Form Regulations on Industrial Co-operation Related to Defence Acquisition from Abroad

Form 5007 Regulations on Industrial Co-operation Related to Defence Acquisition from Abroad

2 Part 1 General Principles...4 1.1 LEGAL BASIS...4 1.2 OBJECTIVE...4 1.3 SCOPE AND APPLICABILITY...4 1.4 RESPONSIBLE AUTHORITY...4 1.5 LEGAL STATUS...4 1.6 EXEMPTIONS...4 Part 2 Key Aspects Related to Implementation...4 2.1 SCOPE OF APPLICATION...4 2.1.1 Acquisitions Subject to the Provisions of these Regulations...4 2.1.2 Threshold Value...5 2.1.3 Conditional Framework Agreements for Industrial Co-operation...5 2.1.4 Conditional Industrial Co-operation Agreements, Additional Acquisitions...5 2.1.5 Acquisitions from Norwegian Principal Suppliers...6 2.2 PROCEDURAL REQUIREMENTS FOR ENTERING INTO INDUSTRIAL CO-OPERATION AGREEMENTS...6 2.2.1 Requirements for the Supplier s Offer...6 2.2.2 Plan for Industrial Co-operation...6 2.2.3 Industrial Co-operation as an Evaluation Criterion...6 2.2.4 The Negotiation Procedure...6 2.3 GENERAL REQUIREMENTS CONCERNING INDUSTRIAL CO-OPERATION AGREEMENTS...6 2.3.1 Use of Standard Agreements...6 2.3.2 Language Requirements...7 2.3.3 Governing Law...7 2.3.4 Public Disclosure...7 2.3.5 Implementation Costs Carried by the Supplier...7 Part 3 Requirement for Industrial Co-operation...7 3.1 THE INDUSTRIAL CO-OPERATION COMMITMENT...7 3.1.1 Scope...7 3.1.2 Category Allocation...7 3.2 PERFORMANCE OF THE COMMITMENT...7 3.3 LIFE-CYCLE CLAUSE...7 3.4 INDUSTRIAL PROJECTS...8 3.4.1 Approval...8 3.4.2 Requirement of Technological Content, Areas of Priority...8 3.4.3 Categories...8 3.4.4 Norwegian Partners in Industrial Projects...9 3.4.5 Direct Industrial Co-operation...9 3.4.6 Project Types...9 3.4.7 Requirement of Causality...10 3.5 VALUATION...10 3.5.1 General Criteria...10 3.5.2 Requirement for Value Added in Norway...11 3.5.3 Use of Multipliers...11 3.6 EARLY INDUSTRIAL CO-OPERATION...11 3.7 CREDITING...11 3.7.1 Time of Crediting...11 3.7.2 Up-front Credit...12 3.7.3 Approval of Credit in Category II and III...12 3.8 AGREEMENT PERIOD, MILESTONES...12 3.9 PENALTY CLAUSES...12 Part 4 Transfer of Credit...12 4.1 BANKING AGREEMENT...12

3 4.2 EXCESS CREDIT...13 4.3 TRANSFER OF CREDIT IN BANKING AGREEMENTS...13 4.4 SWAPPING ARRANGEMENTS...13 Part 5 Reporting and Follow up...13 5.1 ANNUAL REPORTING FROM THE SUPPLIER...13 5.2 ACCESS TO INFORMATION...13 5.3 REQUIREMENT OF OBJECTIVITY...13 5.4 OBLIGATIONS OF NORWEGIAN PARTNERS...13 Part 6 Breach of Contract...14 6.1 SUPPLIER S BREACH OF CONTRACT...14

