|
Norway Rewritten – September 2006 Latest News:
Executive Summary:
The Royal Norwegian Navy (RNoN) is continuing with its restructuring and modernization plans as outlined in the White Paper No. 22, With the Armed Forces: Principal Guidelines for the Development and Activities of the Armed Forces for the Period 1999-2002, the Long Term Defense Plan 2002 – 2005 and The Further Modernization of the Norwegian Armed Forces 2005-2008. Several major programs that were identified under the three latest defense documents are currently underway. Four Fridtjof Nansen class frigates are in various stages of construction/fitting out at Navantia in Spain with the fifth unit (first in class) being commissioned into the RNoN on 06 April 2006. The entire class is scheduled to be commissioned by 2010. The Skjold class fast attack craft (FAC) program will also continue through 2009 with the delivery of five additional units. The RNoN is also continuing with the development of the new anti-ship missile (ASM) (Naval Strike Missile - NSM). In regards to the Coast Guard, the first two new Offshore Patrol Vessels (OPVs) are currently under construction in Poland with commissioning to begin in 2007. Several other new procurement programs are also being considered and expected to be under way by the end of the decade including a new fleet replenishment ship (AOR) and roll-on/roll-off cargo ship (AK). Both of these vessels will be built and leased to the RNoN by the end of the decade. Next decade will include planning for a new class of submarine to replace the six units of the Ula class that were commissioned into the RNoN from 1989 through 1992. The sea service will also continue with some modest modernization programs including mission upgrades to the six Ula class submarines and advanced data processing system upgrades for the Oskoy and Alta class mine countermeasure vessels (MCMV). In 2004 the RNoN completed upgrades to the fourteen Hauk class FAC that will remain in service until the Skjold class is commissioned. Additionally, in The Further Modernization of the Norwegian Armed Forces 2005-2008, the Ministry of Defense outlined force reductions to include the three remaining Oslo class frigates, fourteen Hauk class fast attack craft (FAC), both mine layers and the supply and rescue ship Valkyrien by 2010. Currently, the Ministry of Defense (MoD) is planning the future of the Royal Norwegian Armed Forces (RNAF) from 2009 through 2012. The new Defense Study 07 started in 2005 and is expected to be released in 2008. The plan will further propose measures to continue with the modernization effort that began in 1999. With the exception of a new submarine program, changes for the RNoN under Defense Study 07 will probably be minimal as the sea service is currently involved in major procurement and modernization efforts as well as reductions in force levels that are expected to last the next several decades.
Political
Economic Overview: Norway is one of the world’s richest countries, due in large part to the revenues generated from its offshore oil fields. As a result of the high price of oil over the past several years (US$50-70 per barrel), the Norwegian economy is averaging 2.5% growth annually, and the government is expected to continue with budget surpluses for the foreseeable future. Norway does maintain an extensive welfare system that helps propel public sector spending to more than 50% of the nation’s Gross Domestic Product (GDP), and has one of the highest average tax levels in the world. With arguably the highest quality of life worldwide, Norwegians still worry about that time in the next two decades when the oil and gas begin to run out. Accordingly, Norway has been saving its oil-boosted budget surpluses in a Government Petroleum Fund, which is invested abroad and now is valued at more than $43 billion. This accounts for the increase in the national debt while growth remains on the rise. Norway voted against joining the European Union (EU) in a 1994 referendum, but normally adopts and implements most EU directives. Norway is not a member of the EU’s Economic and Monetary Union. Barring any drastic drop in oil prices the Norwegian economy will probably continue to expand at a modest pace for the rest of the decade. Alliances and International Organization Participation Following the experiences of the Second World War, Norway changed its philosophy from neutrality to support for international cooperation, including the need for maintaining a strong national defense through collective security. Accordingly, the cornerstones of Norwegian international policy are active membership in the North Atlantic Treaty Organization (NATO) and support for the United Nations (UN) and its specialized agencies. The end of the Cold War and the trend towards a European collective security structure have greatly enhanced Norway's security situation. In this new environment, Norway faces no imminent military threats. Nevertheless, considerable uncertainty exists with regard to potential future developments, and these developments could entail a series of security risks. These security risks are primarily linked to the future of democratic, social, economic and military reforms in Russia, and the future relationship between Russia and the Western world. Norway's security policy has the following basic objectives: Prevent war and contribute to stability and a peaceful development. Protect Norway's freedom of action against political and military pressure. Safeguard Norwegian rights and interests through participation in international collective security initiatives. Defend Norwegian territory on land, at sea, and in the air against intrusion and attack. Norwegian security is driven by two main factors: Norway is socially, economically, politically, and militarily integrated into the wider European and Atlantic security system. Northern Norway is in close