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Q67.

Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?

67a. Reporting policies & procedures

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67b. Transparency

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67c. Monitoring

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67d. Enforcement

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The Law on Public Procurement (LPP) sets out the obligations of the contracting authorities to ensure that during the procurement process the economic operator/s meet contractual obligations, including subcontracting. The LPP also sets out sanctions imposed on the companies, in case of a company’s failure to meet contractual obligations [1, 2]. The Government Decision on Defence Procurements excluded from the public procurement rules obligates the contracting authority to ensure monitoring and implementation of defence contracts [3]. However, no sanctions are given for the failure to meet delivery obligations in this act.

Information on contracts awarded following the LLP procedures is published in the procurement bulletins produced by the PPA [1].
The PPA monitors the execution of the contracts and publishes in the bulletins the decisions for the companies expelled from public procurements, including for failure to deliver on the contracts. There is no information on defence and security contracts procured outside the LPP procedures [1].

Implementation of contracts is monitored by the contracting authorities and the APP. The APP produces reports with aggregated figures on contract monitoring and completion. One of the problems is the high number of contract amendments. According to the APP, in 2017, the share of contract amendments was 21.2%. The APP has undertaken measures to reduce this figure by 20% in 2018, 15% in 2019, and 10% in 2020 [1].
However, no detailed reports are published on individual contract breaches.
Regarding defence and security contracts procured outside the LPP procedures, no information is published, so it is unclear how they are monitored. The State Supreme Audit Institution (SSAI) has found evidence of memos and information produced for individual contracts produced for high-level MoD officials (ministers), but no consolidated reports are produced [2].

The PPA regularly publishes information on sanctions given. In 2017, seven economic operators were expelled for failure to deliver on the contract [1]. In 2016 there three operators were expelled [2] and three in 2015 [3]. Given the large percentage of contract amendments, 21.2% in 2017 [1], the number of sanctions given during this year, appears relatively small [2]. However, it is not clear what causes such a relatively high rate of contract amendments.

No formal policies or procedures that outline how to monitor, assess and report upon a supplier’s service or delivery obligations could be found during the research. The 2016 Public Procurement Law only stipulates that the contracting authority should write an evaluation report on the conditions for carrying out the project and its overall cost in relation to the initial objective (Art. 164). No further information on obligations on reporting or delivery could be found in chapter five on control of the public procurement (1). A review of laws and decrees on the armed forces from 2016 does not indicate that such a policy has been issued (2).

No formal policies or procedures that outline how to monitor, assess and report upon a supplier’s service or delivery obligations could be found during the research (1), (2).

No formal policies or procedures that outline how to monitor, assess and report upon a supplier’s service or delivery obligations could be found during the research (1), (2).

There no evidence that breaches of contract are acted upon (1), (2)

Procedures are laid out in the 2016 Manual on Public Procurement of the National Public Procurement Service (SNCP) (1), however, there is a lack of clarity with regards to assessment, monitoring and evaluation. In April, regulations enacted by Presidential Decree No. 88/18 aim at streamlining the implementation of legal procurement procedures within the ministries by establishing a system of Public Procurement Units (UCPs) within each contracting entity at the central, provincial and local level to overview procurement procedures. Contracting entities (EPCs) are obliged to appoint a procurement manager (with proven technical experience and project management skills) for each public contract, they are tasked with monitoring execution and delivery. Procurement managers are under the supervision of the National Public Procurement Service (SNCP) in the Finance Ministry. While UCPs and the SNPC’s enhanced role are clear upgrades, it is not clear whether mechanisms and procedures encompass all procurement cycle stages. The Manual on Public Procurement is also not clear on this (2), (3), (4).

The current Public Procurement Act, as well as the previous legal bill, does not clearly define monitoring, assessment and evaluation procedures nor does it assign each to particular parties.

The system has not been rolled out completely. Procedures are laid out in the 2016 Manual on Public Procurement of the National Public Procurement Service (SNCP) (1), however, there is a lack of clarity with regards to assessment, monitoring and evaluation. In April, regulations enacted by Presidential Decree No. 88/18 aim at streamlining the implementation of legal procurement procedures within the ministries by establishing a system of Public Procurement Units (UCPs) within each contracting entity at the central, provincial and local level to overview procurement procedures. Contracting entities (EPCs) are obliged to appoint a procurement manager (with proven technical experience and project management skills) for each public contract, they are tasked with monitoring execution and delivery. Procurement managers are under the supervision of the National Public Procurement Service (SNCP) in the Finance Ministry. While UCPs and the SNPC’s enhanced role are clear upgrades, it is not clear whether mechanisms and procedures encompass all procurement cycle stages. The Manual on Public Procurement is also not clear on this (2), (3), (4).

The current Public Procurement Act, as well as the previous legal bill, does not clearly define monitoring, assessment and evaluation procedures nor does it assign each to particular parties.

Reports published by the National Procurement Service (SNCP) point to serious monitoring deficiencies (1).

For example, in its most recent statistical bulletin (first trimester of 2018), the SNCP observed the following: “The database of public contracts procedures is deficient with regard to information on estimated and contract values. As frequently observed, the estimated value is registered and declared, but not its contract value, and vice-versa.” (1), (2), (3).

There is no evidence that contract breaches have been acted upon when found. Enforcement capacity is low, given the limited information disclosed to the National Procurement Service and the limited capacity of the Audit Court (see Q67C) and SAI capacity (see Q17) (1).

There are formal procedures for monitoring and evaluating the obligations arising from contracts for goods or services with state entities. This includes sanctions. The control body for the fulfillment of the obligations by the contractor, with all the entities of the EP, is the National Contracting Office. In addition, regulations provide for Reception Commissions whose members are appointed by the competent authority to authorise the call and whose responsibility is to verify whether or not the service meets the conditions established in the contract. In the event of non-compliance by bidders or co-contractors, current regulations provide for sanctions. [1] [2]

Most contracts are available on the COMPR.AR website. Its use is mandatory for all national administration jurisdictions. In turn, in order to grant greater transparency to the process, provision 62/2016 of the National Contracting Office establishes that the files with selection procedures must record everything that has been done, from the beginning to the end of the execution of the contract. [1] [2] [3] On this issue, ACIJ considers that the development of electronic purchasing tools was an advance in the way in which the State contracts, which helps reduce bureaucratic costs and generates information available to civil society and companies. The ACIJ notes that the COMPR.AR portal is not entirely efficient, as the information published in open formats only includes calls and awards and not the process in all its stages. [4]

Monitoring is a prerogative of the National Administration based on the efficient use of its resources. This monitoring is greater in service contracts due to their own characteristics (permanence in time). In turn, the Reception Commissions, having the purpose of monitoring, must make the appropriate reports. Publication of what has been done or the conclusions that arose as a result of monitoring are not evidenced on the official portals. [1] Dubinski points out that “the practice denotes laxity in controls and an administrative and bureaucratic overflow that undermines its efficient exercise.” [2]

There are cases under investigation by SIGEN for example, the hiring of the repair of half-life of the ARA San Juan, but due to its political implications, that remains in reserve. [1] The imposition of sanctions is an exclusive and exclusive power of the National Contracting Office, as it is the Governing Body of the contracting system. In this sense, on the COMPR.AR website there are two sanctions, one of which is in the orbit of the Ministry of Security, and regards a contractual breach by a supplier. The verdict, however, is not binding. [2] [3]

Procurement is regulated through the Law on Procurement [1]. Procedure for Organizing Procurement Process is regulated by Decree N526-N. The contractor’s obligations and procedures on reporting and delivery are regulated by the clauses defined under Chapter XVII. According to Article 33, the fines and penalties are applied should the supplier violate the agreement [2].

Contracts signed are publicly available at the Ministry of Finance’s Procurement Contracts dataset. The dataset provides the opportunity to download the signed contracts where the delivery obligations of contractors are reflected. Since the launch of an electronic procurement system, all the procurement is being done electronically with minimum human input. In this regards, all the general procurement activities are publically available. What the system misses, is the arms purchase and related contracts that are defined as a state or official secret and are not disclosed to the public [1].

According to the website of the Ministry of Defence (MoD), the MoD’s Control Department exercises the monitoring and control of the Procurement Process to ensure the legal framework. However, it does not provide any information whether it implements the monitoring of reporting and delivery obligations as well [1, 2]. The contracts uploaded at the Ministry of Finance state that the disputes arising from a breach of contract shall be settled by negotiations. Should the parties fail to reach an agreement, the disputes shall be settled in courts. The Department of State Interests Protection of the Military Prosecutor’s Office investigates cases to clarify the scope of the damage caused to the state as a result of non-fulfilment of providers’ obligations under different agreements signed between the providers and MoD. It then sends the materials to the General Military Investigative Department of the Investigative Committee [3].

Signed contracts define regulation for breaches of the contract (a random contract was studied for this case). In case of any breach, they may acknowledge the breach in the section of unilateral breaches of contact on procurement.am website, thus notifying the other party on the status of the contract. Before going to court the parties shall try to solve the issue internally. If the issues are overcome through negotiations, the case goes to the Complaint Board or the court, in case the parties are not satisfied with the decision of the board [1, 2, 3]. In the Official Bulletin, there are very few decisions about unilateral resolutions of contracts [4]. There are no public data on classified arms contracts.

Though formal Department of Defence (DoD) contract reporting policies are not publicly available, it is highly likely that they exist in the Defence Contract Management Framework and Defence Contract Management Handbook, and the Australian Government Contract Management Guide [1] includes some more general guidelines that give insight into the reporting policies across government. The Australian Government Contract Management Guide is a high-level document that indicates that managing and measuring contract performance and managing delivery and acceptance are both required tasks for all contracts (except measuring contract performance, which is recommended for the most routine of contracts but required for all others) [1]. For measuring contract performance and delivery, the document indicates that a service level agreement and other monitoring tools are “typical performance measures”, and that “withholding contract payments” may be a remedy for underperformance if it is available under the contract [1]. The Guide also includes two information boxes on managing supplier performance and managing more serious underperformance, giving more examples of what contract managers can do and that default (breach or non-performance leading to sanctions), remediation (obliging contractor to carry out steps to ensure proper performance), and termination (ending the contract early, usually to non-payment) [1]. For managing delivery and acceptance, general advice is offered that the contract manager “should notify the supplier immediately and agree on a way forward” and that, “The contract may include provisions around acceptance of deliverables and the process for remediation of non-compliant deliverables, so ensure you understand and follow any contractual obligations and processes” [1].

The Defence Contract Management Framework / Handbook documents are referenced in the Defence Procurement Policy Manual [2], but do not appear to be publicly available [3]. These documents give insight into the contract management phase of the procurement lifecycle, which includes as a critical stage contract performance management, when reporting policies would be set [1, 2]. Repeated efforts by the Researcher to ask about these documents by reaching out to DoD officials and the media line went unanswered. The Australian Government Contract Management Guide is a high-level document that indicates that managing and measuring contract performance and managing delivery and acceptance are both required tasks for all contracts (except measuring contract performance, which is recommended for the most routine of contracts but required for all others) [1, p25]. For measuring contract performance and delivery, the document indicates that a service level agreement and other monitoring tools are “typical performance measures”, and that “withholding contract payments” may be a remedy for underperformance if it is available under the contract [1, p30]. The Guide also includes two information boxes on managing supplier performance and managing more serious underperformance, giving more examples of what contract managers can do and that default (breach or non-performance leading to sanctions), remediation (obliging contractor to carry out steps to ensure proper performance), and termination (ending the contract early, usually to non-payment) [1]. For managing delivery and acceptance, general advice is offered that the contract manager “should notify the supplier immediately and agree on a way forward” and that, “The contract may include provisions around acceptance of deliverables and the process for remediation of non-compliant deliverables, so ensure you understand and follow any contractual obligations and processes” [1, p32]. Certain high-value procurements are also subject to reporting requirements spelled out in Industry and Defence Scorecard documents [4]. While the policies and procedures are not spelled out in enough detail here to ascertain how robust the reporting, monitoring, and assessment policies are, it is clear that policies exist and are likely clarified in non-public DoD documents.

While procurement officials are required to publicly report and publish details of contracts and contract amendments over a certain value to AusTender [1, 2], the level of detail required is very low. For the initial posting of the contract, no more detail is required than the value of the contract, basic supplier details (trading name, Australian Business Number, address) the broad category of the procurement, a basic description (usually less than 10 words), contract period, procurement method, and a handful of other very basic details [3]. Amendment notices only appear to include the amendment value and another basic description of the reason behind modification (again, usually less than 10 words) [4, 5]. Since beneficial ownership is not reported as part of the initial contract notice or the amendment notice, it is impossible to tell whether beneficial ownership has changed. This is also true for additional costs, such as consultants, though it is required to report whether a consultant was engaged for the contract (just yes or no, not the actual amount spent on consultants). While the Commonwealth Procurement Rules state that the identity of sub-contractors must be made publicly available upon request [6], it is unclear if changes in sub-contractors during contract amendments would also be subject to disclosure, and this information is not disclosed without a specific request. The Australian National Audit Office (ANAO) has the power to demand any information required in the course of carrying out an audit (including from contractors and private individuals), and may access any Commonwealth premises [7]. An optional ANAO Access to Contractor Information clause which may be added to any government contract allows the ANAO access to contractor premises as well [8]; if these are not included in Defence contracts, those contracts must be listed in the Annual Report and a reason provided [9].

Contract monitoring reports and Defence policy through the Defence Contract Management Framework / Handbook are not publicly available; therefore, it is difficult to say whether reporting and delivery obligations are being carried out. Reports of external oversight bodies however, indicate that these obligations generally are being performed. The Australian Government Contract Management Guide indicates that the contract review step, a part of contract closure, is not required for the most routine of contracts, recommended for somewhat more complicated contracts, and strongly recommended for both complex and strategic contracts [1]. In other words, post-contract review is not a strict requirement for any type of contract, and presumably is not always carried out. Measuring and managing performance, including through verifying quantitative indicators of performance and whether service levels are adequate [1, p30], is required for all but the most routine of contracts [1, p25]. It is unclear if contractor and sub-contractor performance is considered separately for post-contract review or contract monitoring. The Guide does emphasise repeatedly that procurement officials should ensure that value for money as outlined in the contract is achieved, and recommends various types of remedies that officials can engage in if performance is inadequate [1, p31]. A recent Australian National Audit Office (ANAO) report investigating the contract management of a major Defence contract provides some insight into how monitoring and review is done, at least in the case of significant projects. These include Independent Assurance Reviews during the life of the contract and contract reporting against milestones [2]. Another 2016 ANAO report on Defence’s acquisition of Tiger helicopters, while recommending that Defence be more proactive in distributing the lessons of post-contract reviews, indicated that these were, at least in the case of significant projects, being carried out [3].

