Cost-Efficiency in Swedish Defence Procurement : Comparing the view of the Swedish Defence Material Administration and the Swedish Ministry of Defence

Abstract: The Swedish defence has, during the last couple of years, been under major restructuring that has influenced defence procurements as well. Cost-efficiency has become increasingly important in defence procurement due to higher demand from shrinking defence budgets. The purpose of this study has been to compare the view on cost-efficiency between Swedish Defence Materiel Administration (FMV) and the Swedish Ministry of Defence and to discuss the potential differences. In order to compare the views, the study has looked at what is considered as cost-efficiency in Swedish defence procurement and how it could be achieved. The study has also considered the importance of Swedish defence industry in achieving cost-efficient procurements. For collecting data to make the comparison, focus group interviews were used as data collecting method. The use of focus groups has the advantage of allowing discussion and interaction between the participants. The study includes three focus group interviews, two were made at FMV and the third one was made at the Ministry of Defence. When comparing the view on cost-efficiency in Swedish defence procurement between the three groups, there are no clear definition of what cost-efficiency is. However, a definition is suggested that combines the view of the three groups into the following definition; cost-efficient procurements should be good enough in order to satisfy the demand of the Armed Forces throughout the systems entire lifecy-cle. The study also concludes that the objective of becoming more cost-efficient is shared between the Defence Materiel Administration and the Ministry of Defence. However, there are differences on how this objective is to be achieved. The Ministry of Defence wants to use economical measures to make the organization around defence procurement more efficient and thus more cost-efficient procurement. The Defence Materiel Administration on the other hand would like to increase the per-sonnel since that would make it possible to utilize the market in a better way through competitive procurement. The role of the Swedish defence industry is considered by all three groups as important for international cooperation and is said to contribute to cost-efficiency in procurements since the defence materiel market is characterised by barter transactions. With the intention of involving the industry in more parts of the system lifecycle through Public Private Partnerships, the importance of the defence industry will in-crease in order to make cost-efficient procurements.