Common procurement contributes to 30% cost reduction
Common telecommunications equipment has been delivered to FAB CE member states following completion of the first joint equipment procurement project managed by the FAB CE legal entity, FABCE Aviation Services Ltd (FCE). Six air navigation service providers (ANSPs) purchased CISCO routers based on a common specification and tender to benefit from lower procurement costs and economies of scale.
FCE Director Matej Eljon said: “A comparison of the cost of a single procurement process compared with multiple actions reveals an average cost reduction in excess of 30%. We also achieved a lower market price because of the economies of scale.” Analysis carried out by FCE reveals cost savings in the preparation of legal documents and agreements. It also showed a significant discount in the cost of the equipment for individual ANSPs. The legal documents provide a baseline that is now available for future common procurements.
S&T Slovenia was selected for the single contract award following a competitive tender in June 2017, and the company completed delivery of the network equipment - known as X-bone – to all six ANSPs in August 2017. The replacement hardware provides the telecommunications infrastructure to support seamless exchange of aeronautical messages between ANSPs. It provides a secure network to send and receive data electronically among neighbouring states. On completion of local installation, the expert project team from X-bone community is tasked with testing and validating the new X-bone communications network with operational approval anticipated by mid-2018.
The project is the first common system purchase by a Functional Airspace Block (FAB). It was supported by an expert team which prepared the relevant legal documents and established a framework that can be used to carry out similar projects in the future. A series of templates are now available for further common procurement actions, and can be modified according to specific project requirements.
FCE is ready to launch a new procurement project in the coming months and is confident it will be able to lower costs through a single procurement process compared with costs incurred by ANSPs individually. The FAB CE Technical Sub-Committee is analysing the future investment plans of FAB CE ANSPs to identify infrastructure projects which stand to benefit from common procurement activity. The opportunities are likely to include communications, navigation, and surveillance infrastructure where equipment is already due to be purchased, and operational requirements are comparable. Smart procurement is part of wider a FAB CE objective to harmonise and optimise operations, one of three high level initiatives set out in the FAB CE Strategy, along with safety and performance monitoring, and stakeholder communications.