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Finnish Armed Forces Broadens Outsourcing Deal With Millog

Aug. 25, 2014 - 06:35PM   |  
By GERARD O’DWYER   |   Comments
Military Maneuver European Endeavour 2006
A Finnish soldier patrols a military checkpoint near Ulm, Germany. Under a new deal, Millog Oy will provide more extensive maintenance support to Finland's Army and Navy. (Andreas Rentz/ / Getty Images)
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HELSINKI — Finland’s Armed Forces Command (AFC) has broadened its outsourcing arrangement with Millog Oy, the Finnish private sector company jointly owned by defense groups Patria and Insta.

Under a new agreement, Millog will deliver engineering and maintenance services to both the Army and Navy, and also supply material products, such as target acquisition sensors, to the Finnish Armed Forces (FAF).

The original outsourcing contract, signed between the AFC and Millog in 2008, focused on the provision of life-cycle support and repair services for Army material related to non-armored and armored vehicles; and to electronic, missile, and weapons systems and equipment. The eight-year agreement carried a total value of $680 million, averaging $85 million in revenue per year for Millog over the full contract period.

The new, broader industrial cooperation stems from the needs of the FAF’s ongoing defense organization reform, said Defense Minister Carl Haglund.

“After a full assessment, it was concluded that a broader partnership with Millog will benefit the defense reform,” he said.

Expanding the FAF’s outsourcing industrial partnership is regarded as a more value-added, cost-efficient option than developing the Army’s and Navy’s own in-house equipment service and maintenance capability, Haglund said.

“We expect savings from the broadened agreement of about $40 million during the lifetime of the six-year contract period,” said Haglund.

Under the new agreement, the operations of existing garrison-based material service and maintenance (SAM) workshops, currently run by the Army and Navy, will be transferred to Millog-operated centralized SAM centers beginning Jan. 1.

The reorganization will impact about 366 personnel currently working in Army- and Navy-run SAM centers. The affected staff will relocate to the new Millog-run SAM units. The reorganization involves no staff layoffs.

A target acquisition sensors’ contract reached between Millog and the AFC is worth $36 million. Under the deal, Millog will deliver its LISA Hand-Held Target Acquisition System (LISA- HHTAS), sensors and accessories to the FAF in 2014-2017.

“We are actively focusing on international markets, so this contract is an excellent reference point and further strengthens our presence in the high-quality optical devices space,” said Veli-Matti Kohtamäki, the head of Millog’s sales and marketing division.

Manufactured by Millog in Finland, the lightweight LISA-HHTAS is a monocular thermal imager with capability for range measurement and target acquisition. It is designed for use by forward observation squads, infantry and special operations units. Main features comprise an uncooled thermal imager, optical day channel, eye-safe laser rangefinder, digital magnetic compass, GPS, wireless connection, C41 connectivity and image capture with target information. ■


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