NSIP in a Nutshell

Part 2 – The Capability Package

Part One of this paper discussed the basics of the NATO Security Investment
Programme (NSIP). Part Two aims to elaborate on the Programme paper by
expanding on the working vehicle that brings together all 3 of the Resource Pillars,
The Capability Package.

A Capability Package is always built against a requirement. More specifically where

a requirement is assessed against the criteria of Doctrine, Organization, Training,
Materiel, Leadership, Personnel, Facilities and Interoperability, the so-called
DOTMLPFI criteria, it is more normal to develop a Capability Package against the
Material or Facilities aspects of a requirement. There is no need, for example, to
raise a Capability Package to address the development of or a change in doctrine.

The requirements come from the NATO Defence Planning Process that has as its
aim in Step 2 the identification of a single set of capabilities that NATO needs in
order to meet its Level of Ambition. There are however, sometimes other politically
driven requirements that can also be fulfilled by the development of a Capability
Package, for example, changes in the NATO Command Structure or the re-location
of a NATO facility.

The relatively complicated definition of a Capability Package states that it is “A

combination of national and NATO funded capital investments, O&M cost, manpower
and other associated costs, which, together with the military forces and other
essential requirements, enables a NATO Commander to achieve a specific Military
Required Capability”. Though the definition expands to other costs and essential
requirements to cover all eventualities, it essentially boils down to the 3 elements of
common funding previously discussed: NSIP, Manpower and Military budgets. The
NSIP component takes care of the capital expenditure or investment i.e it pays for
the building or procurement of an asset, the Military Budget takes care of the
operation and maintenance (O&M) or running of the asset and Manpower is needed
to operate or use the asset. On some occasions, especially where the requirement is
to update or replace an obsolete system, the number of personnel required to
operate a system can actually become a negative requirement in terms of manpower
i.e. modern systems or facilities need less people to run them. However, where there
is a requirement to build or obtain something new it would be reasonable to expect
an increased burden in the operating budget of the owner of the facility.

The individual components parts of a Capability Package that together, when fully
developed, fulfil the requirement are known as Projects. A Capability Package can
have any number of projects from one (which is normally referred to as a Stand
Alone Project or SAP) to more than a hundred depending on the complexity of the
requirement or the number of individual components that might need to be
distributed and connected across the NATO-wide area. Each project within a
Capability Package is assign to an individual Host Nation who is responsible for the
delivery of that component. A Host Nation can be any of the territorial Nations of the
Alliance, either of the Strategic Commanders or one of the NATO Agencies. It is not
uncommon, particularly in the Computer Information System (CIS) area, for one Host
Nation to be responsible for the delivery of a whole Capability Package.

As previously stated the process of developing a Capability Package starts with a

requirement and the list of those requirements comes from the NDPP in the form of
Minimum Capability Requirements or MCR. Each MCR is assessed across the
DOTMLPFI criteria by the Capability Board (CB). The CB is a 3* level board co-
chaired by Deputy Chief of Staff Capability Development (DCOS CD) in Allied
Command Transformation (ACT) and Deputy Chief of Staff Plans Directorate (DCOS
Plans) in Allied Command Operations (ACO). It is therefore referred to as a Bi-SC
Board. The CB has responsibility, amongst other things, to provide guidance and
direction on the development and delivery of required capabilities, including timelines
and priorities1. Where the CB assesses that a requirement could be fulfilled by a
Capability Package they would task the Bi-SC Capability Package Board (CPB) to
investigate and where appropriate develop the necessary Capability Package.

The Capability Package Board is also a Bi-SC board co-chaired by Deputy Chief of
Staff Resource and Management (DCOS RM) at ACT and Deputy Chief of Staff
Plans (DCOS Plans) at ACO. The CPB has the responsibility, amongst other things,
to verify that validated requirements presented to the CPB can be delivered through
the NATO common funding processes and to direct the most suitable solution to
resource a capability requirement by establishing new Capability Packages or
changes to existing ones2. They also have the remit to endorse Capability Packages
at each of their development milestones prior to the submission of a Capability
Package to NATO HQ for screening, endorsement and approval. The CPB is
therefore the controlling authority for Capability Package development and
submission.

