According to the SAO, armaments purchases for the Army are not efficient. The acquisition of armaments is taking longer than expected and is costly.
Press Release on audit No 20/03 – 11 January 2021
The Supreme Audit Office examined the funds spent by the Ministry of Defence (MoD) on the acquisition of armaments for the Army of the Czech Republic between 2017 and 2020. The concluded contracts for the acquisition of armaments and related spare parts amounted to more than CZK 3.1 billion in total. The audit revealed that the purchasing system is not efficient. For example, the Ministry erred in the specification of the armaments purchased, it did not secure spare parts for the entire life-cycle of the armaments and instead of concluding a framework contract, it purchased the armaments in stages. As a result, the MoD had to launch new procurement procedures or repeat them due to errors. This makes purchases more expensive, the administrative burden is further increased and there are delays in the acquisition of armaments for the Army, i.e., the deadlines in MoD’s concept papers, approved by the Government, are not being fulfilled.
By 2020, the MoD planned to purchase assault rifles with grenade launchers, sniper rifles, a man-portable anti-tank missile system, and a replacement for an infantry anti-tank weapon for the Army. In the end, however, only assault rifles with grenade launchers were acquired along with a modular weapon system instead of sniper rifles. Other purchases have been rescheduled to subsequent years. The MoD is thus not building the combat capabilities of the Army within the required timeframe.
The system of MoD’s armaments purchases is not working the way it should. Purchases are taking too long, which in turn increases costs as well as the administrative burden for the Ministry. For example, the MoD erred in specifying which armaments or spare parts it intended to purchase. Therefore, it had to repeat the procurement procedure. For example, when it was purchasing the modular weapon system, the MoD incorrectly specified one of the cartridges. In the case of the purchase of spare parts for a 5.56 mm rifle SIG 516, the MoD had to cancel an already concluded contract with the supplier and recommence the procurement procedure.
The MoD repeated the procurement procedure four times for the purchase of machine guns. The Ministry has been purchasing the MINIMI machine guns in stages since 2013 instead of concluding a framework contract with the supplier in order to reduce the administrative burden.
To complement these machine guns, the MoD bought inappropriate gun sights for daytime use, although during the procurement procedure, one of the parties of the procedure repeatedly pointed out this error, as well as the Office for Defence Standardisation, Cataloguing and State Quality Verification. In addition, the aforementioned Office recommended the MoD to carry out an accelerated military test of the machine guns with gun sights before concluding the purchase. However, the Ministry did not implement these tests even though it had initially planned to do so. As a result, the MoD spent almost CZK 3.4 million on unsuitable accessories.
The SAO had pointed out in 2016 that the MoD should verify the parameters of armaments it intended to purchase before signing the contract. However, the correction was not sufficient on the part of the MoD and it had only started to prepare amendments to the internal rules during the 2020 audit.
In two of the four armaments purchases audited, the MoD did not secure spare parts for the entire life-cycle of the armaments, instead it purchased only a small amount of spare parts. This makes the MoD’s position more difficult when negotiating with the supplier and it may consequently make the purchase of spare parts more expensive. The MoD will have to accept the terms and conditions of the supplier who owns the license for the spare parts. The same issue was raised by the SAO last year when it was auditing the purchases of armoured vehicles. Even for these purchases, the MoD did not take into account life-cycle costs.
According to the auditors, the MoD violated the Public Procurement Act in several cases when purchasing armaments. For example, when it cancelled the procurement procedure in a manner contrary to the law. Or, by entering into a contract with a supplier which did not comply with the procurement specifications, thereby also infringing the principle of transparency.
Communication Department
Supreme Audit Office