ЮАР планирует внедрение гибкой системы оборонных закупок для поддержки локальной промышленности

The Department of Defence (DOD) has a unique supply chain management (SCM) process within government given its unique security and protection mandate. The terminology used for supply chain activities include acquisition, procurement and in-service support. Acquisition refers to a process of acquiring (either COTS/MOTS [commercial off-the-shelf/military off-the-shelf] materiel or through product development) category 1 (i.e. military specification) materiel and/or services. Procurement refers to acquiring category 2 (non-military specification) goods and services. In-service support refers to activities acquired to support military equipment while in service (i.e. repairs and maintenance). There are three institutions involved in the procurement and acquisition process, namely Defence Secretariat, SANDF and Armscor. The Defence Secretariat has a responsibility to develop and enforce policy on all three aspects of supply chain management (i.e. acquisition, procurement and in-service support). The DAHB1000, DAP5000, procurement and acquisition DODI’s (Department of Defence Instructions), etc., are all developed and enforced through the Defence Materiel Division (DMD) within the Defence Secretariat. The DMD is also responsible to task Armscor for the execution of acquisition and in-service support activities in line with SANDF requirements. The SANDF is responsible for procurement of Cat.2 goods and services via the Logistics Division. Armscor is responsible for contracting with industry on behalf of the DoD to secure material and services per DMD tasking. Armscor is also responsible for technology development activities, which also flow through from the SANDF via DMD taskings. The figure below illustrates the activities involved and the institutions responsible, as well as the interactions amongst them. The applicable regulatory framework for SCM activities includes, but is not limited to, the following policy text: Public Finance Management Act (PFMA) of 1999 National Treasury Regulations, 2002 Treasury-Issued SCM Guidelines, Practice Notes and Instructions Procurement DODI Defence Acquisition Hand Book, DAHB1000 Defence Acquisition Policy for Technology Development, DAP5000 Defence Special Account Act, 1974 PROBLEM STATEMENT The DoD Supply Chain Management is not integrated and as such is ineffective and inefficient. The ownership of the end-to-end processes is not clearly defined and therefore accountability cannot be effectively assigned. Service-unique requirements are not adequately catered for. The processes are cumbersome and not supportive of SANDF operations and the Defence Industry. Furthermore, the processes are mainly manual and untraceable, making them prone to mistakes and inaccuracies. The lack of transparency in the acquisition and procurement decision-making process results in misalignment between industry capability readiness and military commanders’ equipment requirements. CURRENT CHALLENGES The acquisition and procurement environment is currently experiencing several challenges at both process/system level and institutional level. The following are some of the prevailing shortcomings in the procurement system and architecture: The DAHB1000 prescribes a very laborious process to acquire defence materiel. This process is followed for all cases, whether acquiring a new warship or buying a standard assault rifle. This results in lengthy procurement cycles for readily available military equipment, which is avoidable. b. The integrated project team (IPT) that is responsible for developing technical specification for required military capabilities tends to over-specify. Overly specified requirements are difficult to satisfy within existing industry capabilities; and they also limit innovation. The SANDF is deployed in operational environments that require rapid and agile operational responses. However, the procurement process that is supposed to support the SANDF, through integrating defence industry into SANDF capability pipeline, is rigid and inertial. This negatively affects SANDF readiness to fulfil crucial missions. Armscor contracting processes are long and pedantic. Once the DOD (DMD driven) acquisition cycle is complete, then the Armscor contracting cycle begins; but this is equally long and wearing. The procurement and acquisition framework is not conducive to industry-driven innovation, and procurement of innovative solutions. The prioritisation of linear compliance to the National Treasury Regulations without considering the unique requirements of SANDF prime mission equipment modernisation requirements adversely affect the SANDF capability renewal process. The capability planning process is not transparent and hence not visible to industry. This means that local industry only gets information on capability acquisition or modernisation programmes during the request for proposals (RFP) stage. This takes away the local content advantage and adversely affect the local industry. The new public-private partnership (PPP) Regulations were promulgated by Treasury in June 2025, but the DoD is yet to develop an internal process that will ensure such PPP regulations are implemented within the Department. This is a lost opportunity since the new PPP Framework could have been leveraged to provide the required industry support to SANDF’s operational capabilities. It is clear therefore that current acquisition delays arise partly from fragmented process ownership, over-bureaucratisation, and inadequate integration of logistics, asset management, procurement contracting, and through-life product systems management. Further to the above process/system related challenges, there are also challenges