Czech Armed Forces develop slowly due to deficient conceptual documents, delayed purchases of technology, and limited funding

PRESS RELEASE on Audit No. 16/05 – December 5, 2016

The Supreme Audit Office (SAO) scrutinized funds used by the Armed Forces of the Czech Republic (ACR) for purchases of technology within the period from 2011 to 2015. Auditors selected and scrutinized 17 individual projects aimed at the ACR’s better operational capability. The Ministry of Defence spent around CZK 3,300 million on these projects. Auditors concluded that most of the purchased technology could have increased the ACR’s capacity to act, but deficiencies of conceptual documents, poor planning, and delayed purchases slowed down the process of attaining the required capability of the ACR. Auditors also warned that the funding for the reorganisation and transformation processes of the AČR was insufficient.

The Government finally approved a conceptual document about the ACR’s development in the end of 2011. Before that, there was no conceptual paper on the expectant capacity of the national army forces. When the SAO’s audit operation was about to be finished, the defence strategy had not been updated and there was no concept of the military equipment. The goals mentioned in White Book on Defence (issued in 2011) were not met, namely in the audited area of purchases. Extensive organisational changes at the Ministry of Defence further complicated any medium-term planning. As a result, both investment plans and their practical implementations were negatively influenced.

Auditors selected and scrutinized five individual programmes, under which military purchases were procured. All programmes were prolonged because of the problematic process of selecting contractors, there were problems with the funds’ absorption. For example, a programme that aimed at developing capabilities of modern soldiers was created in 2009, with a budget exceeding CZK 2,300 million, which would continue until the end of 2015. Out of three sub-programmes, only one was implemented, under another, which was implemented from 2013 to 2017, only 29 % of planned expenses were spent.

There were problems with purchases of military equipment as well. For example, the purchase of offensive rifles has been in making since 2009. The Ministry of Defence originally planned to purchase 20,278 new riffles as replacements for the old-outdated machine guns, with the total expenses exceeding CZK 2,700 million. During the first phase of the purchase project, only two suppliers applied and the price offer of the winner was CZK 77,000 per one riffle. According to the internal regulations of the Ministry, new riffle’s testing could only take place after the contract had been signed. However, several problems were revealed during the tests on the riffles, some tests had to be repeated and the contractor had to adjust the riffles before the first supply, which fell behind the original schedule by six months. The problems persisted, especially with the riffles’ reliability, but the Ministry did not withdraw from the contract and did not send the riffles back. Instead, the Ministry created an expert team to solve individual problems. For several years after the purchase, the riffles were successively modified in cooperation with the contractor. As a result, the Armed Forces obtained three different types of offensive riffles.

A planned reform should have contributed to better purchase processes, which would help to clearly establish responsibilities and create transparent and goal-oriented budgets. In order to simplify and streamline the purchase process, the National Armament Office was established in 2012 as an independent office, which would be entitled to powers defined by its own law. In 2014, this office was transformed into an armaments and acquisition division of the Ministry of Defence and became directly subordinate to the minister in 2015.

The slowing development of the Military Forces of the Czech Republic (CR) has been caused (among other factors) by limited funding and frequent changes to the budgetary structure. The Ministry of Defence prioritized mandatory expenditures instead of investments and modernization. Since 2005, defensive expenditures have decreased and at present, these expenditures do not even meet the national obligations towards the NATO. From 2005 to 2015, defensive expenses of the CR dropped from the required 2 % to some 1 % of GDP. The national defensive budget is below the rate, which is common in other European members of the NATO.

Communication Department
Supreme Audit Office

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