4 PART 1 GENERAL PRINCIPLES 1.1 Legal Basis The Regulations on Industrial Co-operation Related to Defence Acquisition from Abroad (RIC) are pursuant to the Norwegian Acquisition Regulations for the Defence Sector 1 (ARF), section 1.10, and are an attachment to the ARF. 1.2 Objective Industrial Co-operation related to defence acquisition shall contribute to the development of a competitive industry in Norway within areas of importance to the further development of the Norwegian Armed Forces, provided that this is considered to meet the Norwegian Armed Forces demands. Industrial Co-operation is an important tool in the implementation of the strategy of industrial policy related to the Norwegian Armed Forces acquisitions. 1.3 Scope and Applicability RIC is established by the Royal Norwegian Ministry of Defence (MoD) and applies to MoD and all its subordinate entities when entering into agreements on industrial co-operation. 1.4 Responsible Authority MoD has the overall responsibility for the establishment and supervision of Industrial Cooperation related to acquisitions from abroad. MoD may delegate its authority in accordance with the provisions of these Regulations to subordinate entities. MoD may establish reference groups comprising representatives from the Norwegian Armed Forces, the industry and other relevant stakeholders, either to discuss general aspects of industrial co-operation, or particular aspects related to specific acquisitions. 1.5 Legal Status RIC has legal status as internal instructions. RIC does not itself confer any legal rights on current or potential suppliers. If any of the provisions of RIC are to be included in a contract or an order as part of its terms, this must explicitly follow from the Industrial Co-operation Agreement and the contract. 1.6 Exemptions MoD may adopt exemptions from the provisions set forth in these Regulations. PART 2 KEY ASPECTS RELATED TO IMPLEMENTATION 2.1 Scope of Application 2.1.1 Acquisitions Subject to the Provisions of these Regulations RIC applies to acquisitions of goods, services and materiel from foreign suppliers, subject to the exceptions set forth in the following paragraphs. RIC further applies to transactions where the supplier is registered in Norway, whereas significant parts of the delivery are produced abroad. 1 In these regulations, «Defence Sector» denotes MoD and its subordinate entities.

5 RIC also applies when the acquisition is conducted in accordance with Lov om offentlige anskaffelser (The Public Procurement Act) of 16 July1999 nr. 69 (LOA), and Forskrift om offentlige anskaffelser (Regulation on Public Procurement) (FOA), provided that the acquisition may benefit from the exemption in LOA 3. RIC also applies to acquisitions conducted in accordance with the ARF, section 1.5.1, b and c. As a rule, an exemption to RIC will be given in multinational co-operation projects where the value of the contribution from the Norwegian industry 2 is equal to the Norwegian financial investments. 2.1.2 Threshold Value Industrial Co-operation Agreements are mandatory in all foreign acquisitions that involve contract values of NOK 50 million or more, excluding VAT (hereafter the «threshold value»). A binding Industrial Co-operation Agreement must be entered into before the acquisition contract is concluded. Administrative fees incurred when acquisitions are made under international (armaments) cooperation arrangements or other nations public supply schemes etc. shall not be included in the basis for calculation. Administrative fees that are to be excluded from the basis of calculation must be fully documented by the supplier. VAT, customs and other charges imposed by Norwegian authorities are not to be included in the basis for calculation. 2.1.3 Conditional Framework Agreements for Industrial Co-operation Suppliers to the Norwegian Armed Forces, which during a five year period may be awarded multiple contracts separately not exceeding the threshold value, must sign a conditional framework Industrial Co-operation Agreement if the aggregate contract value might exceed the threshold value. The conditional framework agreement becomes effective as soon as the accumulated contract value during the revolving five year period exceeds the threshold value. Whenever a framework agreement becomes effective, all subsequent contracts concerning the same supplier are subject to the framework agreement, regardless of the contract value. 2.1.4 Conditional Industrial Co-operation Agreements, Additional Acquisitions When contracts are entered into with foreign suppliers, of which the aggregate contract value, if option(s) are exercised, will exceed the threshold value, a conditional Industrial Co-operation Agreement must be entered into. The same applies when it is likely that potential future additional acquisitions of the same or similar type of materiel from the same supplier within a subsequent five year period will exceed the threshold value. Such a conditional Industrial Cooperation Agreement becomes effective when the aggregate contract value exceeds the threshold value. If an Industrial Co-operation Agreement is already entered into with a supplier, and an additional acquisition consists of the same or similar type of materiel (from the same supplier), the previously entered into Industrial Co-operation Agreement shall be increased with a value equal to the additional acquisition. 2 In these regulations, «Norwegian industry» means businesses with development and/or production activities in Norway and registered in the Brønnøysund Register Centre. «Foreign supplier» denotes a supplier which is not registered in the Brønnøysund Register Centre.