While the Defence Contract Management Framework / Handbook – which would likely provide more information on how breaches are dealt with and enforced – are not publicly available, the Australian Government Contract Management Guide and external oversight reports on Department of Defence (DoD) projects indicate that generally, enforcement is robust. The Guide makes it clear that inadequate performance of the terms of the contract should be remedied in order to ensure value for money, including by resorting to contractual measures. For example, the Guide says: “If the underperformance is repeated or is more serious in nature, you may need to take formal action. Your contract will include provisions dealing with default and remediation, as well as termination,” and, ” You should not accept, and therefore should not pay, for goods and services that do not meet the contractual standard” [1]. Additionally, “If goods or services do not meet contractual standards, follow processes set out in your contract” [1, p32]. A 2016 Australian National Audit Office (ANAO) report on the Army’s acquisition of Tiger helicopters included quotes from an internal DoD Lessons Learned report, stating that “The Commonwealth did not adequately enforce the provisions” of the helicopter sustainment contract [2]. However, a timeline of issues around enforcement of the contract indicates that Defence took steps to enforce the contract, despite the internal criticism, including activating a “Stop-Payment provision” at one point [2, p36-38]. Given that these issues with the Tiger helicopter program were referred to the ANAO, this is also an indication that enforcement issues are escalated and overseen in DoD, if the need arises. Members of Parliament and observers, on the other hand, have been critical of the level of information they are given about delays and cost overruns – potential breaches of contract – by DoD [3].

Section 39 of the Civil Code (1) mentions the duties, responsibilities and responsibilities of the contractor in general. Article 385 of the Code deals with the “Concept of Commitment”. According to the commitment, a person (the debtor) must act in favour of another person (the creditor), for example, to pay, to give property, to do business, and to provide services. Or they should avoid certain actions, and the creditor has the right to demand from the debtor the execute of his/her duties.
According to the experts, there is no legislative base covering the activity of contractors in the country. For this reason, it is not possible to achieve accountability from the contractors, to increase their responsibilities (2).

There is a serious gap in the contractors’ activities in the country. Experts believe that one of the main points of corruption is related to the activity of contractors. The leaders of companies that won the tenders in the security and defence sector are mostly relatives of high-ranking officials. So, there are always questions in society about their activities. The oversight agencies do not have any research on the activities of these companies (1, 2).
Ismayil Alakbarov, founder and head of Neuron Technologies, one of the well-known IT companies in Azerbaijan, has accused the Azerbaijani government of holding tenders illegally and allowing serious misconduct in this area. The entrepreneur said that winners in 90% of public procurement were previously announced, “[t]he State Tender Bidding Commissions award tenders to the companies they have previously defined.” According to him, “[t]here are gaps in the legislation, I suggest that the law on procurement with the participation of entrepreneurs be revised and changes will be made, and businessmen have a lot of proposals” (3).

Procurement offices do not provide any information regarding contractors’ activities. Over the past five years, concrete information has not been found. The primary reason for this is the lack of fair competition in the tenders (1).

The Law On Public Procurements provides complaint mechanisms for violations of the law. According to the Article 55.1, if a consignor (contractor) states that it suffers or will suffer losses or damage as a result of non-performance by procurement agency of obligations set by present law they shall be entitled to complain as provided in legislation (1). However, as procurement offices do not report contractors’ activities, it is not possible to determine whether there are any breaches in the signed contracts. In some cases, information about the Ministry of Defence’s investigation of companies participating in tenders was published in the media. In 2015, the Ministry of Defense reported that media recently published several times unmodified, inaccurate, rumours that the companies providing food to the Ministry of Defence are providing out of date and poor quality foods, and the publication highlighted the claims of a group of entrepreneurs which are groundless.” The Ministry of Defence claims that there is a procedure for food safety and tenders are open to the public, it published the article on the official web site (2).

There are formal documents and internal regulations to monitor, assess and report on the supplier’s services and delivery obligations. However, these regulations are not always applied, and sometimes they are done to fill bureaucratic requirements rather than serious reporting. These procedures do not include sanctioning, time, or quality [1, 2].

Following a search of the websites of the Parliament, the Ministry of Defence (MoD), the Ministry of Finance, the government and other media sources, and then verified by interviews, more information was not available. There is a high probability that there is a lack of transparency. In addition, there is no accurate report that includes all details, including quality that can be made public or provided to other oversight bodies [1, 2]. According to our sources, reporting includes only the quantity, without any other inspection of time or quality.

Procurement officers do not conduct any reporting as suppliers provide items directly to units or stocks. Procurement units do not receive the goods and suppliers reports. Reporting instead comes from the receiving units or stocks but not from procurement officers [1, 2]. Stock officials and receiving units send reports to the main commands about the items received. Following a search of the websites of the Parliament, the MoD, the Ministry of Finance, the government and other media sources, and then verified by interviewees, further information was not available. There is a high probability that there is a lack of transparency.

There are no known cases where suppliers and contractors have been punished, especially with strategic contracts regarding weapons, ranks or items of value more than one million USD [1, 2]. Following a search of the websites of the Parliament, the MoD, the Ministry of Finance, the government and other media sources, and then verified by interviewees, no further information on the subject could be found.

DP-35 [1] outlines the full process for the monitoring, assessment, inspection and reporting of suppliers’ delivery obligations. There is also an arbitration system in place in case of cancellation of contracts or payments, or imposition of fines; such cases are to be settled by the Secretary of the Ministry of Defence.

Contracts are not publicly available and are covered by the Official Secrets Act of 1923, as per Section 30 of DP-35 [1]. Nor does the DGDP website provide any information on contract modification [2,3,4]. There is also no such information available in the annual reports of oversight bodies such as the CAG or DAD.

There is no official or public information to suggest that procurement offices have been regularly conducting reporting and delivery obligations [1,2].

DP-35 authorises the Secretary of the Ministry of Defence to take action in the event of a breach of contract [1]. In the absence of any public information, it is difficult to ascertain whether breaches of contract have been acted upon. As such, this indicator cannot be scored and is marked ‘Not Enough Information’.

There are formal procedures in place for reporting, monitoring, and assessing a supplier’s service and or delivery obligations. The royal decree of 14 January 2013 on the execution of public contracts outlines the processes that are to be followed [1]. Additional monitoring mechanisms and sanctions are put in place for every contract in the tender specifications.

First, according to the law of 17 June 2013, all candidates and bidders need to be informed of the motivated outcome of each tender [1]. Second, according to article 62 in the law of 17 June 2016 on public procurement, and article 39 of the Royal Decree of 23 January 2012 on public procurement in the defence and security sectors, a contract award notice of all contracts exceeding the European standard needs to be published on the TED platform [2, 3].

Exemptions are stipulated in the law of 17 June 2016. Lastly, and based on the law of 11 April 1994, all citizens may ask for insight in the details of all contracts. Regarding oversight bodies, the Cour des Comptes and the FIA have full access to all information related to the contents, execution and modification of contracts [5, 6].

Formal contracts monitoring reports are not systematically produced, but evaluation of performance is systematically performed, and insufficient performance is considered as breach of contract, which leads to official measures [1].

There is Not Enough Information to score this indicator. No evidence of breaches of contract were found [1, 2]. Sanctions are stipulated in the Royal Decree of 14 January 2013 [3]. There is no evidence that breaches of contract would not be adequately acted upon [1, 2].

There is a formal procedure that partially regulates the contract monitoring in the Ministry of Defence (MoD), it is based on the activation of bank guarantees for failure to fulfil contract obligations [1, 2]. There are no further formal policies or procedures, except the possibility to include measures such as resolution or sanctioning procedures for incomplete or inadequate service delivery in the contract itself, which must be in the draft contract within the tender documentation (Article 52, paragraph 3 of the Public Procurement Law (PPL)) [3].

The MoD publishes contract modifications on their website [1, 2]. Tender documents and any amendments thereto were published on the Public Procurement Portal, as defined by the PPL [3, 4]. The MoD did not make changes to any elements of the contracts in any of the procurement procedures conducted [3]. Since the Public Procurement webpage is the webpage of the Public Procurement Agency, it means that MoD is forwarding all the relevant information concerning the public procurements but the information on the level of the scrutiny conducted by the Public Procurement Agency is unknown [2].

According to the government reviewer, the Managing Board regularly publishes all elements after the signing of the contract, which relate to the data on the subject of the procurement, information on suppliers, basic elements of the contract, value or percentage of contract realization, as well as the date of contract completion. The Managing Board does not have a principle of derogation from contractual obligations as ordered by the PPA that no change in the contract is allowed during the implementation. All data is available to the public and their monitoring is possible by all participants and supervision of public procurement. The Managing Board provides this transparency through all stages from the announcement of the plan, the TD, the Choice Decision, the notification of the contract implementation. This information could not be independently verified.

According to the MoD’s audit report from 2017, during 2017 the MoD requested by the bidders to the performance of the contract is guaranteed by submitting an appropriate bank guarantee for execution contract [1]. This measure is mentioned in Article 47, paragraph 1, of the PPL as a guarantee for liability insurance coverage for the implementation of the contract [2]. In 2017, the MoD started with several procedures of activation of bank guarantee for failure to fulfil contract obligation [3]. The contract monitoring and performance process are mainly regulated by the use of the mechanism of bank guarantees in the MoD and the Instruction on Recording and Invoking Bank Guarantees, No. 12-02-3-1355-1/18 dated 11 April 2018 [1, 4]. However, the available information does not allow to properly score this indicator.

No reports on monitoring of contract execution by the MoD are available. There is no possility to ensure that existing mechanisms are enforced. As such, this indicator cannot be scored and is marked ‘Not Enough Information’.

The only sources are the yearly reports of the Audit Office of the Institutions of BiH. During 2017, the MoD started with several procedures of activation of bank guarantee for failure to fulfil a contract obligation. In 2017, 54,589BAM was charged by the MoD [1]. In the 2018 Audit Office report, it is stated that the MoD did not activate the bank guarantee in the amount of 24,877 BAM, which shows that the enforcement is not fully in place [2].

According to the government reviewer, information is publicly available of aggregate data on the implementation of each contract (bidders, basic elements of the contract, amount, period of realization), which indicates regular monitoring of the implementation of the contract and their publication. Regular reports are compiled in accordance with Regulation 02/18, which provide information on contract performance/non-performance and proposed measures. There is information on the activation of BG as well as on the calculation of penalties as possible penal provisions defined in the contracts. This information could not be verified.

The PPADB Act in conjunction with the PPADB Manual outlines the procedures that must be followed by contractors in terms of their contractual obligations [1]. Furthermore, the PPADB Act and the PPADB Manual empower the Procuring Entity as well as the PPADB to punish non-compliance by the contractors [1]. The PPADB Operations Manual provides inter alia that contracts are legally binding agreements between the parties and therefore care needs to taken at all stages, of the contract implementation to ensure compliance with all clauses of the contract [2]. No changes may be made by either party, without the express agreement in writing, of both parties [2]. Additionally, special attention needs to be taken, where potential changes may cause cost increases to previously committed funds [2]. Chapter 12 (pages 130-139) of the PPADB Manual provides for Contract Monitoring and Reporting. For example, paragraph 12.3 of the PPADB Manual provides that: “The expediting process is whereby the Procuring Entity monitors the contract to make sure the Contractor adheres to the conditions, or terms of reference, in the contract and that the items are provided at the right time and place. This process also encourages Contractors to ensure meeting the delivery dates and/ or to effect immediate delivery of overdue contracts. Expediting is a function of the Procurement Unit. The person responsible for expediting may have to be in frequent contact with the contractor, by telephone, e-mail and by fax and even to visiting their premises” [2].

The winning bid for non-classisifed contracts such as purchases of uniforms, vehicles, furniture are publicly available on the PPADB website [1]. However, post award contractual adjustments are not published [2].The PPADB Act makes provision for access to post ward adjustments to those who demnstrate material interest in the contract to show cause why they should be providef with such information. The PPADB Manual also makes provision for such requests [2].

There is no systematic periodical generation of reports that indicate monitoring [1]. In practice, the officer releases monitoring records if a particular contract either has been disputed or in cases where some other government entitiy has requested for such information [2]. Both the PPADB Act and the PPADB Manual do not provide for mandatory monitoring reporting.

The PPADB Act as well as the CECA provide extensively for sanctions of breaches of procurement contracts [1]. Depending on the nature of the breach, contractors can be debarred, blacklisted or criminally charged in line with the criminal law of Botswana [1]. A recent example is the suspension of 3 Pin Solution for a period of two years as well as a written warning to Rockeffeler Civil Engineering. Both were sanctioned in terms of the PPADB Act for improper and unethical conduct.

The assessor found guidelines made by all the different branches of the military; there is no standard procedure among the three forces and the Ministry of Defence. The Army’s guidelines for contract management establish the composition of the committees responsible for managing contracts within a military unit, to communicate to the federal administration potential flaws in the contract execution, and also to suggest a punishment. In addition to the contract manager, there is a contract auditor, responsible for checking all the details of the contract’s execution, among others [1]. There is an audit manual that establishes all the items that should be addressed, which includes resolution for or sanctioning procedures for incomplete or inadequate service delivery [2]. The Navy also publicizes its manual of contract management [3].

The Court of Auditors (TCU) receives detailed information, which is not always easily accessible by citizens. There is some information about contract execution and changes in the Annual Report sent to the TCU, but they are only disclosed annually [1]. The Transparency Portal is often too broad or does not show important categories to discriminate between contracts between projects, nor recent updates and additional terms [2].

Contract administrators have to follow internal guidance on contract managing and auditing, but these internal control documents are not automatically publicly available. A public report is released annually and sent to the TCU [1, 2]. The assessor found no evidence that these control mechanisms include subcontractors performance appraisals, but there are assessments about the supliers.

The annual reports released by each branch of the military provides evidence that if a contract needs changes or contracted firms do not deliver what they agreed to, managers and auditors do take action [1]. The external comptroller takes action when needed [2].

