ISS Contract For Cougars Extended

RMAF Airbus EC725/H225M helicopter dropping a Paskau team at the Kota Belud ATG range on Nov. 21, 2017.

SHAH ALAM: ISS contract for Cougars extended. The In-Service Support (ISS) contract for the RMAF 12 Airbus EC725 helicopters have been extended for another three years. The ISS contract had been awarded to a Boustead Heavy Industries Corporation Bhd (BHIC) subsidiary company, BHIC Aeroservices Sdn Bhd, since 2014.

RMAF EC725 flying at the opening ceremony of LIMA 17.

BHIC announcement.

We refer to the announcements made on 21 March 2014 and 21 July 2017 on the receipt of a Letter of Award (“LOA”) by BHIC AeroServices Sdn Bhd (“BHICAS”) from the Ministry of Defence Malaysia (“MOD”) in relation to the provision of maintenance and supply of spares for the Royal Malaysian Air Force EC725 Helicopters via In-Service Support (“the ISS Contract”).

BHICAS is a joint venture between BHIC Defence Technologies Sdn Bhd (51 percent), Prestige Pillar Sdn Bhd (30 percent) and Airbus Helicopters Malaysia Sdn Bhd (19 percent).

The Company wishes to announce that BHICAS has accepted a letter dated 12 August 2020 from MOD for the extension of the ISS Contract for another three (3) years, effective from 1 April 2020 (“the Extended LOA”) with an additional ceiling contract value of RM113.2 million. The new total ceiling contract value is RM548.2 million only.

Apart from the extension of the Contract period and revision of Contract value, there are no significant differences between the substance of the Contract and the Extended LOA.

The Extended LOA will contribute positively to the earnings of BHIC Group for the financial year ending 31 December 2020 to 31 December 2023.

None of the directors or substantial shareholders of the Company, or persons connected with them have any interest, direct or indirect, in the Extended LOA.

This announcement is dated 1 September 2020

EC725 flying over the hills of the Kota Belud air to ground range.

Like most of RMAF maintenance contract, the ISS contract was directly negotiated with BHIC Aeroservices as it had partnered with Airbus Helicopters, the OEM of the EC725. For the record, RMAF currently operates 12 EC725, operated by two squadrons, No 10 at the Kuantan airbase with six airframes while the No 5 Skuadron in Labuan airbase has four.
RMAF EC-725 M55-05 at low level during the demonstration at Labuan airbase for the 2015 media day.

The EC725, designated as H225M by Airbus Helicopters, are the only operational helicopters in RMAF currently. The Nuri has been grounded since early last year.

— Malaysian Defence

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60 Comments

  1. Is this contract extension a way to bypass the now mandatory open tendering process, since in view that the original contract timeline would have passed?

    If Airbus chooses to work with another partner that could offer TUDM better pricing or service, or directly open their servicing hub here, this kind of non-negotiation closed contracts is not open nor transparent.

    Once a contract term ends, it should be put up for tender again. Can these contracts even continuously be extended indefinitely?

    Reply
    Yes to all the questions

  2. Boustead,

    Just give the 5x MHS EC225LP to TUDM. Rather than the asset idling and not making any money, at least you will profit from a bigger ISS contract.

    You got so many “national interest” contracts, its your turn to give something back to the nation, those EC225LP have zero value in the commercial aviation sector anyway.

  3. @…
    So you’re suggestion Boustead to ‘donate’ a few million RMs of choppers in expectation for a few billions RMs in bailout by taxpayers money? Sounds like yet another of M’s hairbrained scheme (ie Perwaja, MAS, MISC, Proton, etc). Has these ever been fair to the taxpayers?

  4. @ joe

    what i meant is that they (even without donating the ec225lp) have been getting so many contracts from the government, including this latest ISS for EC725.

    so now it is only fair for them to give something back, by donating the ec225lp

  5. @…
    Come on lah. In this reality giving something means expecting something back. If Government will ask them for some donation, they will be beholden to return the favour and likely at much more that what was donated. Moreso when its dealing with private/semi-private entities. Cronyism 101. Even if Government are interested to acquire their choppers, it must be via open nego with no favours given, no favours asked.

