IFV acquisition project - Transparency International sends an open letter to the MoD

IFV acquisition project - Transparency International sends an open letter to the MoD
22 / 05 / 2019, 08:45

Transparency International (TI) has sent an open letter to Minister of Defence Lubomír Metnar on the matter of the largest Czech military tender - the purchase of tracked IFVs. In its letter the organization points out the previously unanswered questions in this contract.

The largest military contract for the purchase of new tracked IFVs is currently attracting attention not only by interested professionals, the media and the general public, but also by the Transparency International (an international non-governmental organization founded in 1993. Its purpose is to take action to combat global corruption with civil societal anti-corruption measures and to prevent criminal activities arising from corruption). The military tender worth of CZK 53 billion (USD 2.6 billion) has already risen several questions on controversial or unresolved points, such as the manned turret requirement.

See also: Czech IFV tender - opposition against manned turrets requirement

Trancparency InternationaI has divided its letter into several parts that relate to the individual aspects of the tender. The full text of the letter reads:


On Thursday, 2nd May 2019, the deadline for submitting bids for the contract for the supply of tracked Infantry Fighting Vehicles for the Czech Army was reached. Now we know who will participate in the selection process. However, there is a growing public concern over the setting and success of the entire public contract, the largest in the history of the Czech military.

The professional public is discussing the technical parameters and successes or failures of existing solutions (the most resonating is whether or not to have the manned turret), but the problems are still visible in the current steps of selecting the supplier.

See also: Czech Infantry Fighting Vehicle Tender – manned or unmanned turrets?

Although tender documentation has already been made available to potential bidders, it has still not been possible to provide a legal support supplier to assist in the organization of the contract in question throughout the course of the contract and, for example, the draft contract, which should be included in the tender dossier.

Manufacturers were also approached, and it is unclear whether they are able to meet the requirements of the Czech Army. Thus, in the current situation, it is not clear whether some of the bidders are being approached only to rise their total number and whether the contract is "tailor-made" to a particular supplier. Another question is the intended role of the VOP CZ, s.p., which is to be the main partner for the selected supplier in the Czech Republic.

Because of the confusion described above, it is not clear whether it is possible to maintain an optimum schedule for the execution of the order. However, there are even greater risks that may in some cases turn into significant losses for public budgets.

See also: Czech IFV tender - new requirements and controversies

Neither the professional nor the public has enough information on the matter of the tender. Transparency International has been pursuing the issue of efficient public budget management in public procurement in a long term, and is also focusing more on several public procurement sectors, including defence and security.

Therefore, we send an open letter to the Minister of Defence, Lubomír Metnar, with specific questions, which we consider to be essential. There is a legitimate interest in purposeful and efficient use of up to 52 billion crowns from tax payers money, and the responsibility of the contracting authority is to treat all possible risks and prevent possible errors in such a strategic order.

See also: Czech Army’s Modernization Projects: the IFVs

Specific TI’s questions about this tender:

Tender parameters / usability

  • How were the parameters for addressing potential candidates or not addressing other potential candidates?
  • What is the reason why the Ministry of Defence of the Czech Republic / Army of the Czech Republic is asking for this number (210) of tracked IFVs and is there any analysis or other background?
  • Does the Army of the Czech Republic analyze the usability of a given number of tracked IFVs? Is the tender documentation fully in line with the Armaments Strategy and the Defence Industry Development Support?
  • Can you specify how the client’s requirements meet the conception of modernization of the armament of the Army of the Czech Republic?
  • Does the Ministry of Defence of the Czech Republic estimate what impact this contract will have on the two-percent commitment of the North Atlantic Treaty Organization?

Role of VOP CZ

See also: VOP CZ - military equipment engineering, repairs, production and development

  • On the basis of what concept / what reasons should the state enterprise VOP CZ play a prominent role in the implementation of this contract?
  • Why won’t the selected supplier arrange his subcontracting in the Czech Republic directly?
  • Is there an economic analysis assessing the impact of the chosen subcontracting process?
  • What (how important) will the potential commission for the state enterprise VOP CZ be in negotiating the subcontracts? Is there an analysis of capacity of the VOP CZ to implement this contract?

Information / course of the tender

  • How exactly is the schedule for the entire order in view of the state of preparation and progress? When does the Ministry of Defence of the Czech Republic really expect to sign the contract with the winner of the tender?
  • How will the public be informed about the preparation and the course of the contract (in line with good practice of openness of the contracting authority and suppliers in the course of public procurement)?

Lawyer services

  • Why is the legal services supplier competing for the third time? Why has the selection failed?
  • How were the criteria for selecting these legal services ?

 

The questions raised by TI in the open letter to the Minister of Defence are very appropriate, given the doubts and controversies which have already risen around the tender. We will follow the developments and bring the Minister’s answer. The letter has been sent on 10th May, and the answer has not been given yet. Which only rises more questions.

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