Efficiency improvements in the norwegian defence sector 2017–2018

The Norwegian defence sector is required to increase cost efficiency by NOK 1.8 billion by the end of 2020. All agencies are supposed to work continuously in order to increase efficiency and improve processes. The research project KOSTER is given the task to evaluate the agencies performance. The purpose of this report is to give a status update after the second year of the period. In this report we study three different topics: 1. Are the efficiency gains only reported or are they realized? 2. Will the defence sector achieve the required efficiency gains by 2020? 3. What measures do the agencies need to take to improve the ability to increase cost efficiency? Our findings are that the reported efficiency gains are actually realized for the Norwegian Defence Material Agency and the Norwegian Defence Estate Agency. The Norwegian Armed Forces have challenges when it comes to reporting the gains. This is connected to a missing system of following up and monitoring the work to increase cost efficiency. A lack of defined roles and responsibilities and missing communication are a part of the problem. The Norwegian Defence Material Agency and the Norwegian Defence Estate Agency will achie- ve the required efficiency gains by 2020. The Norwegian Armed Forces will only realize about 80 percent of their goal, approximately NOK 1.1 billion. To increase their ability to realize efficiency gains the Norwegian Armed Forces should establish 1) a centralized program with distinct roles and responsibilities, 2) clear incentives and fully funded orders for implementation, and 3) enough and adequate resources to plan, implement and follow up the efficiency initiatives. The Norwegian Defence Material Agency should specify which acqui- sition projects they define as «off the shelf» and which they define as development projects. The Norwegian Defence Estate Agency should make sure that the initiatives they have started will have the calculated effect.