proximity to the Russian base complex on the Kola Peninsula and the military forces deployed there. To ensure its future security, Norway has and will continue to rely upon a strong and stable national defense effort and active membership in NATO. In addition, Norway will continue to play an active role in the Partnership for Peace (PfP) Program, and other collective security and confidence building measures. As a result, Norway is placing greater emphasis on participation in international peacekeeping operations under NATO, OSCE, and UN auspices. In early 1998, Norway published its defense policy in White Paper No. 22, With the Armed Forces: Principal Guidelines for the Development and Activities of the Armed Forces for the Period 1999-2002. The white paper recognized the need for the restructuring of the Norwegian Armed Forces. The Long Term Defense Plan 2002 – 2005 was submitted to Parliament on 16 February 2001, and was meant to continue with the long-term plan to restructure and modernize the future armed forces from 2002 – 2005 and the latest document of March 2004, The Further Modernization of the Norwegian Armed Forces 2005-2008 continues the process. The major goals set under White Paper No. 22, Long Term Defense Plan 2001 – 2005 and The Further Modernization of the Norwegian Armed Forces 2005-2008 include: Reduction of staff personnel (complete). Military base closures, including nine coastal forts and six underwater installations operated by the RNoN (complete as of 2005). Restructuring of the operational forces into joint commands (complete). Personnel cuts of at least 20,000 personnel from 2001 through 2005 (complete). Reorganization of the Army into three organic and three independent brigades (complete). Delay of the Air Force fighter replacement program until around 2010. Recommendations to continue with the Navy’s Sjkold FAC and Fridtjof Nansen class frigate programs (Five frigates and five FAC to be commissioned by 2010). Leasing of up to ten new OPVs for the Coast Guard as the current OPV lease expires (first two units under construction). Although the latest defense document on defense, The Further Modernization of the Norwegian Armed Forces 2005-2008 continues, the MoD is already planning for the future of the RNAF for the period 2009 through 2012. The new Defense Study 07 started in 2005 and is expected to be released in 2008. Under the Norwegian Constitution, the King is the Commander-in-Chief of the armed forces. The Ministry of Defense (MoD) formulates Norway’s security and defense policy, and establishes the main guidelines for all activities of the Royal Norwegian Armed Forces (RNAF). The Chief of Defense (CHOD) with his staff, prioritizes and balances all resources within the RNAF. The CHOD is also responsible for the long-term planning and draft budget proposals within his areas of responsibility. Under the CHOD, the RNAF is operationally divided into two commands; Defense Command South Norway and Defense Command North Norway. Both commands are responsible for military defense in their own districts within the scope of the directives and tasks assigned by the CHOD and the Allied Commander. Each command is headed by a Commander that is operationally responsible to the newly formed (in 2005) National Joint Headquarters co-located with NATO’s Joint Headquarters North located in Stavanger. Key Defense Organization Personalities * Please be advised that the Key Defense Organization Personalities may have changed since this report was published. Ministry of Defense
* For the most up to date information on Ministry of Defense and Armed Forces Personalities, please visit the Norwegian Ministry of Defense website at http://www.odin.dep.no/fd/english/bn.html and the Norwegian Armed Forces website at http://www.odin.dep.no/odin/engelsk/index-b-n-a.html (English) or http://www.mil.no (Norwegian). Department of the Navy
Defense Acquisition
The Royal Norwegian Armed Forces (RNAF) consists of approximately 24,000 active duty personnel, including: 9,500 in the Army. 6,250 in the Navy (including 270 in the Coast Guard and 160 in the Coastal Artillery). 7,200 in the Air Force. 400 in the Home Guard. 400 in the Joint Services Organization. Approximately 200,000 reserve and Home Guard personnel support the active duty force. Additional information on the Norwegian Armed Forces is available on the Internet at http://www.odin.dep.no/odin/engelsk/index-b-n-a.html (English) or http://www.mil.no (Norwegian). Naval Organization
The Royal Norwegian Navy (RNoN), or the Sjøforsvaret, consists of the Navy, the Coast Guard (Kystvakten), and the Coastal Ranger Command. The Navy and Coast Guard currently operate approximately 99 ships and craft, and 28 aircraft. The RNoN Staff, headed by the Chief of Naval Staff, is responsible for the administrative matters, including personnel, training, policy, and budgetary matters. The Naval Staff is a part of, and is co-located with, National Joint Headquarters. The Commanders of the Armed Forces South Norway and North Norway exercise operational command over the Navy ships, Coastal Ranger Command forts, and Coast Guard vessels in their respective areas. The RNoN utilizes the naval facilities in Haakonsvern, Laksevag and Ramsund for operations and maintenance. Additional information on the RNoN is available on the Internet at http://www.mil.no/languages/english/start/facts/navy/ (English). The RNoN currently consists of approximately 79 ships and craft: Six Ula class conventionally-powered attack submarines (SS). Three frigates:
Fifteen missile-equipped Fast Attack Craft (FAC):
Ten patrol craft:
Seven mine countermeasures vessels (MCMVs):
Twenty Combatboat 90N class landing craft, assault (LCA). Approximately eighteen auxiliary ships and craft. The Coast Guard currently consists of approximately 20 ships and craft: Eleven offshore patrol vessels (OPVs):
Nine Titran class patrol boats.