    We spend so much time here complaining about how rotten things are today and here you are suggest on adding to that.

  6. @fadiman
    The EC725/H225M has an unsettling rate of accidents caused by parts design failures. The Blackhawk is a proven more mature and better supported chopper platform in the current and foreseeable future. FYI for medium utility roles, all 3 branches of ATM only need civvie spec S-70i at mere USD13-15million each right off the production line. A steal considering EC725 cost USD20million with far less user base and support. If all of them, for their various requirements, could transition to Blackhawk (as the US Armed Forces did), it would simplify procurement, spares, servicing, upgrading, operations, training, cross functional usage.

  7. boustead is 100% owned by LTAT.

    so how do you do national interest projects?

    In indonesia anything flying will always go to PTDI. Anything small arms and tanks will go to PT PINDAD. Ships will always be built by PT PAL.

    In korea anything flying will always go to KAI. Ships will always be built by both Daewoo and Hyundai. Does korea do open tender for KF-X or Frigates?

  8. I think it’s possible to do open tender for frigates (or other ships), as we have multiple shipyards now (Destini, Boustead, Shin Yang etc). The best way I believe is to have the Navy select the base design and systems then do a RFP from the yards. At least this way the Navy gets the systems that it wants/needs, the rest are added options from the yards themselves.

    Or spread the build. Then you spread the risk, and not put all your eggs in one basket

  9. MAS then-owned by Government was also national-projected by TR and M, and from that we lost millions of taxpayer money in that shenanigan. Boustead (or at least BHIC) is in deep doodoo. Give a few million RM of unused choppers for a lifeline of a few billion RM, I’m sure Boustead would be happy making that deal with you.

  10. @…
    To add. I have pointed out before, even US defence industry is riddled with cronyism whatmore Indonesia or Korean which is closely tied to a few players. So if people complain about how things are done within the industry and want to change it for us, then let’s do it. Don’t talk. And let’s be consistent, if its open tender then do it all the way.

  11. @ASM
    The best and most transparent way forward is for TLDM to lay down the performance specs and criteria (no mention on systems preferences) as detailed as possible. Then up to Kementah & Government to source the various platforms and systems that will meet these requirements via RFP. Once Kementah & TLDM have sorted and shortlisted the appropriate vendor, platform & systems, the Government shall call for open tendering from these shortlisted. Even if say, BHIC & SY so happens to offer exact packages, the Government could decide to split the deal between both as you have suggested. Thereby reducing risk and interference from other parties and doubling the build speed of the project.

  12. @joe
    The difference with Western national interest development is that their corporations actually produce functioning and even top-notch hardware, whereas we are still struggling to get out of the Age of Sail apparently.

  13. On the topic of helicopters, we can have a common platform for all three services (or 4, if MMEA is in) right? Like the US does with its blackhawk, One common airframe with specific variants tailored to the needs of each service.

    And if the Cougar was that bad, why did the RMAF choose it?

    Reply
    It was bought at the right time.

  14. ” MAS then-owned by Government was also national-projected by TR and M, and from that we lost millions of taxpayer money in that shenanigan”

    Oh please don’t start with that. A real disaster that’s for sure, and one we still unable to recover from.

    And I am not sure putting that German (or Austrian) was a good idea either, I believed he sold off MAS maintenance division which was making profit, and then cabut to….Emirates. Methinks it was his plan from the get-go to sabotage MAS from the inside then get those maintenance contracts to Emirates instead

  15. Am loving the comments here. But please, easy on the comments regarding Tun M. He gives me heartburn. And yes! His shenanigans with our previous defence buys did land us in the present predicament…

  16. @Chua
    The difference is, you don’t get to see the many other failures and only a few percentage of what they developed matures into actual hardware and of that only a certain few gets adopted. The US spend Trillions of USD in their defence industry development YEARLY and only a few hundred billion USD hardware gets bought, does it make economic sense more than ours?

