Procurement Committee of the Ministry of Defence (MoD) of Latvia has decided to terminate the current procurement of light and medium high-mobility armoured four-wheel drive (4×4) tactical vehicles.
After examination of Procurement Monitoring Bureau’s (PMB) findings, MoD Procurement Committee concluded that it is impossible to eliminate the identified irregularities in scope of the existing procedure and, as Defence and Security Procurement Law provides, negotiated procedure must be stopped.
Implementation of PMB recommendations requires changes in the technical specification. Defence and Security Procurement Law, however, does not allow to make such changes in an on-going procurement. Vehicle testing procedures also need to be reviewed. Since National Armed Forces do not have the appropriate resources to conduct an all-round verification, comprehensive evaluation and testing of vehicle performance cannot be done without the support of other countries. This would require different test protocols, but the Law prohibits to make any changes in protocols of an on-going procurement. Required changes in the procurement requirements would have little effect on the evaluation of operational performance of vehicles. However, the Law prohibits even the slightest changes in the initial specification.
“Adequate military mobility is vital for enhancing National Armed Force combat capabilities. Responsible staff has been tasked with review of the technical requirements to make sure the procurement is successful,” stressed the Defence Minister Artis Pabriks. “An inter-governmental agreement would resolve any concerns about this procurement. We must find and decide which partner country government can provide our National Armed Forces the necessary operational mobility platforms as soon as possible”.
According to MoD experts, this is the most complex defence procurement in the history of Latvia’s military sector. Although the negotiated procedure had to be terminated, valuable experience has been gained. Lessons will be made and considered in future procurements, ensuring that NAF are provided with the most suitable items. MoD experts believe that an inter-governmental agreement would provide the required procurement transparency and resolve supply security concerns explicitly and completely.
To identify the irregularities, MoD conducted a review of the Procurement Commission’s rules of negotiated procedure. The review indicated that rules were not the main issue bidders complained about.
As previously reported, Ministry of Defence began working on the acquisition of light and medium 4×4 tactical vehicles in 2017. An in-depth evaluation of submitted bids by the Procurement Committee, composed of experts from the Ministry of Defence, State Centre for Defence Military Objects and Procurement, and National Armed Forces, took more than a year. Negotiated procedure for purchase of light and medium 4×4 tactical vehicles was conducted in two stages. 12 bidders submitted their bids for the negotiated procedure, of which 6 bidders were found by the Procurement Committee to be eligible for Phase 2 of negotiated procedure.
In Stage 2, Procurement Committee received 4 bids from Oy Sisu Auto (Finland) – GTP 4×4, AM General (USA) – HUMWEE, Paramount Group (South Africa) – Marauder LAV and Otokar (Turkey) – Cobra. National Armed Force experts tested all proposed vehicles. Testing focused on technical performance of vehicles and whether they meet the technical needs of National Armed Forces. Vehicles were tested both on public roads and in off-road conditions. This was the first time in the history of NAF that it had to evaluate such vehicles, and proposed vehicles were tested by experts from almost all branches of NAF. Procurement Committee had several rounds of negotiations with all four bidders to collect additional information and technical data about bids.
Procurement Monitoring Bureau blocked the awarding of contract to the winning bidder, Finish company ‘Oy Sisu Auto’, in late 2018 because of appeals by other bidders. Procurement Monitoring Bureau ordered the Procurement Committee to eliminate all identified irregularities in three months.