Doubts hang over NATO and EU's ability to procure quickly from small tech players

Both NATO and the European Union are keen to work with dual-use technology companies and start-ups for the disruptive technologies they seek. Yet each – and particularly NATO – faces formidable challenges to flexibly apply their heavy procurement rules in favour of small players, as officials from both organisations acknowledge.

“We know that SMEs [small and medium-sized enterprises] don't have the capacity to deal with the paperwork since there are certain rules we have to comply with, which limits what we can do to reduce red tape,” said François Arbault, head of defence industry policy at DG DEFIS, the European Commission's defence and space department. He and others addressed the Armed Forces Communications and Electronics Association (AFCEA) Europe's annual conference in Brussels on 14-15 September.

Arbault's unit oversees disbursement of the EU's new European Defence Fund (EDF), worth EUR8 billion (USD9.4 billion) for 2021-27, two-thirds of which will support defence capability development.

“However, we have to do our best to reduce it [paperwork] because if our 27 member states see in 2028 that most of the money has gone to just a few big players or countries, they'll never go for this [the EDF] again,” he said.

As for the allies, they have a dismal, 15-year record of failed attempts to meaningfully reform NATO's procurement rules, be it to rope in innovative small entities or even to accelerate purchases of fast-evolving cyber capabilities from their large established defence players.