6 2.1.5 Acquisitions from Norwegian Principal Suppliers For acquisitions where the main supplier is located in Norway, but where significant parts of the delivery is produced abroad, and such an individual part on its own exceeds the threshold value, an Industrial Co-operation Agreement with the foreign subcontractor is normally required. 2.2 Procedural Requirements for Entering into Industrial Co-operation Agreements 2.2.1 Requirements for the Supplier s Offer In its offer, the supplier is not permitted to require an exemption from an Industrial Co-operation Agreement, submit an alternative offer without an Industrial Co-operation Agreement, or make reservations from parts of the provisions of these Regulations or from articles in the relevant standard agreements. Such offers will be rejected. 2.2.2 Plan for Industrial Co-operation In relation to acquisitions of which the contract value is NOK 500 million or more, MoD will, in co-operation with the Norwegian Armed Forces, the industry and other affected parties, develop a plan for industrial co-operation. Such a plan should be developed at an early stage, and may be included in the invitation to tender. In relation to acquisitions of which the contract value is less than NOK 500 million, an industrial co-operation plan could be developed if the acquisition is of such nature that it seems likely that the Norwegian industry will be able to provide substantial parts of the delivery in co-operation with foreign suppliers. In addition, it should be possible to establish a strategic co-operation between the Norwegian industry and the foreign supplier, so that the acquisition provides an important contribution to maintenance or development of the competences of the Norwegian industry in areas of importance to the Norwegian Armed Forces. In relation to other acquisitions, MoD may decide to develop a plan for industrial co-operation. 2.2.3 Industrial Co-operation as an Evaluation Criterion Although cost and performance, as well as time of delivery, are the essential criteria in the evaluation of offers, MoD will put considerable emphasis on the supplier s proposed industrial co-operation plan in the overall evaluation. See also Section 2.2.1. MoD s evaluation will also include an assessment of a potential supplier's past performance under both completed and ongoing Industrial Co-operation Agreements. This assessment also includes other entities or departments within the same corporation/industrial group, even when these are located in other countries than the potential supplier. 2.2.4 The Negotiation Procedure The acquisition authority is not permitted to sign a contract with a supplier until an Industrial Co-operation Agreement between MoD and the supplier has been finally negotiated. 2.3 General Requirements Concerning Industrial Co-operation Agreements 2.3.1 Use of Standard Agreements Standard agreements prepared by MoD in accordance with the provisions set forth in these Regulations are the basis for the negotiations with the supplier. Exemptions from the provisions or the standard agreements are only granted in accordance with Section 1.6.

7 2.3.2 Language Requirements Industrial Co-operation Agreements shall be in the English language (United Kingdom). 2.3.3 Governing Law Industrial Co-operation Agreements are governed by Norwegian law. Norwegian courts of general justice or courts of arbitration established according to the Norwegian Arbitration Act have exclusive jurisdiction to hear any legal disputes arising from the Industrial Co-operation Agreements. 2.3.4 Public Disclosure As a rule, the Industrial Co-operation Agreements are exempted form public disclosure in accordance with Offentlighetslovens (the Public Information Act) section 5.1, cf. Forvaltningslovens (the Public Administration Act) section 13.2. However, the value of the agreement, the remaining obligations, and supplier s name are normally regarded as information subject to public disclosure. 2.3.5 Implementation Costs Carried by the Supplier The supplier must carry all its own costs related to the practical management and implementation of the agreements, such as, but not limited to, administration and travel expenses. Such expenses are not to be deducted from the suppliers commitments under the agreement. PART 3 REQUIREMENT FOR INDUSTRIAL CO-OPERATION 3.1 The Industrial Co-operation Commitment 3.1.1 Scope The supplier must undertake to carry out industrial co-operation equal to a minimum of 100 % of the value of the basis of calculation, as described in Section 2.1.2 (hereafter «the Commitment»). For all acquisitions, a substantial part of the Commitment must be covered by binding contracts with the Norwegian industry prior to the Norwegian Armed Forces entering into an agreement with the supplier. 3.1.2 Category Allocation At least 50 % of the Commitment must be fulfilled within Category I, and a maximum of 25 % of the Commitment may be fulfilled by use of Category III, as defined in Section 3.4.3. 3.2 Performance of the Commitment The responsibility for performance of the Commitment rests with the supplier. The supplier may involve his parent company, associated companies, subsidiaries or subcontractors, provided that these are located outside Norway. 3.3 Life-Cycle Clause In relation to acquisitions where upgrades, updates and maintenance of the equipment are expected, the supplier must commit to implement industrial co-operation in relation to all potential future contracts related to the equipment when entering into the main contract. This is done by establishing a long term Industrial Co-operation Agreement when entering into the main contract.

