The Prague Post
http://www.aaaradiotaxi.cz/index.php?xSET=lang&xLANG=2
December 1st, 2008
Endowment Fund     Business Listings ONLINE      Reservations      Classifieds    Subscriptions
Prague accommodation

Home » Archives » Business

Tenders under fire

Opaque Army and finance deals raise alarm

By Benjamin Thomas Cunningham
Staff Writer, The Prague Post
August 20th, 2008 issue

Armored vehicle photo courtesy of the Defense Min
The Czech Army purchased 15 Dingo 2 light-armored vehicles from Germany without announcing a public tender.
Two recent government tenders point to a continuing lack of transparency in government transactions as separate contracts issued by the Finance and Defense ministries raised red flags for opposition figures and nonpartisan observers alike.
Last month, the Finance Ministry reissued a tender for the State Treasury Project, an estimated 2.5 billion Kč digital information system overseeing accounting and budgets. The move came after a similar tender was scuttled in February by complaints to the government Anti-Monopoly Office (ÚOHS).
The potential contract in the second tender has been expanded, and is to be the biggest-ever public purchase of information technology.
“You can hardly speak of transparency in that case at all,” said David Ondráčka, director of Transparency International Czech Republic about the first round of bidding.
The proposed computer system is meant to streamline financial management and make it more transparent. “A significant emphasis is placed on the openness of the new systems,” touts the ministry Web site.
The original tender — which included requirements specific to certain bidders — brought a rush of letters to the ÚOHS and the Parliament’s Chamber of Deputies Audit Committee. Transparency International sent a letter, as did the Czech tech firm Gordic.
“The tender was prepared favoring one company. Their [specific] technology was mentioned in the bidding document,” Ondráčka said, pointing specifically to German IT firm SAP.
The second tender deadline is in September.
Finance Ministry spokesman Jakub Haas declined specific comment on the tender processes, but issued a press release calling the new tender process the “cleanest solution” to earlier complaints.
Dingo disputes
Meanwhile, defense officials face criticism after announcing a deal in July to purchase 30 all-terrain vehicles for use in Afghanistan without taking public bids — with some saying the vehicles are ill-equipped for the mission. The value of the vehicles — 15 Italian Iveco LMVs and 15 German Dingo 2s — totals about 1 billion Kč ($62.5 million). The Army previously bought four of each last year, also without taking bids.
“When the mission to Afghanistan was being discussed in Parliament, the Defense Ministry did not show any need to buy new vehicles or any other new technology,” said Shadow Defense Minister Petr Hulínský. “Related questions about corruption and nontransparent management of the ministry arise.”
Previously, the Army had borrowed Humvees from the United States.
Andrej Čírtek, a Defense Ministry spokesman, said “the security situation has changed,” noting that Humvees have proven vulnerable to attack by improvised explosive devices used by suicide bombers.
“If you require an armored vehicle necessary for protection of Czech soldiers, speed of delivery is the most important factor,” he said.
In March, the weekly magazine Euro reported that the Dingo 2 failed to meet expectations during military testing. Hulínský also voiced concern regarding two Dingos that have been disabled for technical reasons and questioned whether their size made them maneuverable enough for urban settings.
Variants of Iveco LMV are in use by other armies — including British, Italian, Norwegian and Bosnian forces — and are deployed in Afghanistan and Lebanon. It is designed as an infantry transport vehicle with a remote weapons system for smaller armaments.
The Dingo 2 — used by the Austrians, Belgians and Germans — is a larger vehicle equipped with a standard remote-controlled machine gun that can be exchanged for larger weapons, such as a grenade launcher.
Čírtek said the new Czech vehicles fit in well with fleets used by other militaries in Afghanistan.
Defense officials have also faced criticism for past purchases made without tenders. An Italian competitor has complained about a Defense Ministry plan to purchase four Spanish CASA C-295M transport planes, claiming the deal does not fall in line with European Union competition principles.
The Defense Ministry also failed to issue a public tender when it signed a 2.6 billion Kč contract with local firm Tatra to supply the Army with trucks through 2009.  
Čírtek said the ministry followed the law on all purchases and pointed to exceptions to tender requirements, such as time-sensitive needs and the protection of classified information.
 “In general, I am very worried about the Defense Ministry misusing exceptions to the tender process,” Transparency International’s Ondráčka said.  
A report issued earlier this year by the NGO Estat.cz found the government had failed to deliver on election promises to increase oversight capacities monitoring tenders and other public expenditures.
Ondráčka said that nontendered purchases are among his biggest concerns. With bids for the second round of the State Treasury Project due Sept. 9, he added: “We will definitely follow it very closely.”

Benjamin Thomas Cunningham can be reached at bcunningham@praguepost.com


Other articles in Business (20/08/2008):

Browse the Current Issue

If you enjoyed this article, why don't you subscribe to the print version!
We accept secure online transactions provided by PayPal and Moneybookers

Be the first to add a comment!


Full Name: *
City: *
E-mail: **
This comment can be published in the print version of The Prague Post
Enter the text on the right:
 visual captcha
Comment: *
* Required field. In order to be approved for display, comments must have a first and last name and a city.
** E-mails are required and will only be used for internal purposes.

Most visited in Business Listings

Hotel booking
The Prague Post Online contains a selection of articles that have been printed in
The Prague Post, a weekly newspaper published in the Czech Republic.
To subscribe to the print paper, click here.
Unauthorized reproduction is strictly prohibited.