    @…
    I want to recover back what was spent (money, time, effort) on LCS project and because TLDM needs these vessels. It is to rescue these ships in need, not Boustead! You OTOH willfully suggesting we continue to propagate cronyism despite that TUDM hadn’t made any efforts to get these Boustead choppers. When you point a finger at someone, 4 more points back.

  17. @Chua

    Nahh…we are not that bad. THHE-Destini seems to be going on fine, MMEA is set to get its first Damen 1800 opv by the end of this year.

    I think at the moment our shipyards should stick to non-stealthy ships; something like the Keris LMS should be doable over here.

    @joe,

    I think it’s better to let RMN decide on ship class itself plus the key sensor and weapons suite as RMN is the end user and knows best how the ships will fit in their strategy. I feel that at the moment our shipyards do not possess the know how and experience in naval designs if modifications are required to be made to the original ship design.

    IMO let the shipyards improve their shipbuilding capabilities by building foreign designs. To further reduce the risk, have the first 2 vessels built in the manufacturer’s country, then the remainder of the order to be split among the selected 2-3 yards with supervision from the design owner.

  18. @ASM
    “Like the US does with its blackhawk”
    Exactly!

    “why did the RMAF choose it?”
    The crashes related to design failures didn’t happen until after we bought them. The entire fleet were once grounded for sometime though. Besides, we bought them because the Nuris were going out of commission so something was better than nothing back then.

    @Taib
    Those who do not learn from history are doomed to repeat it.

  19. @…
    Let me just make it clear. In my comments pertaining throughout the LCS & Boustead articles and replies, I have never, ever said that Government should rescue them with our money. Never.

    I only opined that more money should be used to complete this LCS project as best possible and then use the full legal force to seek maximum possible restitution from Boustead/BHIC. I don’t care if that means them going under and having to sell off to a professional shipbuilder, in fact that is exactly what I said.

  20. Of course there is a thin line between national interest of maintaining national defense capabilities and cronyism.

    in national defence, if you want to maintain a capability in country, such as aerospace maintenance, ammunition making, shipbuilding etc. ; of course you will give it to the same factory/location as a small country cannot afford to have multiple defence industry players doing the same thing.

    so it is a given that most contracts will go to just a few players, such as Airod, Boustead etc. that has the capability in country to do it.

    It also happens in most countries that wants to have their own defence capabilities.

    There is a lot of times that capabilities are done through direct nego and no open tenders done.

    UK for example just recently does direct nego to get JLTV from USA and Boxer IFV from Germany without any tenders done. So is that cronyism?

    So what can be considered cronyism? IMO when it is directly given to a party (not government related) that puts in no major added value to the contract. Like the direct nego for Starstreak for example. But direct nego to airod for example cannot be considered that (and can be considered national interest) as airod does most of the work themselves, and they need constant work to maintain the capability (human resources and facilities) to work on our aircrafts.

    So what happens if you dont constantly use airod? then the capability goes away and airod will close down.

  21. @joe
    >”does it make economic sense more than ours?”

    Actually yes it does, for reasons. 1) the US MIC is cheaper than Europe, beat USSR and still outperforms China, for only a little more than Singapore spends in GDP fractions; 2) nothing in the world makes LESS economic sense than ours.

    Except maybe daylight robbery.

  22. @…
    Your examples are erroneous. The UK haven’t yet finalised JLTV but merely preselected them for first phase trialing, despite USA approval its not yet a done deal and it needs to go thru a series of suitability trials. The same with Boxer having failed in a previous selection competition. Both cases the equipment were competing/competed openly and direct nego only happen AFTER not before selections were done.

    What you described about cronyism is just one part. Having preferential bias and actively pushing towards your choice despite the competitors offer could be cheaper or better is another face of cronyism. You can structure the competition requirements to the exact of what you want, that is not wrong, but if say a Chinese competitor offers specs that exceeds and comes at cheaper prices and clears all security levels, it comes to the salient points between it and the others and if that Chinese vendor still comes out tops, not choosing it shows a preferential bias that could lead to suspicion of cronyism.

