Ministry of National Defence
Information and Public Relations Directorate
No.342 - 10 December 2016
The Ministry of National Defence makes the following specifications regarding the strategic acquisition programs “Multifunctional corvette ” and “8x8 APC”:
The main principles applied this year within the Romanian Armed Forces procurement policy, including the development of the two major acquisition programs, were: respecting Romania’s main security interests-by fully using the national defence industry capacities, rendering profitable the entire potential of the offset options and transparency of the acquisition procedure.
Decisions were substantiated following rigorous analysis processes and concept studies which fully respect the national and EU legislation in force.
Thus, the 8 x 8 APC strategic programme set the premises to manufacture this type of equipment in Romania through the establishment of the Romanian-German mixed society by means of the partnership signed by Moreni Factory, the producer of the armored personnel carriers that are currently equipping our Military and one of the most important manufacturers of this type of equipment worldwide, Rheinmetall Landsysteme. The two partners’ goal is to manufacture the new 8x8 APC at the operational standards set by the Romanian Land Forces, with know-how transfer from the foreign partner to the Romanian factory.
The manufacturing of the new APCs at Moreni is an option that helps us relaunch the Romanian defence industry, at the same time being a major development opportunity not only for the local economy but also for the national one, both in the production and maintenance areas.
The MoND is the beneficiary of the new future product whose starting point is a Romanian research solution (a project funded from the budget that must be rendered profitable), in accordance with the military and technical requirements set by the Land Forces.
There is no budget commitment this year in this respect, the contract with the MoND is to be signed after formulating an offer and making the negotiations, as the cooperation process is to take place on medium-term, for many years. In this stage, as it is about a new product manufactured in Romania, we can only take into consideration cost and price indicators.
“Multifunctional corvette” strategic procurement program has gone through an unprecedented transparent decision-making process with respect to acquisitions in Romania (the Draft Government Decision was presented in the website), which respected all stages imposed by the current legislation in force.
The procedure status is as follows:
• Taking into account that the estimated value of the contract, without the VAT, is bigger that the equivalent in lei of 100 million euro, the Ministry of National Defence sent to the Parliament of Romania (on October 18, 2016) the letters requesting the preliminary approval to initiate the procedure of attribution as stipulated in Article 51, Paragraph 2, from Government Ordinance 114/2011 regarding the attribution of certain acquisition contracts in the field of defence and security.
• When preparing the attribution of the acquisition contract, the Government of Romania approved (as stipulated by law) the circumstances and procedure specific to “Multifunctional corvette” strategic procurement program with a view of having four SIGMA corvettes-project 10514 delivered by Damen Shipyards Group, through Damen Schelde Naval Shipbuilding BV, and built and equipped in Naval Damen Galaži S.A. Construction Site.
The estimated value of this program is 1.6 billion euro (including VAT) during a seven-year period, amount which covers the acquisition of the ammunition and initial logistic support, including the training of the crews. The ministry did not change these sums during the decisional transparency procedure. Taking into account the standardized forms established by law for the transparent publication of the norms, the first substantiation note published on the MoND website specifies the budget impact (and not the total value of the contract) for the first four years, which amounted 800 million euro. Following the inter-institutional consultations, taking into account the fact that the contract will be developed over a seven-year timeframe, a decision was taken to specify the total value of the contract in the substantiation note –in view of ensuring predictability of financial resources- including all dimensions of the project (the manufacturing of the ships, the ammunition acquisition, initial logistic support and the training of the crews).