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One Bill to tackle 12 Corruption Risks in the State Defense Order

Bill No.2398 “ On Defense Procurement ” eliminates 12 major corruption risks in the field of State Defense Order (SDO). Secretary General of the Independent Anti-Corruption Committee on Defense (NAKO) Olena Tregub told this to the AirmiaInform portal.

Risk 1. Absence of a centralized automated database with information on arms manufacturers and military equipment. The draft law provides for the creation of such a register by the Ministry of Economic Development.

Risk 2. Lack of modern information processing tools when planning SDOs. This risk is overcome by creating the above-mentioned electronic registry.

Risk 3. Difficulty of qualification of the SDO contractor. The bill provides for significant simplification of registration.

Risk 4. Discoordination of legislation in approving SDO. The bill delineates the powers of the Ministry of Defense and the Ministry of Economic Development in the field of defense procurement.

Risk 5. Excessive secrecy of SDO. The bill amends the law on state secrets.

Risk 6. Absence of competitive procedures in secret defense procurement. The bill solves this problem and regulates the order of purchase from a single supplier.

Risk 7. Limiting the maximum profit of suppliers. The bill abolishes the soviet principle of calculation mechanisms (RCMs). At the same time, when purchasing from a single supplier, a “fixed contract value” will work. It will stimulate the development of production and increase profits by streamlining processes.

Risk 8. Absence of competitive procedures at import purchases. The bill provides for purchases through e-commerce sites, including NSPA and FMS programs.

Risk 9. Restrictions on the Office of the Defense Ministry’s military missions in the defense procurement review. Instead of controlling bookkeeping and costing, the audit will focus on product quality.

Risk 10. Change in the cost of production during the performance of the contract. The bill clearly sets out the conditions when it can be done.

Risk 11. Absence of a clear procedure for monitoring the implementation of SDOs. The bill structures this responsibility and provides for the approval of model contracts.

Risk 12. No automatic information processing system. This problem is solved by the introduction of an electronic registry subordinated to the Ministry of Economic Development.