  23. ” Huh, you must be the first I know to say spending more and getting back less makes perfect business sense ”

    You said the same thing about the gowinds, that it is okay to spend rm9 billion to get just 2 Gowind frigates.

  24. @Joe
    “Huh, you must be the first I know to say spending more and getting back less makes perfect business sense.”

    Which part of what Chua said does reflect the above? Comparing what US spent in total vs what they’re getting in their hardware as a fraction of their defence spending is not an easy task. They spent so much in terms of cutting edge R&D. What do we spend in terms of R&D?

    Honestly I really don’t know if there’s a country in this world who’ve spent so much and getting so little in return as compared to us.

    – NGPV
    – SGPV
    – AV-8
    – Keris class
    – Scorpene

    What’s the per unit cost for each of the above? What was dumped in in the name of R&D, national interest BS, ToT?

    Or maybe ask … who likes to calculate.

  25. There’s no R&D involved in Scorpene,no? They were delivered directly from France, but maintenance is still done here. The Keris-class ships were supposed to be built here but after renegotiation built in China instead with the price being reduced. Dunno whether they are worth the price though.

    NGPV and SGPV are complete disasters, that’s for sure.

    I guess that without proper defence policy in sight and no changes to the current procurement process this debacle will provide continue in the future. Unless we can somehow remove the lingering Mahathir influence.

  26. Sometime ago an MoU was signed between Japan and Malaysia related to defence matters; specifically regarding technical cooperation and equipment transfers?

    Anyone knows the specifics of this MoU? And with the change in government this year does this affect the MoU too?

  27. @joe
    It is not possible to hide bad financial decisions indefinitely. The system can look good for decades and decades but the truth will always come out and reveal the rot inside. It is a question of pure mathematics – it is impossible to hide money flowing out of the system. Bail water from a sinking ship as hard as you may, someday it will still sink.

    It happened to USSR and Mao’s China, and is happening now to HK and the EU – they’re staring down the barrel of the gun and finding ways out.

    USA? The US system has outlasted its peers, and without giving up its superpower position and the military might that comes with it. We don’t know yet if it will win the race, but at least it outran the competition. That tells you that, whatever its shortcomings compared to an ideal system absolutely perfect and free of sin, it is at least better than the alternatives.

    In our case we often get less than nothing for our expenditures. In fact, as I mentioned in a long post sometime back, I predict based on our financial data that unless a major change happens, we will literally shrink… or rather, our shrinkage will become evident. In terms of ATM? 30 battalions shrunk to 20. 2 frigates instead of 6. LCA not MRCA. 200 APCs to replace 600. 50 howitzers to replace 100. And so on.

    In financial terms that is called a “depression”, not a “recession”. If you want to see countries in more or less permanent depression, you can look at most of Africa other than SA. That is a very big teladan right there for us, if we can see it, acknowledge it, and take the right steps.

    But will we?

    P.s. sorry if this got too philosophical. But the question you raise is rooted in philosophy – what exactly does it mean to have transparency, governance, justice, and what are its long-term financial effects.

  28. @…
    Because we need the ships? And how many times did mention its not the end all be all as the Government must seek to get back whatever money they can claim? The extra money goes into the ships not into someones pockets unlike your trade deal.

    @Hornet Lover
    The point I made is defence R&D is very inefficient no matter where its done, has very little positive returns and you only see the “successes” of USA because they produce and export more but what you don’t see is how much money is thrown into it. Even their politicians railed against this endless expenditure. The only difference from us is, far richer countries like US, EU, Russia, SG, Japan, can afford to suffer failures and mistakes unlike us. But just because we fail in certain areas don’t mean we aren’t incapabled. Don’t look down on our local capabilities, we can built high tech ships & armoured vehicles, we have radio systems(Sapura) & ordnance(SME) that are exported worldwide, but if it were not our own designs & creations, we shouldn’t pandai-pandai alter & customise design & specs to our liking because then we don’t know what we’re doing.