8 3.4 Industrial Projects 3.4.1 Approval All industrial projects are subject to MoD approval before execution. Category, type of project, estimated values and multipliers are established at the time of approval. MoD determines standard procedures for such approvals. 3.4.2 Requirement of Technological Content, Areas of Priority The projects should employ an equal or higher technological level than the products procured by the Norwegian Armed Forces. Acquisition of Norwegian raw materials or low-tech products will not be approved. Based on the demands of the Norwegian Armed Forces, and in consultation with the Norwegian industry, MoD has identified eight areas of technological competence that shall give guidance to the industrial co-operation. These are: 1. Information and communication technology 2. System integration and architecture 3. Missile technology and autonomous weapon and sensor systems 4. Underwater technology and sensors 5. Simulation technology 6. Weapon and missile propulsion technology, ammunition and military explosives 7. Material technology 8. Maritime technology A significant part of the projects should be within the currently applicable technology competence areas. Projects that contribute to the maintenance, development or creation of system competences of importance to the Norwegian Armed Forces, are given priority. 3.4.3 Categories Industrial projects must be within one of the three following categories: Category I: Category II: Strategic projects Non-strategic, defence related projects Category III: Security related projects and dual use projects Strategic projects are those that are considered to be of strategic importance to both the Norwegian Armed Forces/the national security and the Norwegian industry. These are projects that contribute to the development and enhancement of national competence within one or more of the technology competence areas. Defence related projects are projects that comprise military materiel and services, as well as related technology, and which are mainly used by a nation s armed forces. Security related projects are projects that comprise materiel, services and related technology, which are made use of in the protection against non-military threats to the security of the society, and other vital security interests.

9 Dual use projects 3 are projects which are relevant to both the civilian and military sectors, including technology not specially constructed or modified for military use. Projects which comprise development of expertise and technology in the civilian sector, in areas that may become of great importance to the Norwegian Armed Forces in the future, may also be approved in this category. 3.4.4 Norwegian Partners in Industrial Projects The Norwegian partner in industrial projects must be from industry or research and development communities located in Norway. In cases where it is important to maintain or establish systems or maintenance competence within the Norwegian Armed Forces, entities within the Norwegian Defence Sector may be approved as a Norwegian partner. In the event that a Norwegian partner is not acting in accordance with, or previously has not acted in accordance with, the Norwegian Defence Acquisition Regulations (ARF), section 1.8.7 with attachments, and/or ARF, section 2.10, MoD may reject to approve proposed industrial projects where such a Norwegian partner is involved. 3.4.5 Direct Industrial Co-operation There is no general requirement of direct industrial co-operation, i.e. projects that include subcontracts to the acquisition in question. However in particular cases, direct industrial cooperation may be required if considered to be of great importance to the Norwegian Armed Forces. Approval of direct industrial co-operation projects proposed by the supplier is only given when the following conditions are met: The projects must not in a life-cycle perspective entail increased costs in relation to the delivery to the Norwegian Armed Forces, e.g. they must not result in the creation of unnecessary duplication of production lines. The Norwegian company must be competitive. The projects must normally constitute a significantly larger part of the production series than the Norwegian Armed Forces acquisition. 3.4.6 Project Types The following types of industrial projects may be approved: a) Technology co-operation b) Assistance related to market development and market access c) Co-operation related to research and development d) Acquisition of defence materiel, defence and security related products or dual use products from Norwegian industry. Acquisition of defence materiel developed and produced in Norway, by the authorities of the supplier s home country or other countries will normally be accepted as industrial co-operation if the acquisition contributes to market access for the Norwegian industry e) Transfer of technology and know-how to a Norwegian partner 3 These projects should not be in conflict with Article 123 of the EEA Agreement. For dual use projects and projects that comprise development of expertise and technology in the civilian sector, a separate assessment is needed.

