And Then There Were Three

September 2011
By George I. Seffers, SIGNAL Magazine
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NATO Secretary General Anders Fogh Rasmussen announces that the NATO defense ministers have approved a reformation plan.

NATO initiates the largest agency realignment in alliance history.

By July 2012, NATO officials expect to have established three new agencies—the NATO Procurement Agency, NATO Support Agency and NATO Communications and Information Agency—as part of a major reform effort that will reduce the number of agencies from the current 14. NATO now is in the process of implementing agency reform, as well as overhauling its command structure. The massive reorganization is an effort to become a leaner, more efficient and cost-effective organization better able to deliver capabilities to clients, including warfighters.

NATO’s secretary general, Anders Fogh Rasmussen, announced in June that the NATO defense ministers approved the plan for implementation. “We have agreed to streamline the agencies which run individual NATO projects, such as ground surveillance and strategic airlift. As a result, our agencies will become simpler in structure, while staying effective in their work,” Rasmussen stated. “Together, these reforms will make NATO more affordable—offering even better value for our allies’ money. They will make NATO more effective—focusing on the capabilities and command systems we need. Above all, they will deliver an alliance which is fit for the future—defending us against the threats of today and of tomorrow.”

The move creates a new powerhouse agency, the Communications and Information Agency (C&IA), which is responsible for providing information technology systems support for NATO-led operations, enhancing information and cyber defense, and ensuring a common, standardized information technology architectural design across the alliance. The C&IA will be the principal capability deliverer and service provider for a full range of requirements holders and customers; will ensure that requirements are balanced with resources; will be committed to delivering capabilities and services efficiently; and will exploit many economy-of-scale opportunities, according to NATO officials. The agency will perform most of the functions of four current NATO agencies—Communication and Information Systems Services; Consultation, Command and Control; Air Command and Control System Management; and the Active Layered Theater Ballistic Missile Defence Program Office. It also will take on the functions of information technology support staffs in other agencies.

The establishment of the new C&IA offers the potential for improving the current situation by initially consolidating and then gradually optimizing all elements that currently are engaged in communications and information. The procurement agency will, in part, look for ways in which the member nations can come together under the NATO umbrella to develop and procure certain capabilities. The support agency will focus on maintaining and upgrading NATO-owned systems and some equipment owned by multiple alliance nations. So, for example, rather than each nation purchasing 100 spare parts, multiple nations could join to purchase in bulk, reducing costs.

Currently, NATO has 14 agencies and 6,000 employees spread across seven nations. Last year, the organization’s budget was about €10 billion ($14 billion). The alliance has been looking seriously at reform since 2002, according to Richard Froh, NATO deputy assistant secretary general for defense investment, but it was the financial crisis that ignited the effort. “There’s been for some time a concern about NATO’s agencies. They’ve grown over the years,” Froh explains. He adds that, as with any government bureaucracy, the agencies are not easy to eliminate once they have been created. Many were established to meet a specific need or to deliver a certain capability and then remained in operation to provide support once the need was met or the capability delivered.

Froh describes a situation in which the right hand does not always know what the left is doing, with the agencies disconnected from the NATO headquarters and neither group being very knowledgeable of the other. But even though some officials saw the need for change 10 years ago, the political will had not yet solidified. “There were a few things done, but not very much. It was frustrating to those who saw that there could be more, but we just couldn’t get enough wind in the sails to start making the change,” he explains, adding that the reorganization will provide better visibility and foster greater cooperation within the alliance. NATO headquarters and the three agencies also will share many functions—such as finance, communications and human resources, among others.

As NATO took on more missions, including the war in Afghanistan, the counterpiracy mission and now operations in Libya, and as the financial crisis hit and allied nations were forced to cut spending, alliance nations found the necessary willpower to implement reforms. “Good news, bad news: The bad news was that in September 2008, we had the financial crisis, and by 2009 it was really hitting the governments. The governments were realizing they had to tighten their belts and look at how they do business,” Froh recalls. With that in mind, the nations began looking for greater efficiencies from their investments in NATO. “It was really the financial crisis that focused minds.”


NATO’s reform efforts are expected to enable the organization to deliver better capability to the warfighters. Here, an MV-22 Osprey tiltrotor aircraft departs Forward Operating Base Walton in Kandahar, Afghanistan.

The member nations provide funding for NATO staff, operations and programs. Each year, they have a “wish list” of capabilities, and then someone, usually from the finance department, draws a line. Items below the line do not get funded, Froh explains. “For the warfighter, we will increase the effectiveness and efficiency and savings for the nations. We’ll allow the nations more money to purchase more capability or for other things that may have fallen below the line,” he says. “So, hopefully, we’ll provide faster delivery of capability at a lower price. And the ultimate aim is for even better capabilities.”

Froh indicates that the changes could help address the criticisms from former U.S. Defense Secretary Robert Gates. Before he left office, Gates delivered a widely publicized speech in June warning the NATO allies that they need to pull their own weight rather than expect the United States to provide all of the resources necessary for NATO operations. “The problem is that there actually is quite a bit of money being spent on defense; the issue is just how that money is being spent and what the nations get out of it,” Froh contends.

To provide better bang for the buck, the reorganized NATO will continue to seek solutions for a “smart defense.” One way to do that is through greater multinational cooperation. “The idea is to offer the nations the opportunity to come together where they harmonize their needs, harmonize their funding schedules,” Froh offers. “That’s always a problem. People have needs, but they don’t have money right now, so they need to come together to save development costs, to get better terms with industry.”

The benefits of the multinational approach sometimes can go beyond the initial savings. “One of the real advantages to doing things multinationally is that you have the same equipment, so your interoperability is much, much better from the start,” Froh says. “The challenge is that when nations use that equipment and modify it and upgrade it, you don’t start losing that interoperability that you have when it comes off the manufacturer’s product line.”

This month, NATO is expected to appoint general managers for the new agencies who will work out the details of each agency’s structure. In the coming months, the three agencies will begin taking over responsibilities of the previous 14 agencies. NATO also intends to create a science and technology organization that will include a chief scientist, Program Office for Collaborative Science and Technology, and NATO Undersea Research Center.

In addition to streamlining the agencies, the reformation plan includes a more efficient, compact and deployable command structure, achievable in part by cutting the number of posts from 13,000 to 8,800. The new structure will include two strategic commands—operations and transformation. It also will create two joint force headquarters, each of which will be capable of a major joint operation. Additionally, the new structure will include three static commands—for air, land and maritime—two combined air operations centers, and a communications and information systems group.

Froh acknowledges that some within the agency and the member nations are resistant to the changes being made, but he says reform is essential. “NATO is like a living organism. It has to grow, contract and change, to adapt itself to the circumstances it finds itself in. That is exactly where we are. We’re in the middle of one of those processes, and it will continue.”

NATO Reform Information:


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