  29. @ hornet lover

    We got our scorpenes for similar price to what india and brazil got them. we got lots of knowledge and experience in refitting them in country. We even created our own robotic hull coating blaster/remover (a task usually manually done) that amazed even the french naval group people.

    The gowinds if it was done according to plan, is also priced accordingly, similar to say what thailand paid for their daewoo frigate. What happened is someone changing things after it was already in build, needing additional costs and redesign times, that caused the program not to complete any ships to date.

    kris class exorbitant price is to repay chinese help to settle 1MDB.

    NGPV is a combination of german overengineering and PSC ineptitude.

    AV8 is inclusive of setting up assembly in malaysia, R&D costs, denel turrets and ingwe missiles. oman pars contract for example is cheaper as it does not come with the 2 man 30mm turrets, only the 1 man 25mm FNSS turrets. If you look at UK Boxer contract price, it is around the same price as our AV8 too.

    So far most of MMEA programmes are relatively on time and on budget, so there is proof that we can do things properly.

  30. @ joe

    “The extra money goes into the ships not into someones pockets unlike your trade deal”
    i fail to understand how boustead will give up those EC225LP because it ALREADY GOT lots of contracts will line somebodys pocket. Boustead is a LTAT company for god’s sake. Even not giving up those helicopters they will still get contracts for airbus helicopters ISS, submarine ISS and others because it is a part of “national interest” to keep those capabilities in country.

    “The point I made is defence R&D is very inefficient no matter where its done”

    If that is the case, any R&D is inefficient as R&D spends tons of money without a direct seen benefit. Without R&D there will be no new defence weapons anywhere. You wont have a Sukhoi carrying western targeting pods, IFF, MAWS and can drop western laser guided bombs. You wont have french designed ship carrying norwegian anti-ship missiles. Even the seemingly off the shelf MMEA Damen 1800 OPV has R&D done on it as it deleted the hangar for additional crew accommodations.

    It is also mainly not a problem of R&D. It is a problem of specification creep, perpetually moving goalposts as somebody cannot say okay this is already set in stone and just build it as per agreed. What happened also to indian LCA. A supposed MiG-21 replacement suddenly needs to be better than F-16 (which is somewhat impossible due to the small size). They should have just build the Mk1 ages ago and be done with it, but no, it is “not a capable fighter” and with it endless R&D chasing always moving goal posts. That is what we need to avoid. Without a perpetual moving goalpost, things will have a clear timeline and can be completed on time and on budget. Something we can learn from south korea for example. But we have done it before too, like quietly all the AV8 has now been delivered to the army for example.

    Reply
    No, not all of the Gempita have been delivered to the Army

  31. @…

    “What happened is someone changing things after it was already in build, needing additional costs and redesign times, that caused the program not to complete any ships to date.”

    I’ve heard of this too (think it was Luqman who said it) but so far no indication whether the changes came from the gov side or RMN.

    “We even created our own robotic hull coating blaster/remover (a task usually manually done) that amazed even the french naval group people. ”

    I am not surprised by this. Talking from personal experience, I’ve seen our people developing good stuff surprising even those from outside, but then along come the overambitious management guy and ruined everything with unrealistic project targets.

    I got myself tangled with one, started OK even managed to get the Japanese guy impressed then our GM (a local) decided to “forget” about the project since it didn’t really benefit him anymore.

  32. @joe

    I was referring to your reply to Chua which carried the tone implying the US is getting so little hardware for the total amount spent. Now you’re bringing in the factors of high R&D cost which just disprove your point and prove Chua’s.

    What is the fact of the matter?
    Say US is getting 10% worth of hardware for the total defence expenditure spent, and a huge sum is spent on ‘wasted’ R&D.

    What are we getting? 9 billion for 2 gowinds? And how much is spent in the fancy name of R&D etc? What is the return, for some country like ours which can just go and buy off the shelf products? We should be able to get a higher percentage of hardware compare to those that are performing R&D. But are we?

    Even if there’re money spent on R&D, maybe I can safely say that 99% is money down the drain, as those are nothing more than middleman’s cut. We shouldn’t just close our eyes and buy into what the politicians said, in the name of ‘national interest’.