Following the initial investigative staff work to establish the need for either a new
Capability Package or an addendum to an existing one, the first formal part of the
process is called Initiation where the need to develop a Capability Package is
formally accepted by the Capability Package Board. This process establishes the 3
key players in the processing of a Capability Package: the Mission Sponsor (MISPO)
who is the “Champion of the Cause”, responsible for the delivery and management
1
SH/PLANS/JCAP/FCP/GS/13-302697 5000FPM 0120/TT-9293/Ser: NU0036 Promulgation of Terms of
reference for the B-SC Capability Board Dated 30 July 2013. Para 2.c.(1)(c)1/
2
SH/PLANS/JCAP/FCP/GS/13-303006 5000 MFX-1060/TT-9362/Ser: NU0518 Promulgation of Terms of
reference for the Bi-SC Capability Package Board dated 14 August 2013. Para 3.b.(1) & (2).
of the Requirement Definition (RD) and for the setting of the criteria to assess the
Initial Operating Capability (IOC) and the Full Operating Capability (FOC) of the
capability, including the required delivery dates; the Capability Package Coordinator
(CAPCO) who acts as the single point of contact for Capability Package
development, establishes and leads the Capability Package development team and
is responsible for the development of a Consolidate Resource Proposal (CRD)
identifying, over time, the investment, the operating cost and manpower
requirements needed to fulfil the requirement; and the Operational Coordinator
(OCO) who has the responsibility, as the customer and end-user’s representative, to
ensure that what is delivered is suitable for purpose and fulfils the requirement from
a military perspective. This team needs to work closely together to identify any
potential problems associated with the fulfilment of the original requirement. Initiation
is also the point in time where the basic details of a Capability Package or addendum
are added to the Capability Package Management Information System (CPMIS), a
database controlled by the NSIP Branch in ACT to track Capability Packages from
initiation of the idea through to disposal of the asset at the end of its useful life, the
so-called “cradle to grave” aspect of the CAPCOs responsibility.

The next stage of Capability Package development is defining the requirement

where the Mission Sponsor (MISPO), in coordination with the Capability Package
Coordinator (CAPCO) and the Operational Coordinator (OCO), needs to make the
operational justification for the Capability Package i.e what is required from the
military point of view to fulfil this requirement. The Requirement Definition or RD,
defines the scope of the requirement in terms of required attributes (as opposed to
actual assets), the timelines that those attributes need to be in place in the form of
Initial and Full Operating Capability (IOC/FOC) dates, the types of forces to be
supported and any initial assessments of the essential components of the
requirement including any necessary envisaged logistical support. The Requirement
Definition is broken down into 4 sections: The Commander’s Mission Area, Military
Function, Operational Assessment and the Required Capability. Once refined, the
Requirement Definition is presented to the Capability Package Board for
endorsement. This milestone, recorded in the minutes of the Capability Package
Board and entered into the Capability Package Management Information Systems
(CPMIS) ensures that the Capability Package is fulfilling the requirement of the
Minimum Capability Requirement (MCR) defined in the NATO Defence Planning
Process (NDPP) in both scope and time. A nominal period of time of 3 months is
allocated to the development of a Requirement Definition from the initiation date.

Once the Requirement Definition has been endorsed, the process of developing a
Consolidated Resource Proposal or CRD is started. This process is led by the
Capability Package Coordinator (CAPCO) in conjunction with the Mission Sponsor
(MISPO), the Operational Coordinator (OCO) and his nominated team of Subject
Matter Experts (SMEs) drawn from across the Strategic Commands. Essentially, the
Consolidate Resource Proposal (CRD) assesses the assets required, by type and
quantity, needed to achieve the required capability, compares it to the assets
available throughout NATO, including both National and NATO assets under
development or planned, analyses the differences between assets required and
assets available and proposes ways to resolve any shortfalls needed to achieve the
capability. The outcome of this process identifies any shortfalls in capabilities
available to NATO to fulfil the requirement across all three resource pillars: NSIP,
O&M and Manpower. It is also possible that this process may identify capabilities
that are surpluses to requirement and that should be disposed of by NATO. The
Consolidate Resource Proposal is presented to the Capability Package Board for
endorsement. This milestone, recorded in the minutes of the Capability Package
Board and entered in the Capability Package Management Information System
(CPMIS) ensures that the capability shortfall, identified in the NATO Defence
Planning Process (NDPP) and refined during the Requirement Definition (RD) phase
will be fulfilled in the most efficient and most cost effective way for the Alliance. A
nominal period of time of 6 months is allocated to the development of a Consolidate
Resource Proposal from the date of the Requirement Definition endorsement.