10 f) Investments that contribute to strengthening of the competitiveness of the Norwegian industry Technology co-operation denotes projects where the Norwegian and foreign partner participate on an equal basis and contribute fairly equal towards producing the next generation of products, preferably on a system level. 3.4.7 Requirement of Causality In general, industrial projects must be based on the fact that an Industrial Co-operation Agreement has been entered into. The continuance of an existing business relationship will normally not be approved. An increase in size of the business or changes in the product portfolio may however be accepted, provided that this results in increased business activity or development of technology and/or production capacity. 3.5 Valuation 3.5.1 General Criteria When valuating industrial projects, the following elements must be assessed: a) Technology co-operation The value of the Norwegian partner s export of products resulting from the technology co-operation The value of the foreign partner s contribution to the technology co-operation The Norwegian partner s proprietary rights to technology and know-how b) Assistance related to market development and market access The value of turnover resulting from the assistance c) Co-operation related to research and development The value of contracts the foreign partner places with Norwegian partner The value of the foreign partner s partial financing of other contracts with the Norwegian partner The Norwegian partner s self financed contribution or the foreign partner s contribution outside Norway are not credited. d) Acquisition of defence and security related products or dual use products from the Norwegian industry Sales value of the product(s) in question e) Transfer of technology or know how to a Norwegian partner The value of the Norwegian partner s export of product(s), resulting from the technology transfer The value of the foreign partner s concrete and measurable contribution to the technology transfer Potential market value of the technology or know how in question The Norwegian partner s rights to technology and know how The foreign partner must establish that the Norwegian partner s export exceeds ten times the credited value. f) Investments that contribute to the strengthening of the Norwegian industry s competitiveness Amount of funds invested

11 Purchases of shares and the creation of/payments to investment funds are not credited. Projects that qualify as several project types are valuated separately under each type for the qualifying part. 3.5.2 Requirement for Value Added in Norway Only the part of value added in Norway by an industrial project is credited according to Section 3.5.1. When the project valuation is based on production, and the Norwegian share of the value added exceeds 80 %, the project will receive 100 % credit. The Norwegian part of the value added will not be credited if this constitute less that 20 % of the total project value. 3.5.3 Use of Multipliers The value of an industrial co-operation project calculated in accordance with Sections 3.5.1 and 3.5.2 may be adjusted through use of multiplication factors. The following factor scale may be applied for the various types of industrial projects: Technology co-operation 1,0 5,0 Assistance related to market development and market access 0,1 2,0 Co-operation related to research and development 1,0 5,0 Acquisition of products 1,0 Transfer of technology and know-how to a Norwegian partner 1,0 2,5 Investments 1,0 5,0 If the Norwegian partner is classified as a medium sized or small business 4 (SME), a multiplier of 1.3 or 1.5 is applied in addition to the foregoing. In cases where a Norwegian SME is subcontractor to deliveries from larger Norwegian companies, where the deliveries have been accepted as an industrial co-operation project, the additional multipliers apply to the value of the SME part of the delivery. In determining multipliers, the project content will be evaluated against the objective of these Regulations, in addition to its categorization in accordance with Section 3.4.3. 3.6 Early Industrial Co-operation Potential suppliers may apply for industrial project approval prior to signing the acquisition contract. Possible conditions may be specified in separate agreements between MoD and the potential supplier. Potential suppliers that fail to win contracts are not entitled to make any claims against Norwegian authorities for financial compensation of expenses incurred in early industrial cooperation proceedings. 3.7 Crediting 3.7.1 Time of Crediting Apart from the exemption in Section 3.7.2, all completed project activities are credited in arrears. If an approved project has been duly implemented in accordance with the documentation which formed basis for the approval of the project, and progress can be satisfactorily documented, the credit may not be rejected unless any of the parties are in breach of the contract. 4 According to EEA definition.