    I’m not doubting our local talents’ capability. But I believe they can’t progress too far if the way things are going in country maintain as it is. They are better off working for foreign companies in foreign countries. But I won’t want to go into that.

  33. @…

    About Scorpene. You forgot about the EU 114M paid to a certain Perimekar which was ‘owned’ by a certain ‘baginda’s wife. That’s officially paid as what? Wang pengurusan projek kah?

    About AV8. This is just like the first Proton Saga which is a locally assembled Lancer, and it should stays that way. I don’t think Dr. M is wrong in predicting there’s a future in local automative assembly as it has a much bigger market compare to the strictly local only 200 biji APC market. So why set up a local assembly plant if it’s not making any economical sense? Even if there’s a follow on order, for how many more? Will Saudi buy from us?

    About the NGPV. Is the point ‘someone changing things after it was already built’ going to cost so much to the project? I’m not doubting it could hurt the project badly, but does anyone know to what extent it caused the extravaganza cost overrun, up to few times the original price? It doesn’t sound logical, as BNS would be better of restart the build from scratch and still cost less money. This is something we need to ponder as we might be lead to someone throwing smokescreen to cover up something bigger.

  34. @…
    As I mentioned way above, the Goverment is already giving help by extending such contract extensions, by beholding to Boustead it just helps to further perpetuate the contract extensions already given and since Boustead had “donated as national service” the Government will find more difficult to find others via open tender. Is BHIC the only local shipyard capabled to do refit, maint, & upgrading naval vessels? Bollocks! Plenty of other local shipyards could do the job if given the chance but perpetuating contract extensions to Boustead won’t given them that opportunity.

  35. @Hornet Lover
    How does it disproved? If US were spending Trillions and 90% gets wasted with 10% returns that is still a 90% waste from a sum far higher than us. Even if we got “only” 1% return, how can anyone judge 10% return is fantastic and 1% is total failure? No! Anything that doesn’t return a positive nett benefit is failure! It doesn’t matter if the returns are 1%, 10% or 40%! A loss is a loss.

    I’m not saying ours is acceptable, far from it if you read my comments about this contract auto-extension, but I’m going to stick out and say USA one isn’t the benchmark for success like some here implied. Their system is just as riddled with cronyism, corruption, patronage, wastage, failures, and blood spilled, but we don’t see all these because their “success” masked all of it happening behind.

  36. @ joe

    “You forgot about the EU 114M paid to a certain Perimekar which was ‘owned’ by a certain ‘baginda’s wife”

    i did not. Even with that, our scorpenes still cost the same as india and brazil (so you must ponder who in india and brazil got similar kind of moneys too)

    ” So why set up a local assembly plant if it’s not making any economical sense? ”

    Why in the future we must only do local assembly of land vehicles if we are intending to buy them in big numbers. Also why to maximize the sunk investments of the AV8 we need to buy more of them, to create a fully AV8 brigade. A rojak brigade of wheeled and tracked vehicles is not the way to maximise the unique capability of both different type of IFVs.

    ” on the SGPV ”

    It started with the design change, and the issue snowballed with the government change, the inability to make decisions to move forward, and the inability to decide to put in more money to pay for the design change. It caused the build to grind to a halt, and the need to pay lots of things due to no work being done. Why it is very2 important not to make major changes once the “GO” decision for a project has been taken.

    Reply
    I have spoken to an experienced engineer on the issue of whether any late design changes was the main reason of the LCS, he said a competent shipbuilder would have dealt with any design changes without much delay to the project. Again AFAIK as there is no major design changes that would have hampered the ship construction

  37. Let me add that if one were to ask me; “Is the USA defence industry more open, more transparent, more competitive, more result oriented, than our own?” Then my answer is YES.

    But is it the benchmark for openness, transparency, spirit of competition, and selection based purely on evaluation results? Then my answer is NO.

