Following a rash of scandalous military purchases, the Czech government plans to eliminate the use of intermediaries to broker defense purchases, and instead set up a new procurement office charged with preparing most orders for the Defense Ministry.
The new Czech National Armament Office (NUV), to be established in 2012, will handle all orders pertaining to the armed forces, with the exception of spare parts and fuel, which will remain in the hands of the military.
The change follows charges of bribery and a series of contentious acquisition programs involving the Nemo 120mm mortar turret system for the land forces’ Pandur II armored vehicles, new 6×6 and 8×8 Tatra multipurpose trucks, and a higher-than-cost procurement of C-295M transport aircraft. In addition to the questionable purchases, charges of bribery have been leveled at former Defense Minister Martin Bartak involving the resolution of a commercial dispute.
All of these issues prompted the center-right coalition government of Prime Minister Petr Necas to alter the existing legislative framework mandating the MoD to use licensed go-betweens to broker defense purchases. The use of these intermediaries has resulted in the loss of millions of Czech korunas due to unnecessary fees and higher-than-normal acquisition costs.
The legislation – Law 38/94 – was passed in 1994 and forces the MoD to go through local middleman companies rather than directly to a foreign supplier. Intermediaries such as Omnipol (C-295M purchase) and MPI Group (KMW Dingo II procurement) are alternately seen as either not bringing any value to the contract or getting too close to figures in high positions of government or political parties.
The new National Armament Office will eliminate the problem of go-betweens by taking charge of the entire purchase. Once the military defines its equipment needs, the NUV will draft a marketing analysis and go directly to suppliers for Requests for Information. Should the Defense Ministry and government approve a purchase, then the NUV will proceed with the contractual obligations.