Evaluation of the procurement of the NH90 helicopters made public

In 2001 Finland took the decision to order 20 NH90 helicopters from the French company   NHIndustries as a part of a common acquisition program with Sweden and Norway. Because the NH90 helicopter programme consisting of 14 countries had fallen badly behind schedule, an administrator was appointed in October 2007 by Minister of Defence Mr. Jyri Häkämies to evaluate the different phases of the procurement process.

Throughout the evaluation, the administrator, Mr. Keijo Suila, has been analyzing the reasons why the NH90 helicopter programme had fallen behind schedule.  The aim was to gather information in order to prevent similar difficulties regarding other major procurements in the future. Mr. Keijo Suila has not evaluated the military basis of the procurement in itself.

Based on the report, following conclusions were made:

1. The delay regarding the delivery was mainly due to the fact that NHIndustries is a new joint venture and that the NH90 helicopters were still undergoing product development. The project timetable was too ambitious. The evaluation process showed that both parties of the contract have been acting in good faith.

2. Finland has been totally dependent on the qualification and manufacturing of the NAHEMA TTH. That is the reason why Finland has not been able to accelerate the delivery of the helicopters.

3. Finland has made a good contract and received good compensation of the delay in delivery.

4. There is a strong reason to believe, that Finland has chosen the right type of helicopter,  especially when looking at the product life cycle and the purpose of the helicopters. Hence, the helicopter will also be suitable for international co-operation as well as international crisis management operations.

In his report Mr Keijo Suila concludes that regarding similar procurements in the future, both the Ministry of Defence as well as the Defence Forces should develop and re-evaluate certain procedural areas.

The areas of improvement specifically concern the possibilities to develop procurement policy and process. The current procurement procedures were regarded as complicated by the administrator. The aim of any improvement should be to make current practice more effective and to simplify the decision-making process. Risk-assessment should also be developed as a whole. The NH90 procurement proved that the national certification processes might have a decisive affect regarding timetables. The administrator also took into account the importance and the definition of purpose during the initial stages of the process. The haste of the initial phase is usually a setback.  

The communication regarding the procurement was not without problems. At some stages, the communication was found to be less active, less transparent and open than it should have been. The common rules regarding communication should therefore be made more accurate during all phases of the procurement process.

Regarding the development of practices concerning national certification processes in Europe, the administrator recommends that Finland should actively pursue the development of a common set of rules on the subject of national certification process.

Minister of Defence, Mr. Jyri Häkämies is satisfied with the administrators report. “The administrator was appointed to find and develop practices, which in turn will help us regarding future procurements. As the costs are constantly increasing, it is ever more important that the procurement processes are efficient as well as apparent and that all parties are commited to them. Mr. Suila’s report will undoubtedly help in achieving these aims.”

Mr. Suila’s report was made public on March 4th 2008. It is available in English on the 18th of March 2008.

For further information regarding the report please contact the administrator, Mr. Keijo Suila, tel. +358 9 160 88041 or the Director for Public Policy, Mr. Jyrki Iivonen, tel. +358 9 160 88200 or +358 50 568 0553.

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