Navy Budget
Currency conversions based on exchange rates for corresponding year. Currency rates for 2006 based on 20 July 2006 exchange rate of 1NOK=.16353US$. Exchange rates for 2007 and 2008 will be based on an exchange rate of 1NOK=.16350US$. Fiscal Year: Calendar Year. In 2004, the Norwegian Ministry of Defense (MOD) had budget overruns of nearly NOK650M (US$103M) plus a standing deficit of NOK220M (US$34.7M) from 2003. Because of this over spending, the Defense Minister decided the entire amount would be made up in the 2005 budget. Because of this, over NOK137M (US$21.6M) was slashed from the Navy budget (with the remainder coming from the Air Force) to help make up the shortfall. In the words of the Defense Minister, "this will mean all but essential vessels will be required to remain in port for the majority of the year." Norway’s current and future defense budgets emphasize the modernization of existing equipment and the acquisition of new modern defense technology. The Norwegian goal is to have more than one third of future defense budgets earmarked for material purchases, which may be possible as the RNAF continues with its restructuring plan through 2005. Cost savings will be shifted to the modernization programs planned for the next decade. Norway’s current defense policy was articulated in White Paper No. 22, With the Armed Forces: Principal Guidelines for the Development and Activities of the Armed Forces for the Period 1999-2002, which was issued in early 1998, and the Long Term Defense Plan 2001 – 2005, which was passed by Parliament in 2001 and The Further Modernization of the Norwegian Armed Forces 2005-2008 was issued in March 2004. White Paper No. 22 and the Defense Plan are also key programmatic and budgetary documents that lay out high-level priorities for future defense spending. In general, both documents endorsed a restructuring effort aimed at strengthening the nation’s ability to participate in international peace support operations. To achieve these ends, the documents envision a relatively steady spending level through 2008 with the budget rising from US$4.7B in 2006 to around US$4.9B in 2008. Beginning in 2009, the budget is expected to increase to around US$5.2B in order to fund programs that are being discussed in the latest defense study Defense Study 07. Defense Study 07 will cover the period from 2009 through 2012. Defense Acquisition and Procurement Process All Norwegian military equipment acquisitions are managed by the Norwegian Defense Logistics Organization (NDLO) offices under the auspices of the Norwegian Ministry of Defense (MoD). The service materiel commands develop requirements, solicit bids, and evaluate proposals/systems based on technical performance and cost, while the MoD and the Defense Command establish overall policies and evaluate offset proposals. Most procurement plans are advertised in the monthly publication Norwegian Defense Contracts, which is issued by the Defense Command on the 15th of each month. Subscriptions for this publication can be obtained on line at http://www.mil.no/flo/english/start/ or by contacting:
Defense procurements are also advertised in the Norsk Lysningsblad (Norway’s Gazette) and, in most cases, solicitations are mailed directly to suppliers known to the purchasing office. At least three bidders are included for each procurement. The MoD does not regularly schedule conferences to announce upcoming military procurements, but it does hold informative seminars in special cases. The sealed-bid procedure is the normal procurement method. Military purchases often are made from selected suppliers. Prior to final negotiations, the purchasing office issues a draft contract. At that point, the offset conditions are negotiated by the MoD and agreed upon in an "industrial protocol" prior to contract signature. Fixed-price contracts are the most frequently used, but cost-plus and incentive contracts are also used. The type of contract is normally not a negotiable condition. Norway’s general contract provisions include shipping instructions, technical documentation, work schedule, delivery schedule, and payment procedures. Each contract will also have special provisions to cover warranties, codification, option rights, spare parts, etc. Norwegian defense authorities require extensive information about bidding companies and their capabilities, as well as information concerning their products. Pre-award surveys to assess technical and financial competency are required for procurements of an extensive or complex nature, and are normally handled by the purchasing offices. As a matter of routine, notices are not sent to unsuccessful bidders. In special cases, contractors may request the procuring agency review its contracting process. The MoD also serves as an Administrative Appeal Authority. Local representation by foreign firms is very useful, if not essential. Most foreign firms successful in selling to Norway have local representation or sales offices, have marketed themselves directly to the military