After the offering of a public contract, both the Law N° 039 and the Decree N° 0049 (2017) list some requirements that the winning contractor must fulfil to ensure delivery will be done and in the time allotted. These requirements are listed under Articles 28 and 29 of Law N° 039, and under Article 137 of Decree N° 0049 (2017). According to Article 28, “any contrator declared winner of a public contract or a delegated public service, is obliged to make available a contract execution guarantee, defined at the Council of Minister.” Similarly, Article 137 of Decree N° 0049 (2017), also requires a good execution guarantee before starting any activities. Yet, according to Article 32 of Law No. 039, allow the contracting authority may postpone the works, supplies, or activities, purpose of the public contract before their accomplishment based on the provisions of a Decree in Council of Ministers. In addition to these procedures that the contractor must comply with, both Law N° 039 and Decree N° 0049 (2017) display a list of sanctions (Article 55 and following of Law N° 039) that the contractor may face in case of any violation of the aforementioned provisions of the law and the decree indicated above. This means that there is a follow-up, and reporting work on the execution of public contracts. More importantly, the contracting authority usually moves to the site to supervise the execution of the contract. A definitive receipt of the infrastructure, supplies, or services delivered (1), (2).

According to Article 6 of Law N° 039 (2016) does not apply to contracts for works, supplies and services and public service delegations, where they relate the needs of defence and national security that require secrecy or for which protection of essential interests of the State is incompatible with publicity measures. A decree issued by the Council of Ministers specifies the nature of acquisition of goods and services (1), (2).

The Regulatory Authority for Public Contracts (ARCOP), regulates and monitors public procurement and contracting processes. The ARCOP ensures there are transparency and integrity in all the stages of the procurement process. Oversight institutions are briefed very little about the public procurement, as the government does not share is information making it hard for oversight institutions to scrutinize procurement stages, including contract failure and modification post-award. Again, it is hard to determine to what extent ARCOP’s promotion and integrity in the defence sector is (1), (2), (3), (4).

Article 6 of Law N° 039 (2016) does not apply to contracts for works, supplies and services and public service delegations, where they relate to the needs of defence and national security that require secrecy or for which protection essential interests of the State is incompatible with publicity measures. A decree issued by the Council of Ministers specifies the nature and modalities acquisition of the goods and services concerned by this exclusion (1), (2).

The ARCOP monitors public contracts along with the contracting authorities once the latter approves the tender of a prospective contractor. Created in April 2008 under the denomination “Regulatory Authority for Public Contracts” it became the Regulatory Authority for Public Order (ARCOP) in 2016, with the passing of Law N° 039 (2016). According to Article 10 of Law N° 039 (2016), the ARCOP is independent, it has financial autonomy, and cannot be influenced by anyone. The ARCOP also has an exclusive power to regulate the public order and can administer sanctions as well. Additionally, the missions of the ARCOP, displayed under Article 12 of Law N° 039 (2016) include defining policies, training and information, maintaining an information system, auditing and evaluating that system. Thus, there is a monitoring and evaluation work within the ARCOP, for making public order keep on track. However, there is no certainty that it effectively uses its power of sanction, and that its alleged independence is total. The Business Anti-Corruption Portal 2018 and 2016 reminds us that ” the culture of impunity and weakness of institution have made it difficult to implement real anti-corruption actions. Once the contractor complete the works (infrastructure) or services promised, the contracting authorities usually proceed with their receipt and send a receipt report to the ARCOP for further monitoring and evaluation (1), (2), (3), (4).

Article 6 of Law N° 039 (2016) does not apply to contracts for works, supplies and services and public service delegations, where they relate to the needs of defence and national security that require secrecy or for which protection essential interests of the State is incompatible with publicity measures. A decree issued by the Council of Ministers specifies the nature and modalities acquisition of the goods and services concerned by this exclusion (1), (2).

The Business Anti-Corruption Portal is clear about the law and enforcement system of Burkina Faso, as it already pointed out that the “weak enforcement of law, coupled with the poor access to government information, constitute all the difficulty in the fight against corruption in the country. It is unclear if sanctions are immediately applied to contract breaches. For example, the United States Department of State reported that the Supreme Audit Institution issued its annual report pointing out many cases of mismanagement in government institutions, including the mayor office of Ouagadougou, but no real actions were undertaken to apply sanctions. As per the provisions of Law N° 039, the ARCOP has the power to apply sanctions against both the employees of the contracting authorities and the contractor/bidders (Article 11), but it often remains a power in theory, with serious limitations on the ground (3), (5). The director of the ARCOP is appointed by the executive, which can remove him/her as well. Hence, it has a ‘de facto’ independence and financial autonomy. Yet, this cannot guarantee its ability to apply sanctions when breaches of contract occur (1), (2), (3), (4), (5).

Defence and security procurement is confidential, therefore there are no procedures that ensure that contractors meet their obligations on reporting and delivery (Articles 4 and 71 of the Public Procurement Code of 2018 [1]).

Defence and security procurements are confidential based on Articles 4 and 71 of the Public Procurement Code of 2018 [1]. Therefore, there is no possibility that there are mechanisms and procedures that ensure that contractors meet their obligations in reporting [1].

Given that Articles 4 and 71 of the Public Procurement Code of 2018 exempt defence procurement from any scrutiny, there is no possibility that there are mechanisms and procedures that guarantee any form of monitoring [1].

Given that Articles 4 and 71 of the Public Procurement Code of 2018 exempt defence procurement from any scrutiny, there is no possibility that there are mechanisms and procedures that guarantee any form of enforcement [1].

Formal policies do exist. [1] Section 12 of the Government of Canada’s Contracting Policy focuses on ‘Protecting the interests of the Crown’ and lays out the options to ensure that suppliers fulfill their contractual obligations. Such mechanisms include the submission of a security deposit by the bidder/contractor, the use of holdbacks, as well as insurance in order to reduce the risk of default to the Crown. [2] However, there is a significant amount of prescreening of the stability of firms prior to the awarding of contracts, and the more rigorous this is the more the risk to the Crown is reduced. [2] Detailed procedures for reporting and monitoring are provided in the Supply Manual, available on Buyandsell.gc.ca (e.g. that “Contracting officers must ensure that the supplier fulfills all reporting requirements”). In addition, the govermment’s “technical authority” must confirm that the contract requirements have been met. [3]

Contracts are publicly available, along with all modifications and previous versions as well as the associated changes in costs associated with the bid. [1] Not all modifications post award (ie change in beneficial owner) are publicly available alongside the original award enabling independent scrutiny of changes. [2] Therefore oversight agencies may receive limited information. Most low-dollar value (LDV) contracts [3] are not available online but may be disclosed in Access to Information and Privacy (ATIP) requests that can be made by members of the public for a modest fee. [4]

For consulting and professional service contracts, the contracting authority (CA) is responsible for monitoring the compliance with contractual obligations by contractors/bidders. The CA should appoint a procurement officer and the technical authority (TA) should appoint a project officer (who may be the same person), to be responsible and accountable for monitoring the work through: “regular physical progress and financial reports from the consultant or professional; attending progress meetings with the consultant or professional; examining the work in progress to ensure conformity with contract requirements; monitoring time, resource, cost and quality aspects of the work against a pre-determined and agreed work plan; amending the contract to reflect new requirements, work schedules and payment provisions in response to changing circumstances; conducting technical and financial audits; accepting or approving the work at intermediate stages and at completion; certifying all payments and following up to ensure timely payment.” On completion of a contract, the contracting authority should evaluate the work performed by the consultant of professional. “Evaluation reports should include: a general description of the work undertaken, its location and terms of reference, the quality of the work performed, the efficiency of the consultant or professional in managing time and resources, the capabilities of any outstanding specilists assigned to the work, and analysis of the cost of the work and the estimated value received and recommendations for further consideration.” If the contracting policy is ignored or if contracting practices or contract administration are not acceptable, the Treasury Board may direct that sanctions be imposed either on the CA, or the officials responsible. Sanctions may include any or all of the following: revocation of contracting authority or reduction of the dollar levels above which Treasury Board approval must be obtained, either for a specified project or program or for a specific period of time; establishment of special financial allotments within the funds allocated to the contracting authority which would limit spending to certain purposes or even require specific Treasury Board approval; instructions to the contracting authority to apply the sanctions in the personnel policies of the Government of Canada against individual employees who have ignored the contracting policy. [1] More clarity on government monitoring of subcontractor performance would be of public interest. The monitoring of a subcontractor’s work has come into question for an upfront contract provided to a Montreal company for personal protective equipment made in China at the onset of the COVID-19 pandemic. [2]

There is not enough evidence on enforcement to score this indicator. Breaches in contracts can result in the loss of or termination of the contract. [1] Furthermore, contracting authorities are permitted to consult their legal advisors to begin arbitration without the formal involvement of the Department of Justice or the Treasury Board Secretariat. [2] This process is then subject to Chapter VIII of the Commercial Arbitration Code. [3] Information on breaches of contract might be available (by email request) within Audit and evaluation reports at Public Services and Procurement Canada [4], however, it is not clear if possible breaches have been acted upon as several entities, including PSPC, are not listed as participating departments for public Access to Information and Privacy (ATIP) online request. [5]

There are formal rules to ensure that bidders and contractors that contract with public entities comply with their obligations on reporting and delivery. However, multiple regulations apply to the military and defence sector, and not all the elements listed above are covered. According to the Law on Administrative Contracts and Supply in the Public Sector (Law 19.886), each public entity must require the guarantees needed to ensure the seriousness of the offers submitted in public biddings (Art. 11) [1, 2]. Guarantees of seriousness must be explicated in the respective bidding rules. The heads of service will be directly responsible for the custody, maintenance and validity of the requested guarantees. However, as analysts indicate, these guarantees can vary according to the nature of the contract in question [3]. Institutions must also establish a methodology to evaluate the results of contracts and services acquired during the year. Contracts can be modified or annulled in cases of shared agreement, breaches of obligations by the contracting party, insolvency, public interest or national security, and other causes specified in the respective contracts (Art. 13). The legislation also specifies suspension and deletion of the registry of contractors for breach of obligations or other causes (Art. 17). However, there are several exceptions for the armed forces, which can develop their own registers of suppliers and contracting procedures outside the ChileCompra System (information system of purchases and contracting with the administration). The Special Regulation on Acquisitions and Disposals in the Armed Forces (Law 18.928, Decree 95) further specifies the requirements to contract with the armed forces in three modalities: public bidding, private bidding, and direct contracts [4, 5]. It indicates definitions about the stages and terms of tender processes, terms and conditions, delivery and opening of the offers, evaluation and awarding, and terms of duration. It includes a guarantee of the seriousness of the offer, which is charged by the entity if the service is not delivered within the indicated period. It must be noted that the new probity plan developed by the Ministry of National Defence (MDN) includes several components related to this process, including a review and strengthening of the procurement and acquisition process in the defence and armed forces sector [6].

Contracts are available for those acquisitions and procurement that goes through the System of Public Procurement ChileCompra [1, 2, 3, 4]. For each contract, it is possible to identify the unit that required the good or service, the supplier, the value of the contract, the state of progress of delivery, the lists of goods purchased, and other technical details. However, the same degree of transparency does not exist for operations and procedures that, broadly defined, are considered restricted under Article 436 of the Military Code of Justice. The use of this clause has limited the transparency and traceability of operations and has represented an obstacle for the work of oversight agencies [5]. Law 19.886, Article 12, states that “each institution shall establish a methodology to evaluate on a yearly basis the results of contracts it has executed, as well as the returns of assets and services it acquires” [6]. There is not enough information regarding how defence entities comply with this requirement specifically. As to contract modifications, it is worth noting that the ChileCompra software is cumbersome and not user-friendly. While the system offers tabs for “renewals and extensions,” as well as “connected contracts”, it is not always possible to download them, and it seems like uploads are not consistent from contract to contract.

There has been a critical evaluation of the monitoring systems and the extent to which officials in the defence sector regularly oversee contract completion. Two special parliamentary commissions have concluded that the Ministry of National Defence (MDN) must strengthen the processes of evaluation of projects and acquisitions, installing appropriate control systems for their adequate execution [1, 2, 3, 4]. Moreover, the last report highlighted that “almost seven years after the fraud [in the Army], the efforts made [in matters of control of acquisitions and procurement] have not been enough to be put an end to the broad and flexible provisions that govern the actions of the National Defence organs” (p. 153). Recently, the MDN has begun specifying the traceability of investment decrees associated with projects and strengthening the system of institutional control (SISCONI). However, there is no evidence that all the tasks and steps specified in the question are being implemented regularly, and the information is rarely made public on institutional websites.

More specific information is needed on the frequency of enforcement and whether external scrutiny is available if necessary to provide a score for this indicator. An online search – and interviews – revealed no further information on this subject [1, 2, 3]. As such, this indicator was marked ‘Not Enough Information’.

Articles 16-51 of the 2010 Weapons and Equipment Quality Management Regulations outline a process with various stages and controls, deadlines, reporting requirements, clear inspection instructions and mechanisms, and responsibilities of all parties involved in contract implementation. Articles 52-58 specify different types of contract violations and sanctioning procedures, including criminal investigations that may take place against a contractor. [1]

Apart from the legal framework, there is no publicly available information on reporting and delivery. The military procurement platforms post a project completion notice that provides no details on how the contract was implemented. [1]

The CCP has opened more military contracts to private contractors since 2016 [1] and relevant regulations have been enacted [2] but there is no transparency on contract implementation. Existing research suggests that the supervision of contractors is based on outdated bureaucratic methods and as such it is problematic. [3] It should be noted, however, that there have been some efforts to improve the supervision of contractors. [4]

Although relevant regulations are in place, there is no transparency in terms of contract implementation. As such, nothing is known about how breaches of contract are dealt with.