  38. Marhalim said:
    “I have spoken to an experienced engineer on the issue of whether any late design changes was the main reason of the LCS, he said a competent shipbuilder would have dealt with any design changes without much delay to the project. Again AFAIK as there is no major design changes that would have hampered the ship construction”

    Somebody blow this issue to protect their incapability or corruption.
    Who blow this major design changes issue? He could be involved in this humiliated project.

    Enough is enough. There is no need ToT or local defence industry issue or local partner in defence procurement. Regulation in defence procurement muat be review. This regulation is not helping local defence industry. It is only feeding the shark.

  39. @…
    You’re taking my replies as Joe’s.

    So from Marhalim’s reply you should know that the so call design change issue shouldn’t cause the NGPV to be 3 times the original cost.

    @Marhalim

    So looks like my suspicion over the issue is logical. Someone just want to use some crap reasoning to cover up the incompetency and overcharging.

  40. @ hornet lover

    It is not solely because of the change of design. But the change of design started all the troubles that is snowballing from that moment on, as the design changes need more money, so late decisions on that, then comes the change in the government etc etc.

    indecisions because of the changes cost delays, and it snowballed into what it is right now.

    If someone thinks that i have anything to do with this, FYI i dont even work in the defence sector.

    Do i wish that the gowinds worked out for malaysia? yes i wish it was, as it is a great state of the art ship design and we should be getting 6 of them. But the current state of the program, it is better to cut our losses, and use all the already bought equipments and weapons for those gowinds into a new ship by a new builder that can finally deliver 6 frigates on time and within the specified budget.

  41. @joe
    Whose defence industry is doing better?

    You are impressed with the trillions they sling about but really it is nothing much; other than factors of points of diminishing returns and economies of scale, millions and billions and trillions are largely the same. The laws of finance don’t change that much.

    >”their success masked all of it happening”

    My point is not that it is non-existent. My point is that it is less than others.

    You don’t have to run a minute mile to win the race.

  42. @joe
    “Whose defence industry is doing better?”

    I will copy what I said; (“Is the USA defence industry more open, more transparent, more competitive, more result oriented, than our own?” Then my answer is YES.

    But is it the benchmark for openness, transparency, spirit of competition, and selection based purely on evaluation results? Then my answer is NO.)

    You may be enthralled by USA defence industry complex but I’m not. There are others which would be the gold standard for me.

  43. @ joe

    List down countries that you think is the defence procurement benchmark for openness, transparency, spirit of competition, and selection based purely on evaluation results?

    For example Singapore has 0 transparency on their defence procurements. Almost all being manufactured by ST Engineering companies and almost all have no open tenders at all. But did they get their moneys worth of defence equipment? Yes.

  44. @Chua
    My benchmark would be the Swiss arms industry. Their stuff are pricier but you do get the performance edge over likewise competitors. They sell based on those merits, not politics. And they do sell, go ask SIG, RUAG, the iconic Swiss army knive, a civvie telco equipment maker I knew also makes mil tech stuff. All good reliable stuff, just like their watches. You really do get what you paid for. Whatmore being neutral country for hundreds of years, they don’t seek to test proven their stuff onto others.

  45. swiss defence procurement benchmark for openness, transparency, spirit of competition, and selection based purely on evaluation results?

    They previously selected gripen E/F which is placed last in their own evaluation results.

    they dont tender out their training aircraft contracts as they buy whatever pilatus builds (they buy every type of pilatus trainers actually, even like the pc-9 they dont really need it) to support pilatus as a local company.

    they also buys hundreds of oerlikon guns, way more than they need as oerlikon is a local company.

    almost all swiss aircraft maintenance are given directly to RUAG as it is a local company.

    so in a way how is that supports your notion of openness, transparency, spirit of competition, and selection based purely on evaluation results??

  46. @joe

    Your comparison of Swiss armament against the US arms industry is totally invalid. Why, because there’s no basis to compare. Did Swiss ever produce something remotely near the F-35, F-22, B-2, or Aegis Cruisers? Oh, they don’t have a Navy. All you can compare is some small arms, armoured cars and that’s it. Btw, if it’s so efficient then the US Marine would have bought the MOWAG Piranha from the Swiss instead of asking GD land system to produce it in Canada. Which in return showed that the US is no bumpkin, as they know when to get outsider to produce equipment for them.

