MoD did violate the Public Procurement Act – but the purchase of the Venom and Viper helicopters stays confirmed by the OPC

MoD did violate the Public Procurement Act – but the purchase of the Venom and Viper helicopters stays confirmed by the OPC
27 / 08 / 2020, 10:00

On Monday, 24th August, the Office for the Protection of Competition (OPC) rejected the submission of the Italian company Leonardo, in which the AW139 helicopter manufacturer demanded ban on performance of the contract concluded between the Czech Ministry of Defense and the United States Government. The subject of the contract is the supply of eight multi-purpose and four attack helicopters. The Office did not comply with Leonardo for the second time. For the first time, it rejected the November submission on formal grounds. However, the Office now states that the Ministry acted in violation of the Public Procurement Act, and threatens it with a "significant fine" - with reference to the security interests of the Republic, however, it did not prohibit the performance of the contract. The decision of the Office is not final.

Press release of the Office for the Protection of Competition:

"During the administrative proceedings, the Office found that the Ministry of Defense had acted in violation of the Public Procurement Act by concluding the contract without first settling the objections filed by Leonardo. The contracting authority received the objections on 20th November 2019, concluded the contract on the following day, not deciding on the objections until 5th December 2019. In this case, the law presupposes the imposition of ban on the performance of the contract, if a relevant proposal is submitted.

In this case, however, it was found that imposing ban on performance of the contract would jeopardize the existence of a broader defense or security program that is essential for the security interests of the state. For this reason, the Office did not impose the ban and rejected the proposal. However, the contracting authority may be subject to a significant fine in view of the seriousness of the conduct and the value of the contract."

see also: Leonardo turned to the Office for the Protection of Competition regarding the multi-purpose helicopters acquisition

The closely watched case originally involved acquisition of twelve multi-purpose helicopters to replace the obsolete Mi-35 (Mi-24) helicopters. The maintenance of these ex-Soviet machines, among other things, made the Czech Air Force dependent on the supply of spare parts from Russia. The most serious bidders for the contract were the American company Bell offering the Czech Air Force the UH-1Y Venom helicopters, the latest version of the Huey deployed since the Vietnam War, which is in use by the US Marine Corps, and the Italian company Leonardo offering the AW139M multi-purpose helicopters. The Italian solution was offered at half the price compared to the Americans, and at the same time with the promise to meet all military requirements, including the ability to provide fire support and carry the Anti-Tank Guided Missiles.

It was one of a number of requirements given by the concepts of the existing Mi-35 gunships, which are a unique combination of multi-purpose and attack helicopters, and Czech Army did not want to give up this feature of its helicopters. Former Minister of Defense Šlechtová suspended the acquisition project at the time, among other things, referring to the fact that the Army requires non-standard properties from new helicopters. In the Western armies, the roles of multi-purpose and attack helicopters are separate and a machine capable to fully replace the Mi-35 does not exist on the market. However, the Army insisted. The problem with the American solution was that the Venoms cannot fire ATGM’s  and it would be expensive „to teach them“ to do so. New solution came into play: a combination of multi-purpose and attack helicopters in the ratio of eight:four. It caused embarrassment, among other things, because the number of four attack helicopters is completely insufficient in terms of real service conditions, while reducing the capacity of the multi-purpose helicopter fleet is another disadvantage.

See also: Czech multi-purpose helicopters tender – four Vipers cannot be effective

After Prime Minister Babiš visited the USA, the final decision was taken and Czech Republic chose the debatable American solution, which doubled the Italian offer with the purchase price; and in the case of operating costs, the ratio can be expected to be even worse in the future. The argument for this decision was, on the one hand, the will to complete the acquisition in the format of a government-government (G2G) purchase, with the offer not being received from another but the US government. Another argument was, after all those years when the AW139M was seriously considered, the suddenly discovered requirement that the helicopters must have seen combat deployment before.

Apart from the double price of unquestionably high-quality H-1 system helicopters, a number of other doubts arose in the case. In addition to the non-settlement of Leonardo's objections before signing the contract with the Americans, which the Office now criticizes and talks about the fine for the Ministry of Defense, the degree of involvement of Czech industry in the contract and especially in the maintenance of the American helicopters was recently questioned.

In fact, the fine for violating the Public Procurement Act will not be any solution if it should remain with the fact that the MoD will return a large amount of money back to the state budget. I.e. from state pocket to state pocket. Such „solution“ cannot be presented as course of justice. If a fine is imposed, it will be essential to ask for personal consequences. If the argument of the Office that the  the whole project cannot be stopped not because it would present a threat to the security interests of the Czech Republic, it is all the more necessary to ask who decided on the procedure that was in conflict with the essential law, and what and whose personal responsibility will be drawn. The agreement was personally signed by Minister Metnar in December 2019. When Asked by Security magazine if he was afraid that he would end up in court because of the helicopters like the former Minister Parkanová over the CASA planes, he had replied confidently: "What can I tell you about this? No comment."

Tags of article

This website uses to provide services, personalize ads, and analyzing visitor cookies. By using this site you agree.More information