The defence sector has procedures and policies that allow contractors to fulfil their obligations which are outlined in the various contracting manuals, as legislated by several legal instruments: Resolution 1311 of 2006, [1] Contracting Manual of the Ministry of National Defence applied to the National Army; Resolution 6302 of 2014, [2] Contracting Manual of the Ministry of National Defence and its Executing Units; Resolution No. 00090 of 2018 amending the Police Contracting Manual. [3] These manuals have cover the supervision of contracts, including a) defining the characteristics and functions of the contract supervisor in the defence sector, Miliary Forces, and National Police; b) a definition of procedures for the exercise of supervision and/or monitoring contract execution; c) decision-making processes for irregularities that affect the development of the contract; d) a definition of the settlement process of the obligations contracted; and e) guidelines for the follow-up and monitoring in the technical-administrative and legal aspects. Other regulations that contribute to the contractual supervision process are Resolution 4519 of 2018, [4] which delegates some functions and powers related to the procurement of goods and services, the Anti-Corruption Statute, Art. 83, [5] which defines supervision categories. This article provides for so called contractual supervision and intervention whereby public entities are required to constantly monitor compliance by the contractor with the terms of the contract. Article 86 allows the state to punish those in breach by applying contractual penalties and sanctions, reiterated in the Ministry of Defence’s Contracting Manual, Chapter VI. [2]

To sanction the deficient or inadequate fulfilment of service, the supervisor, by means of a written report and based on facts, circumstances, and regulations, will inform the agency directly interested in the contract and to the contracting office. Directive No. 15 of 2015 establishes the profiles and years of seniority that supervisors must have. [6] These agencies will then initiate the corresponding actions in order to guarantee compliance with the contract. Internal control offices and the Inspector Generals of the Armed Forces can intervene in this process. The results of these investigations are entered into a virtual information management platform, and depending on the findings found, the results are forwarded to the different control entities such as the Prosecutors Office, the Attorney General’s Office, or the Comptroller’s Office, for punishment of the breach of a contract. [7]

With regard to transparency, it is clear that not all contracts are available to the public on the SECOP I platform, in particular contracts related to reserved expenses. However, according to Decree 1082 2015, [1] all public entities in the process of contracting must publish prior studies and documents on this platform; the notice of call; specifications or invitation; amendments; the offer; the evaluation report; the contract; and any other document related to contracting. Likewise Law 1712 of 2014, [2] establishes the obligation to publish all contracts made from public resources, therefore they are also obliged to publish contract execution reports, approvals, authorisations, requirements, or reports of the supervisor or the controller. [3] However, additional documents that support the contractual process after the contract is awarded are not always available. [4] Referring to the internal publication of the monitoring reports, the defence sector has an information management platform, where supervisors, internal control, and other units responsible for doing this action publish the results of their investigations. [5] It is the responsibility of the supervisors of the contracts to make these documents, though, so the quality varies. [6] Information provided to control bodies is not always available online due to the reserved nature of some of the information. [5, 7]

The supervisors of contracts in the defence sector are obliged to prepare reports of supervision and compliance with the contract. Directive No. 15 of 2015 defines the functions that the supervisor has, including the monthly presentation of reports on the execution of the contract and the partial receipt certificate and/or or final receipt that supports the payment of the obligations fulfilled by the contractor. [1] The Contracting Manual of the Ministry of Defence and the Military Forces provides standardised supervision and monitoring forms. [2] Supervisors can request reports, clarifications, and explanations on the development of the contractual execution, make recommendations to achieve the correct execution of the contract, hold meetings, form committees, and develop tools that facilitate the monitoring of contract execution. [3] Supervision includes administrative surveillance, technical surveillance, financial and accounting surveillance, and legal oversight. [2, 3, 4] Regarding measures for dissatisfaction or non-compliance with the contract, the contracting manuals define the actions that supervisors must carry out, including a generation of a report about the contract, including the contractual entity, the agency interested in the contract, and the contracting department of the Ministry of Defense; the request for the revision of the acts that it considers detrimental to the interests of the sector; and if irregularities exist, they can request contract suspension. [4] The Prosecutor’s Office, the Attorney General’s Office, and the Comptroller’s Office can take criminal and judicial actions regarding non-compliance or irregularities in the execution of a contract, while the internal control office facilitates information related to the event. [5]

The pecuniary criminal clause becomes effective when the procuring entity, the defence sector in this case, declares non-compliance with a contract. In the first case, the entity can apply the clause without appraisal the value of the damages, in the second case, if the damages are greater, the criminal clause can be executed, and the surplus recovered by other means. [1] This procedure is stipulated in Law 1150 of 2007, Article 17, [2] which defines due process in case of breach of a contract and stipulates criminal proceedings and Law 1474 of 2011, Article 86, [3] which defines the types of penalties: fines, penalties, and declarations of non-compliance. The defence sector procurement manual defines that the contract supervisor shall draw up a document setting out the background and analysis of the case. This document must be transferred to the contractor with a maximum of 3 working days to dispute them. [4, 5] The public entity shall enter into a hearing to discuss what happened, during which the head of the entity or its delegate shall present the factual circumstances that gave rise to the action, state the clauses possibly violated and the consequences, and subsequently the contractor shall submit its disclaimers. Having done the above and in development of the hearing, the entity will decide whether or not to impose the fine, sanction, or declaration of non-compliance. [3] It is not possible however, to assess whether these sanctions are enforced regularly and comprehensively when breaches of contract occur. As such, this indicator is not scored and is marked ‘Not Enough Information.’

There are some provisions in the 2009 Code of Public Procurement regarding the monitoring and evaluating of public contracts provide oversight of the performance of service suppliers. However, the provisions do not include the specific procedures to sanction a supplier for incomplete or inadequate delivery of services. Additionally, defence contracts that are considered a state secret are automatically exempted from these provisions whenever a tender requires strict confidentiality (Article 8 of the 2009 Code of Public Procurement).

The National Authority of Regulation of Public Contracts (ANRMP) is tasked with ensuring compliance with the general principles regulating public tenders, training public officials and carrying out audits, as per Article 15 of the 2009 Code of Public Procurement:

“Art. 15 – National Authority of Regulation of Public Contracts
The National Authority of Regulation of Public Contracts is tasked with: (1)
1. ensuring the application and respect of the general principles governing public contracts;
2. training actors in the fields of public procurement;
3. monitoring and ensuring the proper functioning of the public procurement information system;
4. conducting audits on public tenders.” (1).

Chapter 2 (Monitoring Contract Execution), Article 111, in the 2009 Code of Public Procurement provides for ways to ensure that contractors meet their obligations. But there is no mention of reporting and delivery.

“Art. 111 – Control of the execution
Every public contract is subject to supervision, control, monitoring and supervision of its administrative, technical and financial execution. These missions are carried out by the contracting authority, the contracting authority or the delegated contracting authority, the project manager, the structure tasked with the preparation and control of the budget… The general administrative clauses listed in Article 25 above set out the terms and conditions for supervision, control, monitoring and supervision of the execution of public contracts” (1).

Decree No. 2009-260 of 6 August 2009 on the organization and operations of the ANRMP (Portant Organisation et Fonctionnement de l’ANRMP) states in Article 4 that the ANRMP must keep the files of suppliers and service providers who have committed irregularities (2).

“Article 4: To carry out its missions, the National Authority for Regulation of Public Procurement has the following attributions:
• keep the file of contractors, suppliers and service providers who have committed irregularities in the awarding, execution of public contracts and public service delegation agreements or who are subject to a sanction” (2).

Reporting policies and delivery procedures for contractors (suppliers, vendors) are not covered in full detail in the 2009 Code of Public Procurement. There seems to be little post-control of supplies delivery (livraison de fournitures). information system;
4. conducting audits on public tenders.

Chapter 2 (Monitoring Contract Execution), Article 111, in the 2009 Code of Public Procurement provides for ways to ensure that contractors meet their obligations. But there is no mention of reporting and delivery.

Art. 111 – Control of the execution
Every public contract is subject to supervision, control, monitoring and supervision of its administrative, technical and financial execution. These missions are carried out by the contracting authority, the contracting authority or the delegated contracting authority, the project manager, the structure tasked with the preparation and control of the budget… The general administrative clauses listed in Article 25 above set out the terms and conditions for supervision, control, monitoring and supervision of the execution of public contracts.

In addition, Decree No. 2009-260 of 6 August 2009 on the organization and operations of the ANRMP (Portant Organisation et Fonctionnement de l’ANRMP) states in Article 4 that the ANRMP must keep the files of suppliers and service providers who have committed irregularities. (2)

Article 4: To carry out its missions, the National Authority for Regulation of Public Procurement has the following attributions:
• keep the file of contractors, suppliers and service providers who have committed irregularities in the awarding, execution of public contracts and public service delegation agreements or who are subject to a sanction; (2)

Reporting policies and delivery procedures for contractors (suppliers, vendors) are not covered in full detail in the 2009 Code of Public Procurement. There seems to be little post-control of supplies delivery (livraison de fournitures).

Neither the 2009 Code of Public Procurement nor Decree No. 2009-260 on the organization and operations of the ANRMP contain provisions for transparency in the reporting and delivery obligations of suppliers and service providers (1), (2).

For example, as shown in 67A, Chapter 2 (Monitoring Contract Execution), Article 111 of the 2009 Code of Public Procurement, fails to mention any provision regarding the public availability of contracts and their modifications throughout the procurement process (1).

“Art. 111 – Control of the execution
Every public contract is subject to supervision, control, monitoring and supervision of its administrative, technical and financial execution. These missions are carried out by the contracting authority, the contracting authority or the delegated contracting authority, the project manager, the structure tasked with the preparation and control of the budget… The general administrative clauses listed in Article 25 above set out the terms and conditions for supervision, control, monitoring and supervision of the execution of public contracts” (1).

Finally, for supplies and services provided for the Ministry of Defence that require strict confidentiality, any provisions of this nature are exempted as per Article 8 of the 2009 Code of Public Procurement (1).

At least some procurement units are drawing up contract monitoring and completion reports. However, there is no evidence of such monitoring for public tenders for the MoD that require confidentiality, as per Article 8 of the 2009 Code of Public Procurement. The ANRMP, through its commissions and oversight units (cellules), regulates the procurement process and, in theory, executes control before, during and after a contract has been executed, as per the 2009 Code of Public Procurement and Decree No. 2009-260 on the organization and operations of the ANRMP (1), (2). Given the confidentiality of the Ministry of Defence contracts, it is difficult to determine how effective the monitoring of supply and services contracts throughout the procurement process. The strict confidentiality of this type of contract may lead to informal methods of monitoring, and hence to heightened corruption risk. However, the fact that the ANRMP has a tab on its webpage with a red list of companies (Liste Rouge) that have been banned from applying for public tenders, shows that ARNRMP monitoring is moderately effective and may include at least some appraisals of suppliers and service providers (3).

The ANRMP acts on at least some of the perceived breaches of contract by suppliers and services providers, as shown by the red-listed companies on the ANRMP website. As of December 7, 2018, there were 17 companies on the ANRMP list of companies that are banned from submitting future applications for a public tender in Côte d’Ivoire (Liste Rouge). The full details of why the companies were red-listed and how they have been sanctioned are available in downloadable pdfs (Décision, Arrêté). The red-listed companies included, among others, the following:
• -Société Internat des Grands Travaux (IGTX)
• -PAPICI-TOP BURO
• -ICONCEPTS et EEPC
• -CCCI
• -ECPD et EUROBAT (1).

As in 64A, the WAEMU website also contains a page of litigation cases involving breaches of the 2009 Code of Public Procurement. Most of the 67 litigation cases reported by WAEMU are related to infrastructure. Only two of the 67 cases involved public tenders with the Ministry of Defense, including public tender No. F06/2014 regarding the installation of kitchens for the 2nd Infantry Battalion at Daloa (2). However, for defence contracts that are otherwise bound by strict confidentiality, as per Article 8 in the 2009 Code of Public Procurement, this type of enforcement is difficult to ascertain. Most cases of breaches of conduct are acted upon, which is not the case for Côte d’Ivoire.

There are formal policies and procedures that outline how to monitor, assess and report upon a supplier’s service and on delivery obligations [1]. When a supplier does not deliver on its obligations, the project leader is required to notify the DALO legal department and follow their advice and/or present it to the top management if further discussions are necessary [1]. The contractual standard terms of delivery (available on the DALO website) include sections on the contractor’s incomplete and/or inadequate service delivery, where examples of sanctions include cancellation of contract and fincancial compensation [2].

Information on tenders is available online at the online version of the Supplement to the Official Journal of the EU, Tenders Electronic Daily [1, 2]. This includes contract drafts but no actual contracts. Contract modifications post award are not available in TED[1]. The Danish National Audit Office can scrutinise contracts if they so choose and, according to the law, the auditors have access to all information they deem necessary [3].

All projects are monitored in detail on two dimensions. First, the project management itself is monitored and reported on to a steering group. Second, the financial and liquidity aspects are reported in status reports to the financial division and top management at least three times a year. Projects are closed with a completion report. Breaches of contract are instantly discovered and acted upon [1].

According to a DALO employee, breaches of contracts are adequately acted upon and policies and regulations are enforced in practice. When a supplier does not deliver on its obligations, the project leader is required to notify the DALO legal department and follow their advice and/or present it to the top management if further discussions is necessary [1].

There are some formal policies to ensure that contractors meet their obligations for delivery, but not necessarily reporting. For example, Article 51 of Public Authorities’ Contracts Law no. 182 of 2018 states that the public authority has the right to deduct from the deposit any losses from delays caused by the contractor. Additionally, Article 48 of the same law and article 84 of its executive regulation impose fines for delays in delivery even if a deadline extension is allowed (1). The law and its executive regulations also allow for cancelling the contract and keeping the deposit if the contractor violates any of their obligations.

On the government’s tenders portal (1), the flow of information regarding tenders stops once the tender is awarded. Therefore, it is difficult to access any information regarding the reporting and delivery obligations of contractors. This problem is further exacerbated when it comes to the defence sector as it enjoys much higher levels of secrecy. According to our sources, there is no transparency in reporting. In many cases, reports are written without even checking the deliveries or checking their quantities. Further, sometimes, the delivery is delayed and no reports on the delay or quality or quantity are written. Additionally, these reports are never published (2), (3), (4), (4).

There is no evidence in the relevant laws or media platforms of the existence of post-award reporting by procurement officials. According to our sources, there is no contract monitoring. The only report produced is the delivery report (1), (2), (3), (4).

According to Article 6 of the Tenders Law Executive Regulations and Article 85 of the Law no. 182 of 2018, each procurement department should keep a register of all the companies that are debarred from tenders (1). The governmental e-tenders portal publishes a list of the debarred companies (2). The power to debar certain companies lies with the General Authority for Government Services (GAGS), which is the body in charge of monitoring public procurements. The GAGS debarring takes place based on local decisions by government entities. This suggests that some level of enforcement is in place. However, the reasons for debarring are vague, and the decisions are usually not reasoned so it is difficult to determine whether the debarring was the result of breaches in the contract. According to our sources, breaches are rarely sanctioned, as most of the contractors have strong links to commanders or personnel within the MoD (1), (2), (3), (4).

