How to gain access to the defence sector in Germany

The future German government will have unprecedented financial leeway to modernize and upgrade the Bundeswehr and its equipment: In March of this year, the Bundestag decided that the so-called "debt brake" will be suspended for all defence and security spending that exceeds one percent of the gross domestic product. 

This is a blank check for the future government to borrow a theoretically unlimited amount for defence and security. This is also a significant increase compared to the (currently not yet exhausted) "special fund" from 2022, which was limited to 100 billion euros. It remains to be seen how high the new federal government will actually set defence spending, but considerable increases are to be expected.

The specific services to be procured have not yet been determined. It is planned to draw up a priority list for urgently needed armaments in the near future, from which initial details will emerge. 

How will it be possible for foreign companies to participate with their services in this massively increasing defence budget? The usual answer to this question would be: by participating in procurement procedures that are published in advance in the Official Journal of the EU. However, this answer does not apply without restriction in the defence sector anyway, as special procedural rules apply in some cases. These special rules have already been significantly extended for the "special fund" from 2022; the potential coalition partners from CDU/CSU and SPD are also planning to present a new law to speed up and simplify procurement within the first six months of forming a government.

In view of the still unclear situation as to which services are to be procured in which order and the expected simplification of procurement processes, it will therefore be crucial for foreign companies in particular to position themselves proactively with their products. With our experience in the defence and security sector, we can provide you with the following practical tips:

1. Understand the structures in the defence procurement sector
   
   The procurement of defence equipment in Germany is organized on a decentralized basis. In addition to the political level, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw), which handles the actual procurements, plays a decisive role. However, the role of the Bundeswehr Planning Office, which is usually involved in the run-up to procurement measures, in the upcoming decisions on the services to be procured has not yet been clarified and should be carefully observed.
   
    
2. Position your services at an early stage
   
   Particularly in view of the lack of clarity about which services should be procured and in what order, there are currently clear opportunities to position your own products. However, swift, proactive action is required here - once the priorities have been established, it will be very difficult to bring a product that does not fall under these priorities into the discussion.
   
    
3. Make your company known
   
   In general, it is essential that your company, your expertise and your product portfolio are known in the right places. This is the only way to have a chance of being involved in specific procurement measures. Relying on open competition is a risky strategy in view of the expected simplification of procedures.
   
    
4. Look for partners
   
   Establish contacts with established (especially national) companies in the defence industry in order to benefit from their experience and networks and go to market together.
   
    
5. Get professional support
   
   Whether in the run-up to or within a procurement measure - the public client in the defence sector is a "special" customer. Different stakeholders must be taken into account, who regularly have heterogeneous interests. If you are not familiar with the particularities of the German defence sector, you could easily end up with nothing - regardless of the quality of your products.
    

If you need support with your market access in the German defence sector, we can assist you. We have been advising public clients for more than 20 years, especially in the defence sector. As a result, we have first-hand knowledge of the existing structures and the key players in defence procurement. We are happy to share our expertise with you - from the initial contact to support in a specific procurement process.

Michael Brückner