authorities and the procurement officials through product presentations and regular personal contact, and/or they have teamed with a Norwegian company. Offsets: Offsets play a big part in the Norwegian defense procurement process, and successful bidders are generally those who put together the most attractive offset package. The Norwegian Government requires offsets for all acquisitions from foreign suppliers valued at over NOK 50M (approximately US$6.6M), which includes all options. The MoD may also require offsets for acquisitions having a contracted value of less than NOK 50M. Offsets must be at least equal in value to the procurement price (100%), and the offset may be either direct or indirect. In evaluating the worth of an offset agreement, the MoD applies "weight" to individual items in the package. Evaluations are very subjective, but procurement of Norwegian weapon systems, sub-systems, or weapon components (in order) has the highest value, with non-defense commercial offsets being of very low value. Priority is given to offset agreements that have the best potential to take advantage of and augment areas where the Norwegian MoD feels their defense industry can be competitive in the world market. The MoD has designated nine areas of concentration, and anything offered beyond these areas runs the risk of being rejected. The areas are: Computers and software for C3I Systems. Radio-satellite, and line-of-sight communications. Electro-optic systems. Fire control systems. Missile technology. Ammunition and military explosives. Underwater technology and sonar systems. High-speed naval craft. Space technology. A copy of the Norwegian Defense Logistics Organization publication How to do Business with the Norwegian Armed Forces – A Guide to the Norwegian Armed Forces Procurement Agencies, Agreements, Regulations, etc. is available on the Internet at http://www.mil.no/flo/english/start/ (English). Norway is a net importer of defense material, and the number of local firms engaged in large-scale production of high-tech defense equipment is very limited. Only a handful of companies are regarded as important defense equipment suppliers, most notably Kongsberg Defense & Aerospace (KDA – one of the two main business elements of the Kongsberg Group) and Umoe Mandal AS, but a number of firms have specialized in smaller niches of the market. KDA produces several prominent naval systems, including: Anti-ship missiles (ASMs), including the widely exported Penguin and the new generation ASM (Naval Strike Missile - NSM) in a teaming arrangement with Matra BAE Dynamics Alenia (MBDA) and Microturbo. The MSI-90U Command, Control, Information and Weapon System for submarines. The MSI-90U is operational in Norway’s six Ula class submarines, and in the Type 212 class submarines being built by Germany and Italy. The Senit 2000 Combat Management System (CMS) in a teaming arrangement with Armaris. Senit 2000 is going aboard the new construction Skjold class FACs. Sonars, through its subsidiary, Kongsberg Simrad AS. Maritime simulation, Kongsberg Maritime. In addition, the Nordic countries have developed a framework for cooperation in defense acquisition has been in place since 1994. In that year, Denmark, Finland (acting as an observer), Norway, and Sweden signed a Memorandum of Understanding (MoU) to collaborate in the development and procurement of defense systems. Currently, one major joint Nordic cooperative procurement project is in progress: Purchase of a common military transport/anti-submarine warfare (ASW) helicopter for all four Nordic countries (a requirement of 50 - 100 aircraft), with delivery beginning in 2003. On 19 September 2001 Sweden, Finland, and Norway selected the NH Industries NH-90 helicopter to satisfy their requirements. Denmark selected the Augusta Westland EH101 helicopter, breaking from the Nordic countries on this procurement program. Sweden will receive eighteen NH-90s and Norway will receive twenty for the Navy and the Coast Guard beginning in late 2006. Naval Threat – Mission Norway is fundamentally a maritime nation. Most of its citizens live near or on the coast. The nation draws its wealth from the sea, is the second largest oil-exporting nation in the world, boasts one of the world’s largest merchant navies, and its fishing industry makes up a significant portion of the GDP. Norway does not face an imminent military threat to its security. However social and economic instability in Russia remain a major focus of the RNoN’s attention, and will continue to represent a central factor in its assessment of the threat. From the RNoN’s perspective, Russia remains a great power with significant military capabilities close to the Norwegian border. Russia’s failure to fully implement its international commitments making substantial reductions to its tactical forces is a matter of great concern to Norway. The large number of nuclear warheads remaining on Russian soil poses a considerable risk relating both to the safety and security of the weapons and as a potential