There is no overall policy that covers public procurement contracts in Estonia. Specific conditions are stipulated in each individual contract. The contracts are written in accordance with the Law of Obligations Act, which lists different types of contracts that could be used both for public or private contracts. [1] Just like in the private sector, if the conditions in the public contract are not met by the supplier, the contractor has the right to impose sanctions based on the Law of Obligations Act. Therefore, there is no overall policy on how to monitor or assess a supplier’s service. However, the Public Procurement Act does cover which information has to be submitted to the E-Procurement Registry. [2] And therefore, it partly covers reporting procedures. After the end of the contract, the contracting authority has to submit information to the registry that includes whether there have been any breaches of contract. [3]

All the documents and contracts related to the procurement are submitted to the E-Procurement Registry. [1,2] The archive consists of projects that have been terminated and the documents related to the terminated project have to be published five years after the end of the project, as stipulated by the Riigihangete registri põhimäärus. [3] This, as explained, does not always occur. Appeals and any additional communication between the bidders and the contracting authority are published in the registry. The name of the company awarded the procurement is published. The content of the contracts are not public. There are cases in which the procurement documents do not have to be made publicly available. It is not always explained and not always clear when and in which case this has happened. The oversight institutions scrutinise the procedure, the quality of product and service delivery is evaluated by the contractor (e.g. The Defence Investment Centre), as stipulated by the Law of Obligations Act. [4]

As stipulated by the Law of Obligations Act, in case of breaches of contract, a party can withdraw from the contract [1]. The Ministry of Finance exercises state and administrative supervision over adherence to the Public Procurement Act and legislation adopted on the basis thereof, and carries out extrajudicial proceedings in misdemeanour cases in accordance with the rules and to the extent provided by law [2]. However, the quality of the work is assessed by the contractor. Monitoring and completion reports are based on each specific contract, therefore it could not be said that there is a regularity.

Action due to breaches is taken in the interests of the contractors, as stipulated by the contract. [1] There is no difference for public contracts and the quality of work must be evaluated by the contractor. There is no external entity for evaluating the quality. There is evidence that in some cases issues are referred to further external institutions, for example to the court [2] or the Ministry of Finance, or to the Appeal Committee. [3]

Alongside legislation, for example, the general terms of public procurement – goods (JYSE 2014 tavarat) and the general terms of public procurement – services (JYSE 2014 palvelut) provide e.g. the general requirements for goods and services, obligations of suppliers and procedures to be followed if the contract requirements are not met (more detailed terms than those in the respective legislation and less detailed terms than those possibly agreed on in particular contracts) – unless otherwise agreed in the contract or following from the nature of the acquisition. [1, 2, 3].

General terms also exist for e.g. ICT procurement and construction projects. Reporting procedures are organised within contracting units according to law and instructions of the Defence Forces and the Ministry of Defence. The Handbook of Government Procurements 2017 “describes in detail the most important implementation stages of the tendering process required by procurement legislation, as well as practical instructions on the implementation of procurements and agreements on procurements”. [4] It includes parts on monitoring, assessing and reporting on suppliers’ performance.

Contracts and their modifications are available in th Hilma-portal in a redacted format. [1] However, the oversight agencies have less restricted access to documents. According to the Act on Public Defence and Security Procurement, Chapter 14, Section 86: procurement documentation is publicly available as the Act on the Publicity of Authorities Activities (621/1999) states. [2,3].

The Act on State Civil Servants, Chapter 4, specifies the general obligations of civil servants [1]. Contract monitoring and reporting are included in the tasks of personnel assigned to respective positions. In addition, each state agency and institution is obliged to organise internal auditing and compliance, which aims to ensure e.g. that the state’s funds are used purposefully. [2]

The Handbook of Government Procurements 2017 states that a contracting unit must monitor the fulfilment of procurement contracts. A good or a service has to be marked as received in an information system or to a respective document. The contracting unit must inform the supplier about faults in delivery or billing as well as monitor and ensure that faults are dealt with adequtely. [3] Section VI of the Handbook deals with contract management and billing in detail.

If contract is not fulfilled, it includes stipulations as to penalties. A high-profile example includes the Air Force spy plane, which was delivered 4 years late [4]. Compensation was negotiated with supplier, but no details of compensation were made public.

Breaches of contract are acted upon as legislation, state level guidance, internal instructions and other relavant guidance required. There are no media reports on major failures in doing so.

There is training for Ministry of the Armed Forces (MOAF) staff on how to monitor, assess and report on public procurement and outsourcing, [1] provided by the Ministry of Defence Management training Center (CFMD). Apart from this training, the formal policies and procedures are those in place in the existing legislation: the “Sapin 2” law, [2] Order n°2015-899 [3] and Decree n°2016-361. [4] This legislation does not provide further details on the resolution or sanctioning procedures for incomplete or inadequate service delivery. There is some evidence that the Ministry’s agreements include contractual clauses on performance monitoring and dispute settlement, [5] but a formal policy or procedure outlining this could not be identified in the public domain.

Information on armament contracts is rarely released. An interviewee [1] explained that contracts offered by the MOAF do not need to be publicised. The Ministry sends the market information to 5 or 6 companies of its choice and these companies can then submit offers. But nowhere in the process are the Ministry or the companies compelled to disclose any information, let alone on contract failures and modifications post-award.
Information on tenders and contracts of a non-sensitive, non-strategic nature (such as civilian use supplies, works and services) is published on the websites of the Ministry of the Economy, Finance and Recovery and the Ministry of the Armed Forces. [2] [3] This includes contract amendments.
Oversight agencies such as the Cour des comptes can receive information on armament contracts, upon request (for example during investigations). It did so in January 2019, when auditing the outsourcing process of the French army, specifically within the framework of the Barkhane operation in the Sahel. [4] The Cour denounced a deleterious climate between the service providers, anomalies in the execution of the contracts, and faulty traceability in the payments made by the army. It criticised the procurement process reserved for a handful of companies who operate outside of any scrutiny.

Procurement offices do not conduct reporting and delivery obligations. Contracts awarded by the MOAF can be handled outside of the general legal framework for public procurement. Specific rules apply to defence and security tenders (Decree n°2016-361 of March 25, 2016 [1]), allowing non-competitive and “non-publicised” (ie confidential) bidding.

There is some evidence of monitoring based on training that procurement officials receive in this area. [2] The Public Order Code (“Code de la commande publique”), [3] which applies to MOAF procurements, includes provisions to terminate a contract when performance cannot be continued without a significant modification. There is some evidence that performance monitoring committees are assigned to track progress and performance, [4] but further information on this could not be found in the public domain.

An interviewee’s investigative work into defence subcontractors in aerial transport [5] showed that the contracts between sub-contractors and high-ranking officers in charge of procurement at the MOAF have been done without any external scrutiny. This was corroborated by the recent Cour des comptes report, [6] denouncing “anomalies” in the signature and execution of contracts, faulty traceability in the payments made by the army, impediments to equal treatment of candidates, “weak monitoring” of contracts, “serious security risks” on Russian Mi-8 chartered helicopters, and even “threats and intimidation” aimed at the military in charge of the purchases.

The recent Barkhane operation mismanagement of subcontracting deals by the MOAF illustrates this lack of reporting policies and procedures. [7] [8]
> Potential harmful negligence in the selection of unverified subcontractors by the MOAF
> Companies which have been convicted of corruption have still been able to work as subcontractors for the French army for logistics support in the Sahel, on the Barkhane operation: “Panh, like Expedition Aviation, never deals directly with the “Barkhane” Commissariat or with the French Ministry of the Armed Forces […] but with “the French logistics subsidiary of the Canadian group SNC-Lavalin” […] Despite its registration in 2013, for ten years, on the World Bank’s black list after the discovery of corruption cases, SNC-Lavalin won the market in early 2016, without detailing either the origin or the operator of the devices.”

The way subcontractors are handled is opaque to the extent that it is difficult to determine whether breaches of contract are acted upon or not. However, the recent Barkhane operation mismanagement of subcontracting deals by the MOAF, [1] [2] the ICS case [3] and the details given by the Cour des comptes in its recent assessment of how outsourcing is being handled in Opex [4] seem to demonstrate that if competitors (who are the only ones aware of the terms of the contracts) do not denounce fraudulent behaviours to the judicial authority or the press, the Ministry itself doesn’t have the means to act upon any sort of misbehaviour.

There are formal policies and procedures that outline how to monitor, assess and report upon a supplier’s service and or delivery obligations. These include resolution or sanctioning procedures for incomplete or inadequate service delivery. For example, via the digitally supported monitoring of deadlines for the contractually agreed services and times (milestones). In the event of non-performance or poor performance, the ‘Bürgerliches Gesetzbuch (German Civil Code) (BGB) [1] or the respective contractual agreement applies. The Additional Contractual Terms of the Federal Ministry of Defence regarding the Contract for Services Part B (ZVB/BMVg) contain, for example, the right of the client to inform themselves about the execution of contractually agreed services. In the event of non-performance or poor performance, further procedure in individual cases is the responsibility of the respective contract holder [2,3].

The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) is responsible for all defence procurement [4]. The tasks of the BAAINBw staff regarding the reporting and delivery of defence contractors are specifically defined in the Customer Product Management (CPM), for example, in Article 2.2.4 ‘Integrierte Nachweisführung’ (Integrated Compliance Demonstration). According to these guidelines, the project manager is responsible for the collection of the reports. The CPM also stresses the importance of project management and project management accounting (the in-house management tools for monitoring/assessing the process). Additionally, the Government Quality Assurance is used to check that the contract is performed in compliance with the contractor. The CPM and the management tools are subject to internal training [5].

Some contracts are publicly available including modifications post award (e.g. change of subcontractor, change of beneficial owner, additional costs such as a consultant), which are publicly available alongside the original contract award, enabling scrutiny and oversight of changes [1,2]. However, the details of some contracts may be kept secret if the client thinks that ‘disclosure would be contrary to the public interest or impede in particular defence or security interests’ (see Section 35, Paragraph 2 of the VSVgV). Section 6, Paragraph 1 of the VSVgV also states that ‘Clients, applicants, bidders and contractors must mutually maintain the confidentiality of all information and documents’. Section 7 of the same regulation provides further details on the requirements for the protection of classified information by companies [3]. As a result, oversight agencies receive limited information that would enable them to scrutinise the quality of product and service delivery. Information on contract failures and modifications is rarely made publicly available. Freedom of information laws typically do not apply [4].

Officials regularly produce contract monitoring and completion reports. These include supplier and subcontractor performance appraisals, which are separately verified. If the contract was not sufficiently completed, action is taken for breach of contract [1].

The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) is responsible for all defence procurement [2]. The tasks of the BAAINBw staff regarding the reporting and delivery of defence contractors are specifically defined in the Customer Product Management (CPM), for example, in Article 2.2.4 ‘Integrierte Nachweisführung’ (Integrated Compliance Demonstration) [1]. According to these guidelines, the project manager is responsible for the collection of the reports. The CPM also stresses the importance of project management and project management accounting (the in-house management tools for monitoring/assessing the process). Additionally, the Government Quality Assurance is used to check that the contract is performed in compliance with the contractor. The CPM and the management tools are subject to internal training.

According to the CPM (No. 239), the project manager, with the assistance of the Integrated Project Team (IPT), monitors the provision of the contractually agreed supplies/services and takes action if the objectives specified in the agreement are not fulfilled. According to the CPM (No. 230), the project manager shall take appropriate measures to ensure the implementation of a project within the specified framework regarding performance, time and cost. Actions must be guided by the principles of efficiency and economy. During the realisation phase, the IPT must consider knowledge gained and lessons learned from in-service use. All breaches of contract are adequately acted upon. Issues are either dealt with internally or raised with higher management in the ministry. If issues are not resolved, they are referred e.g. to the Federal Audit Office and Defence Committee for further external scrutiny [1].

However, though there are no examples of a lack of enforcement, the monopolist nature of the defence industry could undermine enforcement of anti-corruption rules. As TI-DS has highlighted, in the current market, suppliers can potentially become ‘too big to fail’ and wield a disproportionate amount of market power [2]. In Germany, the BMVg itself admitted the resulting powerlessness. In response to a parliamentary inquiry into what contractual penalties the BMVg had included in the procurement agreement with Rheinmetall and Krauss-Wegmann Maffei for the severely delayed Puma (a mechanised infantry combat vehicle), the BMVg stated that ‘Contractual penalties are not included in the procurement contract [of the Puma] as, due to the monopoly position of the contractor, these were not enforceable during contract negotiations’ [3].

Generally, there are fairly strict policies and regulations; but the greatest challenge lies in the lack of strict enforcement (1), (2). The PPA does elaborate and explain how procurement boards and the procuring authorities are obliged to assess and report on tendered services.

The DTC is supposed to carry out a capabilities check before awarding the tender. The PPA has also tried to improve staff capabilities through new training manuals on contract management (3), (4).

Particularly from the perspective of the media and CSOs, information on hardware contracts is rarely released, particularly on contract failures and modifications post-award. In other words, oversight agencies receive limited information. The challenges that result due to a lack of detailed information is even more acute in the case of opposition Members of Parliament (1), (2), (3), (4).

The bulk of information that relates to contract changes and alterations appears to come largely from international media or contracting organisations (i.e. Airbus and the contract for C295 aircraft). This is not made publicly available in Ghana and is often only reported on through paid-for premium services (Jane’s, Military Balance, etc.).

Officials regularly produce contract monitoring and completion reports, and these include supplier and subcontractors performance appraisals. However, if these contracts are to supply hardware and the supplier(s) have strong political support and the backing and or interest of generals, the extent to which actions are taken for breaches of contract are limited (1), (2), (3).

Few breaches of contract are acted upon because of interference from a conflict of interest between some corrupt politicians, and some high ranking and corrupt generals (1), (2).

There are formal policies and procedures that outline how to monitor, assess and report upon a supplier’s service and delivery obligations in laws 3433/2006, 3883/2010, 3978/2011 and 4407/2016. These include resolution or sanctioning procedures for incomplete or inadequate service delivery [1]. For example, Article 108 of Law 3978/2011 states that “the Directorate-General for Defence Equipment and Investments’ (GDAEE) mission is to carry out the necessary procedures for the conclusion of procurement and services contracts in the field of defence; conclusion of research and development contracts; conclusion of contracts for the sale of military equipment; certification of compliance of new products with standardisation agreements; standardisation and codification of military equipment and for the state quality assurance, as well as for the monitoring of the implementation of the measures of the National Defence Industrial Strategy” [2, 3].

Contract modifications post award are not usually publicly available. Such modifications could include many sub-contractor-related changes, as well as additional costs. The amendment contracts are usually also subject to the control of their legality by the Court of Auditors [1]. It largely depends on the MoD whether or not this information would reach oversight agencies [2].

