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Fridtjof Nansen (F85) class Project 6088 New Frigate - Program

The program comprised delivery of 5 multipurpose frigates to the Royal Norwegian Navy. Each frigate is equipped with one medium size organic helicopter. The delivery schedule read one new frigate each year from 2005

An extensive use of local (Norway) manufactured equipment was envisaged in the project.

Bazan usually provided to the Spanish Navy and other foreign Navies the Logistic Support Resources for all naval units built in its shipyards.

Based on its previous experience, Bazan was in the position to offer to the Royal Norwegian Navy a tailored Logistic Support, based on Defence Standard 0060 standard, containing all initial logistic support with the aim to provide fully outfitted vessels, with appropriated trained personnel and the required maintenance resources, as well as the necessary data to manage the Logistic Support of the NF class during their life cycle.

Since the early 90's BAZAN has been applying the Integrated Construction Technology for its naval vessel construction with proven successful results in quality, productivity and delivery period. The integrated construction concept, also known as construction by zones and stages, was a real re-engineering process of the shipyard. It consists in carrying out the construction of a ship by simultaneously performing in a detail planned manner and in due time, the structural mounting, coating and pre-outfitting by zones. In this way, the final product (the ship) was generated as a set of several intermediate products (blocks, modules, finishes, tests, etc.)

One of the most interesting features of the integrated construction process, which makes it different from any previous building procedure (traditional construction and construction by blocks with pre-outfitting) was that the construction process was planned and documented from the very first stage of the project, in accordance with the building strategy. This technique implicitly carries along the implementation of Group Technology and the use of concurrent engineering. In this way, multifunctional work groups are created in all the Departments, starting from the Technical Design Office and all the way through to the Production Department itself. These multifunctional work groups perform the work in teams specialised in products (types of zones and processes).

With Integrated Construction, a spectacular productivity improvement was achieved, based on the working conditions are improved, as most of the work was carried out in the workshops instead of onboard, the total design and construction period was substantially shortened, as hundreds of tasks can be performed in parallel, quality was improved, since each task was accomplished at the appropriate moment and, finally, the total costs are reduced, as a consequence of the previous factors.

The integrated construction method allows and extensive participation of the Norwegian Industry in the construction phase.

Bazán was committed to contributing to national know-how by producing modules of vessels and assembling complete vessels at Norwegian yards; by having the development and production of the anti-submarine systems done by Norwegian defence industry; and by a number of specific offset arrangements in various sectors of Norwegian industry. The offset agreement ensures substantial orders for Norwegian industry, both directly related to the frigate project and to other projects and products. It fully satisfies the Norwegian requirements for offset arrangements.

A number of major Norwegian companies entered into agreements with Bazán and Bazán's sub-contractors. These can be described as partnerships that secure long-term co-operation and enables the companies to be strategic suppliers of sub-systems, components and equipment. For the companies concerned, the agreements opened markets that in general had very limited access for Norwegian industry. Further, Bazán was committed to allocate NOK 1000 million to small- and medium-sized firms, particularly in the "new" areas of materials, maritime technology, information and communication systems and medical technology.

Another part of the offset agreement was that Spanish authorities have confirmed that they would procure the Norwegian ground based air defence system NASAMS and the Penguin anti-ship missile from Kongsberg Defence & Aerospace. The offset agreement contains clauses specifying fines in case of Bazán's non-fulfilment, and arrangements to ensure that certain projects and obligations must be fulfilled before those with a lower agreed priority are allowed to be entered as fulfilment of offset arrangements. The assigned priorities are in accord with the existing offset guidelines. The agreement has a satisfactory balance between allocations to the defence suppliers and to general suppliers, as well as ensuring that in accordance with priorities of the Norwegian government, Norwegian shipbuilders receive substantial orders. Significant Norwegian companies involved all confirm that the agreement would provide strategically important long term contracts, and that it would strengthen their position in the international markets.

The work on the offset agreements for this project were undertaken in accordance with the overall objectives for Norwegian military offset arrangements. This implies that the Norwegian Ministry of Defence has given priority to technological aspects, the relative importance for Norwegian defence, and general political priorities for industry in accordance with the ministry's industrial strategy. In addition, maritime sub-contractors and Norwegian shipbuilders have been particularly important because of the nature of the procurement and the general state of affairs in this industry. This was in accordance with the government's conclusions after parliamentary scrutiny of White paper no. 65 (1998-99).

The Norwegian Ministry of Defence had overall responsibility for establishing and implementing offset arrangements. Advisory bodies have been HQ Defence Command Norway, the Norwegian Defence Research Establishment, Ministry of Trade and Industry, The Norwegian Industrial and Regional Developement Fund (SND), The Confederation of Norwegian Business and Industry (NHO)/Norwegian Defence Industry Group (NFL) and Federation of Norwegian Manufacturing Industries (TBL). The advisory bodies and the relevant firms have continuously provided the ministry with evaluations and suggestions.

Bazán was legally bound to offset 100% of the frigate procurement contract within 10 years. In both agreements between Bazán and the Norwegian Defence authority, on frigate procurement and offset arrangements, there was a specific penalty clause. If there was a "substantial breach" of the offset agreement, the procurement contract can be terminated. Fines apply in the case of less substantial non-fulfilment: 10% non-fulfilment results in a fine of 1% of the total procurement sum, at 20% non-fulfilment, the fine was 2%, etc. Payment of the fine does not excuse Bazán from fulfilment of the obligation concerned. This was a severe penalty clause compared to a majority of previous offset agreements.

The value of the direct offset share of the total offset arrangements (slightly less than NOK 5000 million, i.e. approx. 50% of the total) was substantially larger than convention would specify. An unusually large share of the total offset arrangements was already confirmed, because the direct offset mostly consists of agreements/contracts between Bazán and Bazán's major sub-contractors and Norwegian firms. These would be effective immediately if the frigates are procured from Bazán. It was important to note that no offset was accepted as such unless there was an invoice or other documentation from the Norwegian firm to prove that the offset project has been completed.

The potential identified surpasses Bazán's liability by more than 100%. An imbedded characteristic of offset arrangements was that many of them would be carried out, some would be changed and some would be cancelled and replaced by new ones, so that Bazán would be able to fulfil the legal offset commitment in the 10-year period. There were additional mechanisms to ensure the completion of this offset agreement. The ministry was also of the opinion that it would not be right to cement 100% of the offset arrangements by entering into specific contracts today. The future would bring new possibilities for Norwegian industry that cannot be identified today.

An important aspect of every offset agreement was the possibility for the sale of defence systems or sub-systems developed or produced in Norway (this was in accordance with the national strategy for the defence industry as approved by the Norwegian parliament). This also applies to the frigate procurement project, and Spanish authorities have confirmed that they would procure the Norwegian ground based air defence system NASAMS and the Penguin anti-ship missile from Kongsberg Defence & Aerospace. The offset value of these two products was more than NOK 1000 million.

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Page last modified: 13-11-2018 16:52:47 ZULU