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The basis of our core mission

Our core mission is to provide services for our main customer, the Swiss Armed Forces. This is where we generate around 80 percent of our total sales. We earn a little more than three quarters of this through multi-year service-level agreements (MY SLA) while a quarter is from projects, for the most part from SLA business.

The MY SLA consist of several tiered “packages”. First, there is the overarching master agreement. This agreement governs all overarching points. These include the right of inspection (of the customer), our transparency vis-à-vis the customer, terms of payment, a price increase clause and the price types. The master agreement is renegotiated every five years.

The second element consists of framework agreements for the three sectors in which we provide services: Air, Ground and C4I and ISTAR. These agreements stipulate the particularities of the individual sectors, such as hourly sales rates or specific instructions and provisions. The framework agreements are also renegotiated every five years.

And finally, the third element is the SLA for each of the approximately 130 systems, including the Leopard 2 battle tank, the F/A-18 fighter aircraft, the integrated radio and reconnaissance system, or IFASS, and the Swiss radar system for airspace surveillance, or FLORAKO . These agreements include the prices and payment credit, the service catalog with prices and quantities and the detailed service description for each individual system. These agreements are renegotiated every year. The basis for this is always the overarching framework agreements and the master agreement.

A great deal of work by specialists from the different sectors is invested in this comprehensive set of agreements: First, as the body responsible for the development, planning, resource allocation and management of the Armed Forces, the Armed Forces Staff issues the financial guidelines. Then, the Armed Forces Logistics Organization (AFLO) defines the performance requirements for RUAG based on the requirements of the users (Air Force, Army, AFCSO). As a commercial partner of RUAG, armasuisse orders the services from us on this basis. And finally, we provide the services ordered on the basis of our calculation model. Now, all this work is no longer carried out by each individual body. A so-called round table is organized at which the operational readiness, use, budgeting and service provision for the systems are compared and negotiated by the parties.