Officials regularly produce contract monitoring and completion reports. These include suppliers’ and subcontractors’ performance appraisals, which are separately verified. If contracts are not sufficiently completed then action is taken for breach of contract [1, 2].

Most breaches of contract are adequately acted upon. Such issues are either dealt with internally or raised with the top leadership in the ministry. If not resolved, such issues are referred for further external scrutiny by an independent audit agency [1, 2]. This is a decision usually made by the minister or the deputy minister. An example is the case of the French NH-90 helicopters, which the MoD refused to acquire for years because there was a breach of contract [3].

The Public Procurement Authority prepared detailed guides [1] for public procurement officials on how to monitor, assess and report upon a supplier’s service and or delivery obligations. The assessment is regulated by the Procurement Law (2015. évi CXLIII.) [2] and in the 308/2015. Government Order [3], stating that the Procurement Authority’s obligation is to create a yearly assessment plan and conduct reports according to that [4]. The ad hoc notifications also must be investigated by the Authority, an Arbitration Committee decides in the cases and forwards them (if necessary) to the appropriate court. According to XXX/2016 Law on Defence and Security Related Procurements [5], the committee investigates and decides in defence procurement cases as well. In defence matters, all operative defence organisation must have a yearly assessment plan in the framework of the internal operative control system according to the 308/2015 Governmental Order.

When there has been a public procurement the information is available on the relevant websites [1, 2]. Procurements can be searched by individuals seeking for the procurements at the website of the Procurement Agency most of the winners, changes, modifications, among other things are posted [3]. All documents related to the procurement process can be found on the website of the agency. However, this is only the case for the contracts falling under public procurement. Major contracts are not listed and are not transparent at all. Further, contract modifications regarding major procurements are not published openly.

According to the Law on Public Procurement, the contracting authority shall internally audit the procurement procedures. When reporting on the delivery of obligations, the relevant legal document is the 76/2017. (XII. 29). The Ministry of Defence (MoD) Instruction [1] on the procedures of procurement by defence organisations that provides a detailed description of the tasks and responsibilities of the main stakeholders. While the political responsibility is at the Deputy State Secretary for Defence Economy, the professional responsibility is at the Defence Agency. According to source 6, the mechanisms are not developed [2]. It was not possible to evaluate this in-depth, as no information is available on the relevant website.

Although transparency is minimal some information was gathered through interviews. Based on the responses it is clear that when it comes politically neutral contracts or bigger foreign procurements, the ministry requires compensation for the breaches of the contract or failures under a guaranteed time period (as was the case with the Gripen jet malfunction or Kongsberg URH radios) [3]. However, this was not the case with certain cases [2]. In smaller procurement cases, the MoD and organisations regularly seek a legal solution at the Arbitration Committee [5].

The DPP-2016 lays out procedures for contract and post-contract management. The concerned Service Head Quarter (SHQ) is entrusted with contract management and administration. The Ministry of Defence (MoD) Acquisition Wing is entrusted with post-contract monitoring.

It is stated that:

“(a) Simple Projects. Projects involving one time off the shelf buys, without any design and development, shall be reviewed by the Acquisition Manager/equivalent service officer in the SHQ.

(b) Complex Projects. Projects which require design, development and testing in consultation with the users, with likely ToT and have enlarged scope in terms of basic
complexities, depth of design and development and consideration of a large number of participants, would be reviewed by a steering committee headed by DG (Acquisition) in the MoD or Principal Staff Officer (PSO) at SHQ, with members from MoD, MoD (Fin), Defence Research and Development Organisation (DRDO), Department of Defence Production (DDP) and SHQ. In such cases, the Acquisition Wing will submit quarterly Contract Implementation Reports
(CIR) to the DPB.

95. Equipment Induction Cells (EICs). EICs will be raised for major projects on a caseto-case basis in SHQ at the discretion of SHQ. The EICs will deal with the induction of major
equipment and help in planning the requirement of facilities essential for the serviceability and maintainability aspect of that acquisition.

95(a) In the event of the Seller’s failure to submit the Bonds/ Guarantees/Documents or/and supply/ perform the items/services as per Delivery schedule specified in the contract, the Buyer may, at his discretion, withhold any payment until the completion of the contract. The Buyer may also deduct LD as per Para 6 of Appendix L to Schedule I of Chapter II.
(b) In cases where Seller offers to carry out upgradation/ alteration in the specifications of equipment as concluded in the contract, imposition of LD Clause will be as per Guidelines at Appendix J of Chapter II.” In the case of Indigenous Content (IC), Performance-cum-Warranty Bank Guarantee shall also be forfeited upon failure to discharge IC obligations as per the contract.

The DPP has provisions on Commercial Clauses and Standard Clauses of the Contract that address delivery obligations [1][2].

There is not much information publicly available pertaining to contract failures and modifications. There are a few reports in the media such as the on-off-on deal with Israel for Spike missiles [1][2]. These rarely contain contractual insights such as reasons for delay and defaults.

There are elements of monitoring. The Acquisition Wing submits quarterly Contract Implementation Reports (CIR) to the DPB [1]. The MoD at any stage/tier of production can request for an audit. As per the DPP, the MoD’s procurement procedures stipulate stern action against bidders’ non-fulfilment/performance of contract provisions. Provisions include Liquidated Damages (LD) and in extreme cases- cancellation of the contract [2].

It was reported in 2018 that MoD has begun to build IT systems that would help streamline procurement and enable quicker decision-making [3].

There is strong evidence of enforcement in cases of corrupt practices and failure to meet offset obligations [1][2]. The deficiency seems to lay in the timely fulfilment of obligations on delivery by contractors. Resolution or sanctioning procedures for incomplete or inadequate service delivery though in existence, are not effectively carried out. In a January 2019 report from the Standing Committee on Defence, it was stated by the Committee that it observed delays in projects referencing the DRDO and went on to state in Recommendation (Para No. 21 ):

“… accountability has to be bestowed at some level for the continued delays. Such a dismal scenario cannot be allowed to go on perpetually and wastage of resources cannot be taken for granted as a routine phenomenon. The Committee have also
been informed that various measures are being taken to curb delays that are a regular feature. However, the Committee would like to emphasise that the efforts should bear the desired results. Therefore, an inherent system needs to be developed where specific roles and responsibilities are demarcated and specified within the organizational structure of DRDO. The progress made in the direction may be brought to the knowledge of the Committee.”

The government replied stating that and concluded:

“…It is submitted that, it is difficult to fix accountability solely on DRDO as our projects are dependent on number of external agencies including Users, Production/QA agencies, Certification agencies etc.” [3]

Delays in delivery seem to be endemic; this could be attributed to complexity of procurement procedures exhaustively outlined in the DPP and bureaucracy [4][5][6]. Purchases made through IGAs seems to have faster delivery and are the preferred route [7]. Examples of speedy delivery include M777A2 Ultra Lightweight Howitzers where the deal was signed in 2016 and delivery received in 2018; and the Dassault Rafale fighter jets where the new deal was signed in 2016 and delivery of the first jet will be shortly, in October 2019 followed by additional jets in May 2020 [8][9].

Enforcement mechanisms for reporting and delivery do exist through a number of contractual provisions such as LD, Performance Bank Guarantee, Pre-Dispatch Inspection, suspension and blacklisting [10]. The full extent of enforcement on defaulting on timely delivery is unclear.

Articles 58-59 of Minister of Defence Regulation No. 17/2014 stipulates procedures for checking and receiving work results [1], covering the implementation of functional tests in accordance with the protocol test stipulated in the contract, as well as the process of ensuring the specifications are consistent with the provisions in the contract, visually, in number and in completeness, and that the accompanying certificates are provided as stipulated in the contract. Inspection and receipt reports are submitted to the PPK. Article 66 of the same regulation states that providers who cannot complete the work agreed in the contract will be subject to sanctions in the form of administrative sanctions, blacklisting (resulting in debarment from any public procurement within a certain period), civil lawsuits and/or criminal reporting [1]. Moreover, according to Article 67, providers who are late in completing work within the period specified in the contract will be subject to a delay fee amounting to 1/1000 (one thousandth) of the contract price for each day of the delay. However, this fee does not exceed the performance bond [1].

Not all procurement contracts are open to public scrutiny because they are considered state secrets under the category of defence equipment and its supporting facilities, as regulated (though rather implicitly; for more information see indicator 38B) in Minister of Defence Regulation No. 2/2015 [1]. Supervision takes the form of a pre-audit before the signing of contract, as mandated in Minister of Defence Regulation No. 17/2014 [2]. Meanwhile, in police procurement, the supervision and control of the post-contract procurement process falls under the authority of the PPK, who reports to the PA (see Article 42 of Chief of Police Regulation No. 10/2015) [3]. Audits through monitoring and routine checking, as well as audits with a specific purpose, can also be conducted through police operation supervision (wasops), supervision and examination of non-tax revenue (wasrik PNBP), special supervision and examination (wasriksus) and verification (see Article 45 of Chief of Police Regulation No. 10/2015) [3]. Post-award modifications can be made if there are any differences between field/actual conditions and the drawings and/or technical specifications/TORs specified in the contract documents at the time of implementation. The PPK, together with the provider, can make contract changes, including increasing/reducing volumes, increasing/reducing types of activities, changing technical specifications in accordance with field conditions and changing the implementation schedule [4]. The PPK keeps and maintains the integrity of all contract documents, including amendments, and reports them to the PA (Minister of defence / Head of Police). Contract addendums on post-award modifications are also reported to the internal auditor and become one of aspects that must be examined in the supervision and inspection (wasrik) of arms procurement [5].

Minister of Defence Regulation No. 17/2014 obliges the PPK to deliver reports on the progress of arms procurement processes, including the disbursement of the budget and any obstacles to implementing its work, to the PA/KPA every three months. In monitoring this trimester, the PPK is authorised to unilaterally terminate the contract if the provider neglects/breaches/violates the contract and does not correct this negligence within the required period of time [1]. Meanwhile, the internal auditor of the Ministry of Defence oversees the procurement process periodically, based on a schedule that is determined in the current fiscal year and/or based on the orders of the Inspector General or Minister of Defence. The internal auditor carries out supervision and inspections of the procurement in stages (pre-audit, during audit, and post-audit) and coordinates the audit plan with the object of inspection (the Procurement Committee) [2]. The supervision activities carried out by the PPK and internal auditors do not cover the selection of suppliers/subcontractors, as that falls under the authority of the provider/tender winner, as long as the provider fulfils all the requirements stated in the contract. However, the provider is still prohibited from handing over his main work to a subcontractor [1].

Generally speaking, all violations of arms procurement contracts are handled internally, through a sanction mechanism in accordance with Minister of Defence Regulation No. 17/2014 [1]. These sanctions have been imposed on both domestic and foreign companies. For example, PT DI was charged a fine of 8.5 billion rupiahs for the late delivery of NAS332 helicopters to the Indonesian Air Force [3].

There are no known formal policies or procedures that outline how to monitor, assess and report upon a supplier’s service and delivery obligations [1, 2].

Information is occasionally released on contract failures with international suppliers [1]. For example, Ali Akbar Salehi, head of Iran’s nuclear agency, in relation to the Arak Heavy Water Reactor, was quoted by the state-run news agency, Islamic Republic News Agency (IRNA) as saying that “the Chinese side decreased the speed of cooperation with us despite their commitments” [1].
However, contract modifications post award are not usually made publicly available.

There is little information publicly available about procurement offices and reporting and delivery obligations. The State Purchasing Organisation is reported as facilitating weapons imports and as being a subsidiary of the Ministry of Defence (MoD) [1]; no information about reporting and delivery obligations are available on the website found [2]. The website states it is in the history section its affiliation to the Ministry of Commerce.

Breaches of a contract with international suppliers are often acted upon. For example, Russia and Iran signed a contract for the delivery of five S-300 batteries in 2007. But in autumn 2010, Russia’s then-president Dmitry Medvedev banned the supply of the systems to Tehran amid escalating sanctions against Iran’s nuclear program. The contract, worth more than $800 million, was annulled and the advance payment returned to the Iranians. However, Iran lodged a complaint with the International Court of Arbitration asking for $4b in compensation [1]. Iran also took a case to the Paris-based International Chamber of Commerce over hundreds of Chieftain tanks Tehran bought from the UK in 1976 but never received [2]. However, no information is made publicly available about contracting with domestic defence companies on behalf of the MoD, nor for smaller pieces of defence equipment. Therefore, there is no evidence to indicate breaches of contract in this regard.

In Iraqi law, certified chartered accountants are obliged to audit the activities and accounts of the contractor, which is intended to shed light on the progress of their contractual duties. General inspectors across Iraq’s ministries reserve full and unrestricted access to government offices and can exert pressure upon procurement staff to report on irregularities and the contractor’s performance under the signed contract (1). The obligation to provide reports is codified within Iraqi laws; however, the regulatory and quality of report findings throughout every stage of the procurement process is unquantifiable in the absence of reliable data. Companies conducting business in Iraq often suffer long delays in payment which further suggests that the existence of weak mechanisms that cannot ensure reporting and delivery obligations are met (2). Formal policies and procedures exist, depsite patchy implementation.

As Iraq’s Companies Law stipulates (Article 17), services and contracts must undergo an extensive study to assess both practical and technical feasibility (1). Approval must emanate from not a single but multiple officials in the state. There is no explicit reference to reporting responsibilities or periodic training to boost the competency of procurement staff on reporting and delivery (2). The problem of defence contractor fraud is brought into focus in a study published in 2015 (1) which underlines that Iraq’s government ‘plays a deciding role’ due to ‘lackadaisical oversight and auditing’. An auditor (3) interviewed for the assessment corroborates this further; “low and middle-management lack operational currency and rarely address ways to avert risk as it’s up to the minister in charge”. In the context of US-Iraqi defence cooperation, ‘mismatched regulations’ ‘and little enforcement’ stand out a consistent issue (4). In the absence of evidence of reporting and deliverance mechanisms, a higher score cannot be supported.

The abovementioned laws emphasise the need for approval from competent authorities and the specialised committee that reviews the projects and firm. There was little evidence as far as existing laws are concerned, of a procurement management team that reports or tracks difference stages of delivery, concerning defence contractors (1).