associated with institutional posture of the Department. The Defence Secretariat has many critical positions that are vacant, e.g. CDM, Director: Industry Support, and others. This adversely affects capacity to process programme activities. The SANDF does not have supply chain management as one of its core capabilities. Even if personnel placed in critical supply chain positions (e.g. OC of Central Procurement Service Centre) acquire the required experience over time, there’s always a risk that they would be moved through the placement process to other divisions. This results in high turnaround of key personnel and lack of depth in supply chain management capability with SANDF. Armscor is struggling with the erosion of core technical capabilities, resulting in the erosion of capability depth. This in turn results in poor requirements specification documents released to industry, and poor project management of critical SANDF capability programmes. There is primarily a structural misfit between SANDF mission demands and the institutional design of the acquisition and procurement machinery. There is also weak institutional coupling between DOD, Armscor, SANDF, and Industry. DESIGN PRINCIPLES FOR REFORM A reformed defence acquisition framework should be anchored in the following principles: Mission primacy: requirements must begin with SANDF operational requirements, force preparation requirements, force employment obligations, and strategic commitments rather than with historical project lists or vendor propositions. Legality with agility: Public Finance Management Act compliance must remain intact, but internal approval design should remove unnecessary sequential bottlenecks and duplicate review layers. Lifecycle value: affordability must be assessed on total ownership cost, availability outcomes, support burden, obsolescence risk, and disposal implications rather than acquisition price alone. Transparent pre-RFP development: the requirements formation phase should be more visible and contestable to reduce hidden bias, lock-in, and over-specification. The pre-RFP involvement of industry association, academia, research institutions, etc., can only enrich the requirements shaping process. Modular acquisition: the system should favour spiral acquisition, phased capability release, modular standards, and interoperable upgrades instead of monolithic long-cycle projects. This will assist with meeting evolving mission-centric operational requirements. Industrial depth: procurement must be used selectively to sustain strategic local capability as a priority to ensure strategically essential self-sufficiency in chosen capability areas. The uneconomic preservation of non-strategic niches at the expense of what has been identified as strategically essential should be avoided. Performance-based contracting: contracting for availability (CfA) and contracting for capability (CfC) frameworks meet the requirements of the new PPP Framework and are suitable for implementation with the DoD, especially for sustainment-heavy domains. Data-centric governance: digital visibility across forecasting, inventory, maintenance, contracts, supplier performance, and mission availability are essential. These principles are consistent with the SANDF Journey to Greatness (JTG) ambition to optimally employ limited resources to enhance core capability required for mission operations. RECOMMENDATIONS The above challenges require a coordinated, multidisciplinary and holistic approach towards procurement reforms that will see a purposeful overhaul of procurement processes, systems, architecture and institutional framework in order to improve effectiveness and align the enabling environment to the SANDF prime mission equipment requirements. The following recommendations are tabled for purposes of such reforms: There should be formal consideration of buy, make, lease, modify, second-hand, and re-condition options, as well as COTS before MOTS, and this should be embedded as a compulsory decision gate rather than left to ad hoc discretion. Transparency should be enhanced during requirements formation phase through controlled pre-RFP industry engagement. The process should publish capability problem statements, broad performance envelopes, affordability bands, localisation objectives, and evaluation logic, while withholding genuinely classified operational details. This will ensure industry readiness to provide the required products and services to SANDF when the RFP is published. There is a need for a singular overarching ICT system integrating logistics, procurement, asset management, and financial management, along with strategic, operational, and tactical logistics policies, critical spares management, strategic reserves, vendor-managed inventory, and inventory cost optimisation. This should comprise digital backbone covering the following: digital procurement workflows with auditable approvals; master data management for items, suppliers, assets, and contracts; iii. predictive and condition-based maintenance where feasible; integrated logistics support and electronic technical publications; category management for commodities and shared services; supplier performance management linked to availability and quality; vii. cybersecurity and access control designed for classified and sensitive data environments. The point is not digitalisation for its own sake. It is to create visibility, shorten cycle time, improve accountability, and connect procurement to operational availability. The PFMA space should be intelligently navigated with efficiency and agility in mind in order to enable and not inhibit the SANDF capability environment. Treasury concessions should be obtained where necessary to ensure demolition of process-based restrictive red-tape