With the addition of the Commander’s Operational Impact Statement on what the
impact would be of not approving the Capability Package and a summary of some
non–military factors that could affect the implementation of the capability, the
Capability Package is now ready for submission to NATO HQ for screening,
endorsement and final approval. This is actioned through the Tasker Tracker system
with either a Joint Chiefs of Staff cover letter or a single sign out letter from HQ ACT
including a note that the Capability Package has been coordinated and endorsed by
both Strategic Commands.

Following the submission to NATO HQ the Capability Package is simultaneously

screened by International Military Staff (IMS) on behalf of the Military Committee
(MC) to ensure that the Capability Package conforms to the military requirement and
is allocated the appropriate priority and by the International Staff (IS) on behalf of the
Resource Policy and Planning Board (RPPB) to confirm that the Capability Package
is both eligible for common funding and affordable within the current and projected
NATO Security investment Programme (NSIP) ceilings. This process is referred to
as the screening process and culminates in a Joint Staff Screening Report (JSSR)
which is formally presented to the Military Committee and the Resource Policy and
Planning Board for endorsement. Only when both of these committees, which have
representatives all 28 Alliance Nations, have endorsed the Capability Package is it
presented to the North Atlantic Council (NAC) who are the only authority for approval
of a Capability Package.

Throughout the processes described so far, development, submission, screening,

endorsements and approval, the Capability Package is dealt with as a single entity
i.e it is a complete package.
The approval of a Capability Package by the North Atlantic Council is the key event
that signifies not only a commitment by the 28 Allied Nations to develop a capability
though NATO common funding but also that the identified Capability Package, as a
whole, represents the most efficient and cost effective solution to fill a recognised
gap in the military capabilities needed to fulfil the Alliance’s Level of Ambition.

Once the North Atlantic Council has approved a Capability Package, the
International Staff of the NATO Office of Resources (IS-NOR), in conjunction with the
individual project Host Nation(s) develops a Capability Package Implementation Plan
or PIP. The PIP outlines the project schedule for the CP. It gives an overview of any
critical implementation issues and may contain a list of projects to be implemented
with national funds. Where projects are to be implemented through common funding
it will contain a list of projects designating the infrastructure expenditure profile and
the planned implementation timelines together with any Operation and Maintenance
(O&M) and manpower implications.

The PIP is presented to the Investment Committee to programme the expected fund
requests. The Host Nation(s) confirm that they are capable of implementing against
the required timescale and the Strategic Commands confirm that the project scope
represents the Minimum Military Requirement i.e the most austere facility required to
fulfil a NATO military need. The Host Nation(s) are then responsible for requesting
Advanced Planning Funds, where necessary, to develop a Type B Cost Estimate
detailing the engineering estimates in sufficient detail for the International Staff of the
NATO Office of Resources (IS-NOR) to support the Investment Committee’s
authorisation of funds to proceed with project implementation. The Host Nation is
responsible for informing the Investment Committee of any delays in the project
implementation schedule or in any changes of scope necessary as a result of the
development work. Any significant changes to the Capability Package
Implementation Plan (PIP) will be agreed by the Investment Committee after
consideration of any impact statements reported by the Strategic Commands.

On completion of the implementation schedule the Host Nation would request a Joint
Final Acceptance Inspection (JFAI) which is carried out by a team led by the
International Staff NATO Office of Resources (IS-NOR). The inspection validates
that the project output conforms to the authorised scope, is in accordance with good
engineering practices and with any agreed NATO Criteria and Standards and is
acceptable from a NATO military point of view. After any deficiencies are corrected
the formal acceptance report is agreed by the IC and the product is accepted into the
NATO inventory.

The capability remains in NATO use until such time as it is either obsolete or a future
requirement cycle of the NATO Defence Planning Process (NDPP) deems it surplus
to requirements and a formal deletion process is initiated.