It is not entirely clear if breaches of contract are acted upon, but evidence found endemic corruption and wanton disregard of procurement rules (1). In one instance, the invalidity of a contract awarded to a British firm to construct Karbala International Airport was brought to the attention of the Prime Minister’s Office and, investigated by the COI. However, no official investigation resulted in legal action or contract termination. The involvement of non-official entities such as religious brokers as the $500 mn Karbala airport deal demonstrates, blurs the lines of authority which, makes enforcement or intervention from Baghdad the less likely. Effectiveness of enforcement is questionable furthermore in light of the conduct of public officials that lack substantial knowledge of procurement procedures and frequently engage in bribery and kickbacks. As one source notes “officials in all ministries and agencies do not have sufficient experience with a federal and decentralized system and how it really works” (2, p.109). There have never been any prosecutions against any of the officials implicated in the above-mentioned case and many others. The score awarded here has been chosen on this basis.

Formal policies and procedures exist that outline how to monitor, assess and report upon a supplier’s service and or delivery obligations. They include resolution or sanctioning procedures for incomplete or inadequate service delivery and the MoD requires suppliers to pay arrears compensation should the procurement be delayed. In the contract themselves provisions are included that stipulate that payments to suppliers are only made once the terms have been fulfilled (1) (2) (3) (4). Each supplier signs an order which contains instructions and terms of engagement that apply in all of the MOD’s procurement. These include rules regarding situations of delay in supply and violations of contractual obligations and mechanisms for fines and suspension (5). A supplier who does not meet the requirements, as specified in the recognised suppliers’ regulations, may be suspended for a fixed period or permanently in accordance with the decision of the competent committee (6).

Most of the tenders are mostly published online (1) (2) (3) (4) (5). Contract modifications post award are made in accordance with article16 of the General Tender Terms (6) and such modifications are not made publicly available (7). Oversight agencies receive limited information that would enable them to scrutinise quality of product and service delivery.

According to the laws and regulations, officials regularly produce contract monitoring and completion reports (2) (3) (4). These include supplier and subcontractors performance appraisals, that is separately verified. If the contract was not sufficiently completed, action is taken for breach of contract (1) (2) (3) (4) (5).

This indicator is marked ‘Not Enough Information’ as there is not enough evidence to score accurately. It is unclear if breaches of contract are systematically acted upon. Though there are formal provisions for sanctions as stipulated by the MoD (1) (2), there is little evidence of suppliers being penalised for breaches of contract in the defence sector. The only evidence available is anecdotal and relayed in media stories about suppliers being suspended for breaching terms or corruption-related infringements (3). While this points to a certain degree of enforcement it is not clear to what extent this is systematic.

According to the national Code for public procurement, legislative decree n. 50/2016, all contracts shall ensure the right performance of the service/provision of the product [1]. To this end (art.31 legislative decree 50/2016) a single procedural officer is nominated by the competent contracting authority, to monitor all phases of the contract. The Code also foresees the possibility for the Ministry of Defence to nominate a procedural officer for each phases of the contract (art. 159).
Moreover, article 113 bis of the code specifies the penalties the company incurs in case of delays, that can be from a 0.3 per thousand to 1 per thousand of the entire value of the contract per day of delay. These penalties cannot exceed the total of 10per cent of the contract value.

In case of inadequate work, or breach of the integrity pact [2], there can be a resolution of the contract.

On the website of the contracting authorities it is possible to access information on contracts [1]. For contracts exceeding the value of 1 milion euro it is possible to access a wider range of information, including post award modifications [2]. Nonetheless, it is not possible to assess if the available information refers to the totality of contract. According to the report of the Court of Auditors on the management of purchases by the Ministry of Defence, there has been no renegotiations of the contents and terms of the offer after the award procedure and the signing of the contract over the period 2014-2017 [3].

According to a report of the Court of Auditors [1] on the public procurement of the Ministry of Defence, monitoring activities on the good performance of the contract are carried out by a sole, or group of, commissioner(s), and in conformity to Decree of the President of the Republic 236/2012 [2] regulating the activities of the Ministry of Defence on furniture, services and good supply. Monitoring activities are carried out also on subcontractors and suppliers, whose work and quality need to satisfy determined standards [3]. At the end of the monitoring activities a report is compiled. In case of serious irregularities there have been cases of termination of the contract [4] [5]. On the website of the Ministry of Defence it is possible to access the annual overview on the financial management of the contracts, in a tabular format [6]. On the website of the national anticorruption agency is possible to access information on the outcome of the monitoring procedures for all public contracts of the public administration. Data is presented in tabular format [7].

In the period of investigation of the Court of Auditors over the management of public contracts of the Ministry of Defence, 14 cases of breach of contract are reported. These cases refer to impossibility to deliver the product (2 cases) and contractual mismanagement from the selected company (12 cases). Penalties are reported to have been applied in case of minor misconducts. there have also been cases of appeal to the pertinent Administrative court of first and second level of judgement [2].

Formal policies and procedures for monitoring and assessing a supplier’s service and delivery obligations are described in the Acquisition, Technology & Logistics Agency (ATLA)’s “An outline of central procurement”. These policies and procedures are followed for both central and regional procurement from domestic producers. Monitoring and inspection are ordinarily done by an official from ATLA or a Regional Defence Bureau. Monitoring can take place through on-site inspections or by controlling that the components and products meet ISO or DSP quality standards or that the company has been certified as a manufacturer of high-quality products. [1] Discretionary contracts are monitored by on-site inspections to see whether the cost data that the enterprise has submitted are correct. A university professor who has published on Japanese defence procurement said in an interview: “There is a lot of defence equipment that only one enterprise in the world can make, and when determining the price of such goods, price cannot be determined by competition, and it has to be based on cost – that is how the contract is determined. For a portion of the contracts, there is an arrangement whereby cost inspection is done to assess whether the reported cost is appropriate.” [2] When the product has been produced, a completion test at the factory examines whether it meets the requirements in the contract, product specifications, etc. A receipt inspection is done when the product is received by the unit that will use it. [1] The “Guidance on Bidding and Contract” describes how producers may have to pay penalties if their delivery is delayed and how the price may be reduced if their product does not meet the terms of the product specifications and the contract. [3] Although “An outline of central procurement” and “Guidance on Biding and Contract” do not mention a duty to report, there are good grounds to believe that internal rules include such a duty for domestic procurement, as the Board of Audit’s “Investigation of procurement of defence equipment through FMS” discusses reports that are to be written at specific stages of the process of procuring arms from the US. [4] Foreign Military Sales (FMS) are US arms sales for profit to friendly states and are regulated by the US Arms Export Control Act. Sales to Japan take place within the scope of the Japan-US Mutual Defence Assistance Agreement. Such sales follow formal procedures determined by the United States. [5] Under an FMS contract, the US Government sells defence equipment produced by US companies to the Government of Japan (central procurement) or one of the branches of the Self-Defence Force (SDF) (regional procurement). The Board of Audit discussed only Japanese efforts to monitor this production that were directed at the US Government in a report from 2019, [4] and no cases of Japanese monitoring of US enterprises were found in a search of the homepages of the Japanese MOD [6] or the mainstream national newspapers Asahi Shimbun [7] or Yomiuri Shimbun. [8] The MOD raised the issues of delayed delivery and delayed repayment of advance payment for defence equipment. This was done by sending FMS liaison officers to the US and holding joint working group meetings about these topics for ATLA and the US Defence Security Cooperation Agency, which is in charge of FMS, attended by the heads of these two institutions. [10] In principle, FMS products that are ready for delivery are inspected by the US military at an arms factory or similar place in the US and handed over to a transportation agent. The Japanese SDF unit then inspects the product upon receipt. [11] If any fault was found in the receipt inspection, Japan would quickly report this to the US side. [12]

Contracts are available on the websites of ATLA (for central procurement) [1] and of procuring institutions under the Regional Defence Bureaus (for regional procurement). [2] Chapter 6 of the “Guidance on Bidding and Contract” contains details about how to report a change in a contract. [3] However, no examples of announcement of changes of sub-contractor, beneficial owner or additional costs in the contracts were found. Nevertheless, the Regional Defence Bureaus of Japan sometimes make new calls for bids after changes to a tender. [4] No statistics or announcements of contract failures on the webpages for announcement of central procurement or regional procurement were identified. [5] The Board of Audit does, however, discuss cases of cancelled FMS contracts in an audit report. [6] Furthermore, FMS contracts can be amended or modified. Amendments are changes of the type and quantity of products or of the services provided, and require the consent of both the US and Japan. Modifications are changes of time of delivery or payment. Modifications are in principle determined by the US and do not require the consent of Japan. [7] Oversight organisations such as the Board of Audit do, however, have a powerful mandate to request information from government institutions such as ATLA, should they need it (see Q61A). [8]

“An outline of central procurement” contains details about ATLA’s and the Regional Defence Bureaus’ monitoring of the engineering work and cost prices of defence manufacturers, [1] and in an interview, a professor who has published articles about Japanese defence procurement confirmed that such monitoring is conducted on a regular basis. [2] According to “Instructions on the monitoring and inspection of procured items,” a person who monitors must submit a report to the MOD official in charge of the contract with the monitored company “if necessary” [3] or “if requested by the person who [later] conducts completion inspection of the completed product.” [4] The person who conducts the completion inspection must issue a certificate if the product passes the inspection and is approved or a brief record if it does not pass. [5] The contract responsible or a person above the inspector in the chain of command can request a report of the completion inspection. [6] The quality of products delivered by subcontractors or suppliers can be confirmed by a quality test, [7] or by receiving confirmation that the subcontractor / supplier has received official quality certification for its production of the concerned products. [8] No duty to conduct supplier and subcontractor appraisal is mentioned in these instructions, however, nor is such a duty mentioned in any of nine ordinances appended to a circular on general contract terms for the MSDF, including contracts with subcontractors. [9] The ordinances do, however, provide principles for how to deal with breaches of contract. One list of general terms for contracts with production subcontractors presents measures such as reduced pay for inadequate products, penalties and legal settlements. [10] A Board of Audit audit of FMS discusses reports written by Japanese defence authorities during an FMS procurement process. [11] There is, however, no indication in this audit report on FMS, which is regulated by a contract with the US Government, that Japan monitors subcontractors in the US.

The “Guidance on Bidding and Contract” has clear rules for how to handle breaches of contract. In some cases, the MOD may pay a reduced price and accept deliveries that do not meet the required standard, and in some cases the company that produced the goods may have to pay a fine. The guidance specifies sanctions for delays as well. [1] However, no examples of public announcements by the Ministry of Defence that a specific company has breached a contract were found. Such an announcement was not found on the homepages of the MOD, [2] or ATLA. [3] Neither was any report on such an announcement found in the mainstream national newspapers Asahi Shimbun [4] or Yomiuri Shimbun [5] or in the annual audit reports of the Board of Audit. [6] The Board of Audit discussed contract breaches in an audit report about procurement through FMS, however. If defects were found during receipt inspections, Japanese authorities quickly informed the US Government, and the issue was resolved. [7]

Both Military Supplies Law No. 3 of the year 1995, and Military Works Law No. 4 of the year 1995, are the main sources of legislation in relation to the armed forces’ contracting [1, 2]. Military Works System No. 4 of the year 1995, is the only piece of legislation that includes some formal policies and procedures about how to monitor, assess and report upon a supplier’s service and or delivery obligations, and these only include sanctioning suppliers from bidding for a period of two years [2,3]. There are some procedures to monitor contractors’ obligations, but these do not cover all procurement areas within the defence sector.

There is no transparency at all in the reporting and delivery obligations of contractors. It has been established so far that the only defence institution publishing its tenders is the Royal Jordanian Airforce, while the largest defence institution does not publish tenders [1, 2]. In addition to that, the majority of the armed forces’ procurement is not conducted through open competition. The Directorate of Defence Procurement for the Jordanian Armed Forces sometimes posts tenders and calls for proposals for its needs [3], and there are also attempts to make governmental tenders available online through the Government Tenders Directorate [4]. However, other than some e-tenders, the defence sector does not reveal any information about its procurement practices [5].

Although defence institutions do not release any information about defence procurement, whether concerning contracting or delivery, there are clear procedures in the law, where stocktaking and receiving committees, which are different to procurement committees, check and report the goods in question according to the contract [1,2]. Such committees conduct some of the activities listed in score 4, but not regularly. The procurement officers produce internal reports for internal use only, which do not include all activities such as the performance, quality and so on. The monitoring of the quantity and the date of sullying only are included.

There have been very rare instances where breaches were reported upon. These include incomplete number of goods or poor quality of food and clothes, but bidders/ suppliers were never punished [1,2].

There are various mechanisms under The Public Procurement and Asset Disposal Act that govern compliance to procurement regulatory policies. First is section 151 of the PPADA that provides for the formulation of a contract implementation team, to oversee contract delivery especially of complext and specialised procurement contracts. [1] The team has the responsibility of monitoring the performance of the contractor and reporting back to the accounting officer. In the event of contravention, Section 37 allows Public Procurement Regulatory Authority (PPRA) to initiate and conduct investigations into any procurement entity that contravenes contractual obligations. This can be on PPRA own initiative or in response to a request by the procuring entity or any other person. Furthermore, section 41 of the PPADA stipulates that debarment is the penalty for poor performance.