barricades. In order to enable a more agile and integrated SANDF, Armscor, the DoD supply chain, digital systems, and industrial support mechanisms must be reconfigured to support faster capability cycling, modularity, availability-based sustainment, and coalition-ready interoperability. Establish a sub-committee within the National Defence Industry Council (NDIC) that will coordinate multi-department and multi-disciplinary input to supply chain management and technology development activities within the DoD. The modernised procurement and acquisition framework should cater for the following distinct categories through relevant procurement/acquisition processes: Acquisition of MOTS and COTS for immediate deployment within SANDF operational areas. Acquisition of sophisticated military platforms with customisation requirements and local content integration. iii. Development and subsequent production of locally provided defence capabilities through local industry. Procurement of technology development and innovation partnerships through structured engagements of specialist local companies and research institutions. In-service support procurement for sustainment activities of PME Procurement through CfA and CfC for new acquisitions, used equipment and through-life support. vii. Procurement through unsolicited proposals in line with PPP Framework viii. Procurement of Cat.2 goods and services through procurement centres. ARMSCOR REFORMS Armscor should be reconstituted institutionally as the DoD’s acquisition integrator, commercial intelligence hub, and PPP Transaction Advisor for defence-relevant projects: Client role clarity: Armscor should not substitute for SANDF requirement ownership; SANDF defines mission need, while Armscor and DMD shape acquisition strategy and executes procurement support. b. Shareholder compact reform: the shareholder agreement and the SLA should be updated to set measurable objectives on cycle time, portfolio delivery, localisation outcomes, transparency, and support to organs of state and industry. Transparency architecture: Armscor should publish forward opportunity pipelines, pre-RFP engagement calendars, standard acquisition templates, supplier onboarding criteria, and post-award performance dashboards subject to classification limits. Technical capability depth: Armscor should recruit experienced scientists, engineers and project managers to strengthen their capability machinery and enhance readiness to handle the projects emerging out of SANDF requirements. Performance measurement: a new balanced and output-centric performance measurement framework must be developed in line with expectation stipulated in the shareholder compact and the SLA. There should be linkages between the satisfaction (or lack thereof) of SANDF acquisition, procurement and in-service support requirements and Armscor performance output. PPP Transaction Advisor capability: Armscor should establish a dedicated multidisciplinary PPP transaction advisory unit able to support DoD projects through screening, feasibility, market sounding, bid design, negotiation, and contract management in line with Treasury Regulations. In this role, Armscor should maintain standard defence PPP models, standard risk matrices, template performance regimes, and template contract clauses for confidentiality, security, sovereign control rights, data rights, and step-in rights. COLLABORATION WITH INDUSTRY A defence procurement framework that supports innovation must deliberately create upstream collaboration spaces that promotes stronger industry support functions, local market positioning, and pre-tender engagement through bodies such as the NDIC. The institutionalisation of the collaboration framework should be anchored on the following instruments: Pre-RFP Engagement: Involving industry, academia, research institutes, and others prior to the official publication of the RFP can enrich the requirements development process. Such engagement should include: publication of a rolling acquisition pipeline, at least at high level; issue of advance notice capability statements for major projects; iii. structured industry days and academia roundtables; publication of evaluation themes and non-classified requirements logic; use of formal request-for-information processes; post-award debrief discipline; vii. conflict-of-interest management and documented rationale for major pre-RFP decisions. The above would improve fairness, reduce rumours of predetermination, and widen the market for local solutions while preserving secrecy where it is genuinely operationally required. Capability forums: classified and unclassified forums where SANDF problem sets are translated into research and industrial challenge statements. Defence innovation calls: problem-based solicitations for universities, science councils, SMMEs, research institutes and primes to develop prototypes or modular subsystem solutions. Technology transition pathways: structured routes from laboratory or pilot solution into procurement, sustainment, and export qualification. The strongest institutional recommendation is to establish a Mission-Aligned Agile Defence Procurement Framework with Armscor as acquisition integrator and PPP Transaction Advisor, SANDF as mission owner, Denel as strategic industrial platform within a broader SADI ecosystem, and a digitally integrated DoD supply chain as the operational backbone. Such a model would improve equipment availability, speed up decision-making, support local industry and STEM capability, preserve transparency, strengthen Treasury compliance, and create a more resilient basis for both future acquisition and legacy systems modernisation. This position paper was originally prepared for the Defence Industry Lekgotla held in July 2026.