WASHINGTON — German companies are jockeying for position as the government tees up massive investments meant to drastically improve the state of the armed forces.

Chancellor Olaf Scholz’s Feb. 27 proposal to ramp up defense expenditures by tens of billions of euros, spurred by Russia’s war on Ukraine, has defense officials in Berlin scrambling to identify spending opportunities that promise fast results, according to several company officials who spoke on the condition of anonymity to discuss internal deliberations.

So hasty is the process that a key official in the Defence Ministry’s acquisition office, Vice Adm. Carsten Stawitzki, signaled to company executives that certain acquisition rules could be outright circumvented in service of quick deliveries. Companies also were put on notice that they should drop outstanding procurement disputes on the docket with the ministry in order to partake in upcoming work.

“It’s all completely ad hoc at the moment,” said an industry official.

The nascent spending strategy appears to coalesce around three objectives, according to industry sources:

  • Clearing the maintenance backlog across the services to get hardware back to the force, even if it means cutting corners.
  • Increasing by 50% the volume of main weapon systems, which could mean more Puma infantry fighting vehicles, more K-130 corvettes and more Pegasus spy planes.
  • Finalizing only longer-term investments for which plans are already on the books. This category includes the Future Combat Air System, a next-generation aerial weapon led by Germany, France and Spain; the Main Ground Combat System, a pan-European tank project; and the Tornado replacement program, which could bring the F-35 jet to Germany in a dual-capable role under NATO’s nuclear sharing doctrine.

A spokesperson for the Defence Ministry did not return a request for comment on acquisition guidelines accompanying the proposed spending uptick.

The prospect of more defense funding also puts the spotlight on Germany’s air and missile defense capabilities, moving companies to position themselves in a market where defense officials have unsuccessfully tried to move past the venerable Patriot system.

Rheinmetall and MBDA Italy signed a memorandum of understanding this week aimed at finding “disruptive technologies and in the national and European defence funds domain” in air defense, per a joint statement.

In that partnership, Rheinmetall bills itself as the air-defense and radar specialist, while MBDA would provide future interceptors.

In the lower-tier segment, German officials are expected to fall back on a setup featuring the IRIS-T interceptor, as proposed by manufacturer Diehl in conjunction with Hensoldt and Rheinmetall in March 2021. The companies’ package of missiles, radars and launch vehicles is meant to intercept aircraft, combat helicopters and cruise missiles, a weapon mix similar to the Russian arsenal used in the invasion of Ukraine.

The former government of Chancellor Angela Merkel quietly approved the export of IRIS-T firing units to Egypt, a controversial deal that became public only after Scholz assumed office. Now, one consideration for a speedier acquisition of an air defense shield is to route some elements not yet delivered to Cairo into Berlin’s stocks instead.

Sebastian Sprenger is Europe editor for Defense News, reporting on the state of the defense market in the region, and on U.S.-Europe cooperation and multinational investments in defense and global security. He previously served as managing editor for Defense News.

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