450 Gripen E/F-type aircraft globally over the next 20 years is partly based on securing a deal with
. In addition, the company remains hopeful it can also notch up export deals to sell the C/D versions of Gripen to countries like
,
,
and
.
’s technology-driven, advanced, high-tech industrial base has the capacity to interest Saab on a broader level beyond the HX-FRP, said Buskhe.
The dramatic downsizing of Finnish electronics giant Nokia Corporation since 2012 has seen thousands of impacted software engineers move into military-security technology areas such as digital defense systems, cyber defense products and advanced simulation technologies used in military training.
"Regardless of what happens with the Gripen in
, we will grow our interests there.
has a lot of technical expertise that is interesting for us," Buskhe said.