    Wait until they have something of a similar complexity and when it’s sold at a comparable price to what the US have to offer then you can say on a whole their R&D + Manufacturing + procurement + political influence + business influence is better or worse.

  47. @Hornet Lover
    Of course they aren’t all encompassing as the USA. They don’t have the budget nor industry for that and they know it, so they focused on those they do, and they do it best. Speaking about MOWAG Piranha, did you know it was adapted into Canadian LAV3 that was later adapted into LAV-25 for US Marines? So yeah, you just reinforced my point. Thank you so much.

  48. @joe
    I think my original comment was too long for the system, so here I’ll post the short form

    Switzerland is the 3rd richest country in the world per capita

    It has a population of 8.5 million, GDP of USD 700 billion, and federal budget of $250 billion

    However the defence budget is only $5.3 billion, or 0.75% of GDP. That is less than half of NATO’s recommended benchmark of 2%

    The Swiss Armed Forces comprises ~22,000 active, made up of 3,000 regulars and 19,000 conscripts. The conscripts train for 18-23 weeks at age 20, and then have minimal training each year thereafter until they’re 25

    The SwAF generates 2 armoured and 1 mechanised brigades, 18 reservist infantry battalions, and some special forces. Air Force comprises 54 F-5 Tiger IIs, 31 F-18C/D Hornets, GBAD of Stinger, Rapier and Oerlikon cannon.

    However active standing forces are said to be just 1 infantry battalion, or even less, though of course more troops and tanks will be in operational training.

    A full-strength armoured brigade deploys 1 recon battalion, and 3 mechanised battalions. Each brigade comprises about 56 Leopard 2A4s (scheduled for an upgrade to something like 2A6 standard) and about 84 CV90 IFVs, and numbers about 5000 men. The recon battalion operates “Eagles”, Swiss-modded Humvees armoured to Stanag 2.

    The “mechanised brigade” appears in practice to be a divisional troops unit rather than a manoeuvre element, with 2 artillery battalions and 2 recon battalions. The artillery units are equipped with M109 155mm SPGs and will soon add 120mm mortars on Piranha APCs.

    The reservist infantry battalions are equipped with M113 APCs and Piranha APCs. Infantry crew weapons are Browning M2 machine-guns, 81mm mortars and Panzerfaust 3, soon to be replaced with N-LAW. Piranhas with US BGM-71D TOW-2 missiles provide long-range anti-tank fires.

    From a procurement point of view, of course they have to buy and not build, but they too are not above requiring certain local industry considerations. For example the Hornets were assembled locally, and some other stuff too, when they could easily have been bought wholesale off the main production line. In general however they do not bother wasting money on locally-built hardware.

    You mentioned the MOWAG Piranha, which by the way is also the genesis of the Stryker via the Canadian license-built version. However the base Piranha itself is very different from the LAV and other descendants, which include many key systems designed by General Dynamics, such as the armament, sensors, etc. MOWAG invented a useful base chassis but not the systems that make it a highly-capable IFV. Eventually MOWAG itself was taken over by General Dynamics. On top of that there is the famous Sig Sauer AG. It too has been taken over. All in all, can’t say they are very successful, industry-wise.

    The only significant current deployment they have is in KFOR Serbia, of 1 infantry-engineer company, all volunteers.

    they seem to have a very tiny and sparsely-equipped army. There is a distinct lack of infantry to support the armour, and few standing troops.

    In my opinion, they could easily make soldiering a well-paying job with the power of the Swiss purse. Surely not a problem for such a rich country.

    Conclusion: Switzerland just doesn’t really care much for their military in the modern day and age. And thus they effectively hollowed out their army to basically nothing.

  49. @joe

    Reinforced your point? Which one? The one that says Swiss defence industry is the gold standard as compare to US, or what? I see it as it disproved your point in total, as, if the Swiss is so efficient ( more efficient than the US?) then the US would have buy it from Switzerland. Sorry, your logic doesn’t work.

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