12 3.7.2 Up-front Credit If the turnover in a type (a) or (e) (as indicated in Section 3.5.1) project is realized only considerably into the future, a minor part of the expected project value may be subject to upfront credit. Such a part must not exceed 10 % of expected project value. Up-front credit will be deducted from the credit approved in arrears in accordance with Section 3.7.1. 3.7.3 Approval of Credit in Category II and III When accumulated credit within category II or III, either separately or combined, reaches the stipulated ceiling within the category (as stated in Section 3.1.2), no more credit will be approved in that category(ies). Excess credit will be recorded, however, in case of an increase of the commitment. Such records do not confer any rights on the supplier for the conclusion of future banking agreements as described in Section 4.2. 3.8 Agreement Period, Milestones The Industrial Co-operation Agreement must state when the commitment shall be fulfilled in its entirety. The agreement period is normally limited to ten years. If the period of delivery extends beyond ten years, the agreement period must, as a minimum, have the same duration as the delivery period. If the agreement period is from three to five years, a minimum of one milestone is mandatory. For five to eight year agreement periods, minimum two milestones are mandatory. For eight to ten year agreement periods, minimum three milestones are mandatory. For agreement periods more than ten years, minimum four milestones are mandatory. The agreement terminates when the commitment is fulfilled. 3.9 Penalty Clauses If the supplier fails to fulfil the Commitment by the end of the Fulfilment Period, including strategic content requirements, he is obliged to pay final compensation. The amount of the final compensation must be stated in the Industrial Co-operation Agreement, but shall not be less than 10 % of the outstanding value. Suppliers that fail to meet the milestones, are obliged to pay milestone compensation as stated in the agreement. This shall not be less than 10 % of the outstanding value, as according to the milestone schedule. If stated in the agreement, the milestone compensation may be postponed, provided that a bank guarantee of an equivalent amount is issued. This bank guarantee will be cancelled upon fulfilment of the milestone requirement. If at the expiration of the agreement, the supplier still has not fulfilled the requirement in question, the milestone compensation may be deducted from the bank guarantee. Payment of milestone or final compensation does not exempt the supplier from the commitment, and the agreement will remain in force until the commitment is fulfilled. PART 4 TRANSFER OF CREDIT 4.1 Banking Agreement A banking agreement is an agreement between MoD and a foreign supplier that provides for an opportunity to accumulate credit which again may be credited (applied to) future Industrial Cooperation Agreements. Banked credit must not be used to fulfil more than 40 % of the Industrial Co-operation Agreement that it is transferred to (applied to).

13 If otherwise not stated, accumulated credit is valid for a period of five years. 4.2 Excess Credit If the supplier has earned excess credit at the expiration of the agreement, it may apply to have excess credit in Category I and II transferred to a banking agreement. For particularly important strategic projects, the supplier may request MoD for continued crediting after the commitment has been fulfilled. Such credit are transferred to a banking agreement. 4.3 Transfer of Credit in Banking Agreements Suppliers that have entered into banking agreements may transfer banked credit to other departments/business units within the group or other undertakings where the supplier holds a minimum 50 % ownership interest, to fulfil other industrial co-operation agreements. In special cases, MoD may approve third party transfers. 4.4 Swapping Arrangements MoD may in special circumstances approve an application for swapping of industrial cooperation commitments, i.e. an exchange of industrial co-operation commitments between several parties. PART 5 REPORTING AND FOLLOW UP 5.1 Annual Reporting from the Supplier By 31 March each calendar year, the supplier must submit a report comprising a request for activities carried out the previous calendar to be credited. The supplier may not request credit for activities carried out more that two years before. The report must be submitted in accordance with the format prescribed by MoD. MoD will provide feedback to the supplier within 30 September the same year. 5.2 Access to Information The Supplier, other foreign partners and Norwegian partners are obliged to grant MoD access to all project documentation and other information related to individual projects, whenever MoD so requires and to the extent that MoD deems necessary. The parties are not permitted to conclude any agreements with each other, or with third parties, that restrict MoD s rights under this provision. 5.3 Requirement of Objectivity The supplier or other foreign partners must not enter into agreements with a Norwegian partner which restricts the Norwegian partner s opportunity to convey his independent and objective evaluation of a proposed project, or other necessary information, to MoD. The supplier or other partners are not allowed to enter into agreements with a Norwegian partner that obligates the Norwegian partner to seek to influence MoD or other Norwegian authorities, for instance by supporting the supplier s demands concerning valuation, categorization, use of multipliers, etc. 5.4 Obligations of Norwegian Partners Without undue delay, the Norwegian partner in industrial projects is obliged to answer all MoD requests related to annual supplier reporting or other demands for information. Upon completion

14 of the Industrial Co-operation Agreement, MoD may request that the Norwegian partner submits a report which describes the benefits and value of the project. PART 6 BREACH OF CONTRACT 6.1 Supplier s Breach of Contract Breach of commitments under an Industrial Co-operation Agreement are included in evaluation of future offers submitted by the supplier in competition for new contracts with the Norwegian Armed Forces. Failure to fulfil the obligations of an Industrial Co-operation Agreement at the expiration of the agreement will be considered as breach of commitment and lead to exclusion of the supplier from competition for future deliveries to the Norwegian Armed Forces, until the commitment has been fulfilled. In the event of breach of commitment related to a specific industrial project, MoD may reevaluate the approval of the project as well as consider revocation of already approved credit.