threat to the security of neighboring countries. In accordance with its wary assessment of Russia’s ongoing internal situation, the RNoN retains, albeit with a lesser degree of urgency, an anti-invasion capability for North Norway. This capability is based on a sufficiently strong national defense and the promise of NATO reinforcements. Norway’s reliance on the ocean, both as a source of economic wealth and as a major means of moving goods, means that the RNoN also must be prepared to defend its offshore economic resources and its vital sea lanes of communications (SLOCs). Protection of its SLOCs are also a necessary component of its anti-invasion capability, since the bulk of NATO’s reinforcements to Norway will travel by sea. Short of war, Norway’s new emphasis on participation in international peace support operations means that RNoN ships may be called upon to deploy to international crises anywhere in the world. This requires the Navy to prepare its deployable assets for operations in a generic multi-threat environment. In peacetime, the RNoN is responsible for patrolling the nation’s large and critically important Economic Exclusion Zone (EEZ). In addition, as a result of the Schengen Treaty, Norway is responsible for enforcing external border controls along its land and sea frontier with Russia on behalf of all the Schengen countries. To accomplish its wartime and peacetime missions, the RNoN has assumed the following tasks in support of Norwegian national security: Intelligence collection and surveillance in Norway’s maritime approaches, primarily the North Cape area. Sea control operations in Norway’s coastal waters. Protection of Norway’s sea lanes of communications (SLOCs). Exercise of national sovereignty at sea. Defensive operations to repel any sea-borne invasion of Norwegian territory. Participation in international naval forces, under UN or NATO auspices in times of peace, crisis, and war. The RNoN has also assumed the following Coast Guard duties: General surveillance and control of the continental shelf, the EEZ, and in the Fisheries Zones around Svalbard and Jan Mayen islands. Fisheries protections operations. Support for civilian maritime activities, including weather reporting and search and rescue operations. Environmental protection operations. Humanitarian and disaster relief operations. The RNoN and Coast Guard currently consist of around 99 ships and craft. Most are fairly modern vessels built since the 1970s. Although its primary mission is defense of the nation, the RNoN has since the end of the Cold War, continued to align and modernize its forces taking into account the joint security structure offered by the UN and NATO. Since 1998, the RNoN has been restructuring and modernizing its forces in accordance with White Paper No. 22, With the Armed Forces: Principal Guidelines for the Development and Activities of the Armed Forces for the Period 1999-2002, Long Term Defense Plan 2001 – 2005 and The Further Modernization of the Norwegian Armed Forces 2005-2008. These three documents provide the direction for the restructuring and the funding of RNoN through 2008. A new white-paper is currently being developed by the MoD and will provide direction for the RNAF from 2009 through 2012. Known as Defense Study 07, the document is expected to be released in 2008. Major naval programs have already commenced or will commence over the next several years to meet the goals of the three defense documents. Additionally, other long-term plans have been conceived that may be funded later in the decade under the next defense plan. New construction programs are as follows:
Additional programs that were authorized under White Paper No. 22, With the Armed Forces: Principal Guidelines for the Development and Activities of the Armed Forces for the Period 1999-2002, Long Term Defense Plan 2001 – 2005, and The Further Modernization of the Norwegian Armed Forces 2005-2008 are as follows: Mid-life upgrade for the Hauk class FAC to extend their services lives until 2015, which was completed in 2004. Continued development of the new-generation NSM anti-ship missile (ASM) system (will begin entering service by 2007). Modernization of the combat management system (CMS) and battery upgrades on the six Ula class submarines (complete). Additionally, force reductions outlined by the Ministry of Defense include: Decommissioning the three (now two) remaining Oslo class frigates as the Fridtjof Nansen class enter service. All will be decommissioned by 2010. Decommissioning of all fourteen Hauk class by 2009 when the last of six Skjold class FAC commissions. Decommissioning of two Alta/Oskoy mine countermeasure vessels (MCMVs) by 2005 (complete). The phasing out of all mines. This will likely mean the decommissioning of the RNoN’s last two minelayers by 2008. Decommissioning of the KNM Valkyrien in 2009 when the last of the Hauk class are decommissioned. Royal Norwegian Navy (RNoN) and Coast Guard New Construction P rojects
* FOC RfP is the First of Class Request for Proposal
|
