Logistics giants bid for massive German defence out-sourcing project

The German Army (the Bundeswehr) is about to embark on a new logistics outsourcing project estimated to worth €3 billion. Statements in the German press quote both the German Ministry of Defence and its technical services agency, the GEBB, as stating that the storage and transport of certain types of munitions was to be outsourced to the private sector with the aim of saving in excess of €100m.

The GEBB (Gesellschaft fur Entwicklung,Beschaffung und Betrieb) is tasked with the improvement of the management of the German Armed forces generally and the re-design and outsourcing of logistics is central to its mission. It also manages a large fleet of vehicles, including heavy construction machines for the German Ministry of Defence.

At present the Bundeswehr and the Luftwaffe already have substantial private sector involvement in logistics, with the Bundeswehr's central warehousing complex in Kassel being managed by DB/Schenker and the IT services company ESG. The Luftwaffe also uses ESG to provide data capture and warehousing systems to manage its munitions and spares operations.

A high proportion of the spares and maintenance logistics is provided by major weapons systems providers such as Krauss-Maffei Wegmann and EADS.

The new contracts appear to require a higher degree of transport services although warehousing will still be an important element.

It is believed that tenders are already in progress with the contracts to be awarded in 2008. It has been speculated that DPWN's DHL and Deutsche Bahn's Schenker are preparing bids for the massive contracts.