Contracts of defence procurement are treated with a high level of confidentiality. The public does not get any access to details of these contracts even post-award. Similarly, parliament’s Public Accounts Committee may also only access redacted reports of procurement activities in the Ministry of Defence. The provision for redaction is intended to protect matters of national security. [1]

The Public Procurement Regulatory Authority has noted that contract implementation has been a huge challenge within procuring entities. In 2018, PPRA issued an executive order no. 2 of 2018 that requires public procuring entities to submit information on the status of contracts or projects experiencing implementation challenges. [1]

This move is in line with PPRA mandate as per The Public Procurement and Asset Disposal Act (s152), which stipulates that the head of procurement is obligated to prepare monthly progress reports for all procurement contracts. [1] This requirement also applies to the head of procurement in the Ministry of Defence. However, questions arise on the effectiveness of contract monitoring both within Ministries like MOD. There is no evidence to suggest whether MOD does in practice report implementation of contracts. [2]

All public procurement entities are mandated, under section 158 of the Public Procurement and Asset Disposal Act, to submit both their procurement plan within sixty days after commencement of the financial year as well as all procurement awards on a quarterly basis Public Procurement Regulatory Authority. [1]

However, it is not clear how breaches of contract are acted upon for all state agencies, including the Ministry of Defence. Moreover, all public procurement entities are also required under section 138 to publish publicly all procurement contracts. However, national security organs are exempted from this process under the part 5 of the section. In reports by local media, the ministry is known to avoid scrutiny in matters related to procurement offences. [2]

Once a contract is signed by both the contracting authority and the economic operator, the relevant procurement officer informs the Chief Administrative Officer who appoints a Project Manager. The latter is responsible for managing and supervising the contract, and regularly reports back to the relevant procurement official [1]. Once the contract has been assigned to a Project Manager, the management of the contract, in addition to the power to change or terminate, will shift from the Procurement Department to the Project Manager [1]. The Project Manager will then prepare a contract management plan using the standardised form approved by the Public Procurement Regulatory Commission (PPRC) [1].
The responsibilities of the Project Manager are to manage the obligations and duties of the contracting authority specified in the contract [2]; to ensure that the economic operator implements the procurement in accordance with the terms and conditions specified in the contract [2]; to ensure that the economic operator submits all required documentation [3]; to ensure that the contracting authority fulfils all other payments and obligations [3]; to ensure that there is adequate control of costs, quality, and timings [3]; to ensure that all obligations are completed before closing the contract file [3]; to ensure that all contract management records are maintained and archived as required [3]; to issue variations or change orders if required (in accordance with the terms and conditions of the contract) [3]; to provide full details to the Procurement Department if there are changes on the contract, and wait for approval from the department before implementing any such changes [3]; to manage the submission of acceptance procedures [3]; to provide full details of any proposed termination of the contract to the Procurement Department [3]; and to submit reports on the progress or completion of the contract as required by the Procurement Department or the Chief Administrative Officer [3].
With regards to the termination of a contract, the Project Manager will submit a recommendation to the Procurement Department [3]. The recommendation should include the name of the economic operator and the procurement reference number; reasons for termination; contractual grounds for termination; costs arising from the termination, if applicable; and any other relevant information [4]. Furthermore, no contract should be terminated prior to obtaining approval from the Procurement Department and the Chief Administrative Officer [4]. When a contract is terminated, the Procurement Department informs the economic operator of the causes leading to the termination and takes immediate action in accordance with the terms of the contract [4].
The Public Procurement Regulatory Commission is responsible for dealing with: signed certificates issued by the Project Manager for submissions [6]; untimely submissions and the necessary liquidation implications [6]; contract termination and liquidation [6]; insurance policies [6]; security measures, if necessary [6]; guaranteeing liability for defects [6]; and ensuring payments are made on time [6].

Procurement contracts have been published since 2017 following pressure by Civil Society Organisations. However, only some Kosovo municipalities regularly publish their contracts [1]. Other public institutions, including the Kosovo Government and Ministries, do not publish their procurement contracts. Yet, the Rules and Operational Guidelines for Public Procurement approved by the Public Procurement Regulatory Commission (PPRC) in April 2019 stated that the contracting authority must publish its signed contracts [3]. There is therefore a lack of transparency in the publishing of contracts within public institutions in Kosovo [5].

The Department on Monitoring and Supervision within the Public Procurement Regulatory Commission (PPRC) is entitled to monitor activities of the contracting authorities in Kosovo [1]. However, this Department only has a small number of officials and thus does not have the capacity to monitor all contracting authorities on a regular and equal basis [2]. Based on the annual reports of the PPRC, a number of contracting authorities have not been not monitored in recent years [2].
Moreover, the PPRC only monitors administrative terms of the contract, so any thorough investigation of the contract implementation is not carried out [3]. Since 2015, this Commission has not published monitoring reports on the performance of the contracting authorities’ activities within public procurement [4]. The type of monitoring which is conducted by the PPRC is such that procurement activities are only monitored after they have been completed [3]. According to Civil Society Organisation findings, such monitoring lacks detail and therefore does not help to reduce violations in public procurement activities [3].

According to the National Audit Office (NAO), a number of breaches of procurement activities have not been addressed by the contracting authorities [1]. In response, the NAO has made specific recommendations for improvement in order to avoid such shortcomings in the future. For example, there have been poor processes for evaluating bids and awarding contracts to ineligible contractors [1]; so the NAO has recommended that procurement managers should ensure that the bid evaluation process fully complies with the established criteria [1]. Other issues include contract managers not being assigned; and poor management of contracts [1]. The NAO therefore recommended that a specific individual should be names responsible to manage a contract, and that same person should prepare a detailed report on the execution of that contract [1].

Auditors said that they are told that there are formal procedures that empower defence and security officials to track and assess the supplier’s service and sanction them for incomplete or inadequate services but they lack access to them, because the security agencies are secretive and do not respect the fact that auditors are legally entitled to review all their actions (1,2,3).

It appears that offset programs take this a step further. In a Government-issued booklets for these deals, it says that the contractor must provide a bank guarantee whose value must be equivalent to six percent of the value of the program to the Government, which will grant the contractor a guaranteed reduction certificate for each partial fulfillment of the contract (4).

The Government does not release any information about agreements or the delivery obligations of contractors beyond occassionally declaring what they have bought, and only after agreeing the details. The actual contracts are never made public, officials and activists said (1,2,3,4).

It is unclear if defence and security officials follow through on the procedures they told auditors that they have, because they refuse to present evidence of that, and they do not talk about it with journalists, activists and researchers, the sources said (1, 2, 3 and 4).

It is unclear if defence and security officials follow through on the procedures they told auditors that they have because they refuse to present evidence of that, and they do not talk about it with journalists, activists and researchers, the sources said (1, 2, 3 and 4).

The MOD has introduced formal policies and procedures of monitoring, assessment and reporting upon a supplier’s service and or delivery obligations. Assigned civil servants monitor implementation of the contracts and if necessary implement sanction procedures as laid out in the contract. [1]

All contracts, including modifications, are publicy availabe in the public database of the Procurement Monitoring Bureau. [1] The information at the disposition of the institution provides full access to all state procurement projects and the providers involved.

According to the government reviewer, the full text of all signed procurement contracts as well as all contract modifications (including change of sub-contractors) are available on the Electronic Procurement System webpage [2] under section e-tenders. All contracting authorities are obliged by law to publish such information.

There is not enough evidence to score this indicator. There is no public information available relating to the monitoring of contractors and their obligations

There is not enough evidence to score this indicator. No details could be found regarding the frequency of enforcement with regards to breaches of contract, and whether external scrutiny is applied in these situations. Many defense purchases require an industrial safety certificate. Such a certificate is difficult to obtain, so the range of potential performers and suppliers is narrow and very permanent. [1] [2] For this reason, breaches of contract are mostly dealt with internally.

According to the government reviewer, there are designated contract officers that are obliged to follow how contractors fulfil their contractual obligations. If contractual obligations are not met they shall be resoveld in accordance with mechanisms mentioned in the respective procurement contract. If the issue cannot be resolved at the level of contract manager or head of institution, the issue is raised at the level of Ministry of Defence. Such mechanism has proven to be effective. This information could not be independently verified. Moreover, an industrial safety certificate is a prerequisite for contractors only in very limited cases if they have to use the state secret information for delivery or services, mainly in construction contracts, according to the government reviewer.

Decrees no. 11574 and 11573 outline the sanctions applied as a result of incomplete or inadequate service delivery by the tender (1), (2). However, they do not lay out a detailed procedure on how to report supplier’s services and delivery (1), (2).

Contract information including details on sub-contractors, change of beneficial owners, additional costs, such as consultants and companies awarded are not publically available (1).

Research found no evidence of regularly produced contract monitoring and completion reports, including supplier and subcontractors performance appraisals (1). However, according to Decree no 11574, monitoring reports are conducted to ensure the obligations are met. Reports are issued whenever a contractor fails to meet the obligations. This includes, for instance, undelivered procurement of goods. Failing to meet certain obligations might leed to contract elimination (2). According to interviewee 5 and 6, policies are strictly implemented (3) (4).

Most contract breaches are dealt with internally since most are due to minor lack of compliance with contract requirements. It also depends on the contract terms and conditions stated in the penalty clause. (1) However, research found no evidence of the monitoring and completion reports, including supplier and subcontractors performance appraisals (2).

According to the Law on Public Procurement in Defence, the Public Procurement Office collects and analyses procurement information; concludes procurement contracts and reports on the performance of those contracts; and addresses procedural violations for such procurements, including assessing their nature, penalties and sanctions related to them [1]. If companies fail to fulfill their commitments as per contracts signed with them (the required terms of conditions to be filled out in the contract are laid down in Article 52 of the Law on Public Procurement in Defence Sector), the respective contract can be terminated and the companies can be further sanctioned by providing the information about the failure to the Public Procurement Office (Article 55 of the Law on Public Procurement in Defence Sector). .In 2016, with a view to encouraging reliable companies to fulfill their undertakings and preventing unreliable companies from winning tenders, a list of unreliable suppliers (in other words ‘black-listed suppliers’) was introduced. The contracting authorities shall disclose information on the Central Public Procurement Information System about the suppliers who fail to fulfil or fail to complete their procurement contracts within 10 days. The suppliers who are deemed unreliable remain on the black list for three years. The Public Procurement Office is responsible for the administration of the list which can be accessed online [2,3].

The Central Public Procurement Portal is an online tool for outlining procurement purchases. Detailed information of the purchase, final value of the contract and type of procurement are disclosed to the public for free, including details of the contract and any amendments. However, the contract implementation is not made public [1], and there is no guideline for scrutinising the quality of the product or service, unless the procuring agency notices it or if the Public Procurement Office receives a complaint.

According to the government reviewer, the Ministry of defence scrutinises the quality of the product or service in all contracts. This process is described in contracts.

There is no evidence to suggest that officials would regularly produce contract monitoring or completion reports such as supplier and subcontractors performance appraisals, which would be verified separately. However, if the contract was not completed adequately, the procuring agency might take actions for breach of contract [1]. For instance, in 2018, the Lithuanian army cancelled their contract with “Ekobana” due to its inability to produce products on time and respect the agreed contract [2].

According to the government reviewer, the Ministry of Defence scrutinises the quality of the product or service in all contracts. This process is described in contracts. The Public Procurement Office also collects and analyses procurement information, concludes procurement contracts and the performance of those contracts, as well as procedural violations for such procurement, their nature, penalties and sanctions related to them. Since 2016 a list of unreliable suppliers (in other words a ‘black list of suppliers’) has been introduced. The contracting authorities shall disclose information about the suppliers who failed to fulfil or failed to complete the procurement contract no later than within 10 days in the Central Public Procurement Information System. The supplier which is confirmed to be unreliable remains on the list for three years.

Breaches of contract are followed up. For instance, the Ministry of Defence terminated the contract with the company “Notta Bene” after the media reported on possibly corrupt procurements. Law enforcement bodies analysed the case to see if there was an abuse of power on behalf of the defence institutions, but terminated the pre-trial investigation in 2018 [1]. According to the General Prosecutor’s Office, the acquisitions were carried out with high corruption risks, however no evidence suggested there was ever an abuse of power [1].

There are formal mechanisms to ensure contractors meet the bidding obligations. [1] A Letter of Acceptance will be issued “to the successful bidder if his bid is accepted”. Successful bidders “are required to forward Performance Bonds based on stipulated rates according to the value of a contract” and “Performance Bonds must be obtained from locally incorporated banks, insurance companies and financial institutions that are licensed to operate in Malaysia.” For instance, a 5% bond is required for any contracts worth more than RM200,000. [2] The implementation process in terms of progress resports is monitored by the respective department and verified by internal audits.

Changes or modifications to a project are subject to a review by the Technical and Financial Committee, and must be reported to the procurement committee if the value of the overall project exceeds “RM50 million for supplies and services and RM100 million for works for Government Ministries/Departments.” [1] The modifications are not available publicly, however.

Monitoring is one of the weakest links in this process, especially where the project is awarded to a politically-linked contractor. [1] [2] The monitoring functions are performed by the respective military branches of the ministerial division. They have to be verified by the internal audits and the finance departments for the staggered disbursement of money based on the progress report provided by the respective departments. It is not clear which parts of the monitoring chain have failed in their monitoring duties. The finance departments disbursed money based on verified progress reports. If the monitoring chain was effectively implemented, there would not be publicised cases of failures. In one such case, only four out of 28 Russian fighter jets in the RMAF’s inventory are actually able to fly due to the lack of maintenance by the appointed company. In another concerning the purchase of Malaysian navy patrol boats, the “defence ministry had paid RM4.26 billion in advance to the contractor even though the progress of work done amounted to only RM2.87 billion.” [3] No further sources regarding the monitoring functions are publicly available.

Despite clear guidelines from the Ministry of Finance on tenders and procurement, enforcement remains a problematic issue. [1] [2] In many cases, companies involved failed to fulfill their delivery.

There are formal policies and procedures through the Code des Marchés Publics et des Délégations de Service Public but there is no evidence that any policies and procedures exist for defence procurement officials. The public procurement code (Code des Marchés Publics et des Délégations de Service Public) details :
– The public authorities charged with overseeing and evaluating the execution of the contract
– The available mechanisms to resolve disputes
– The sanctions that companies may incur for non-compliance with their contractual requirements
Article 94 imposes a legal obligation on companies to provide a financial guarantee that they will deliver on time and to the required standard. However, this does not apply to firms supplying “intellectual services”.¹ The size of the guarantee is determined by the contracting authority and must be specified in the contract documents. But the size of the guarantee cannot be inferior to 3% nor exceed 5% of the value of the contract.¹
Meanwhile, article 117 states that all public contracts are subject to “supervision, control, monitoring and surveillance of their technical, financial and administrative execution”.¹ The bodies responsible for these tasks are the contracting authority and ARMDS, which sits within the DGMP-DSP. Each contract should stipulate the conditions and methods of supervision and oversight for that particular project.
Furthermore, article 118 says that projects can also be subject to a comprehensive evaluation by the relevant regulating authority (ARMDS) after their completion.¹ This is to ensure that all rules have been respected from the initial tender process to the completion of the project.¹ At the end of each annual budget, ARMDS commissions an independent audit of a random sample of public contracts.
Mechanisms for resolving commercial disputes are also provided for in the code. Article 122 focuses on how either the contracting authority or the contract holder can call upon the Comité de Règlement des Différends (CRD) to settle a dispute.¹ Article 123 notes that after having exhausted non-judicial measures, i.e. the CRD, complainants can submit their complaint to a tribunal.
Finally, article 124 states that complainants can seek recourse to judicial arbitration in line with international OHADA standards, but only in cases where an arbitration clause expressly conforms with the necessary specifications.¹
The procurement code also outlines the potential sanctions firms can incur if they fail to deliver in accordance with their contractual obligations. Article 99 notes that companies that do not deliver on time are subject to penalties, after they have received prior notice. The fines are not allowed to exceed the levels fixed in the original contract. The contracting body can issue fines once it has consulted the regulating authority (ARMDS). Companies can invoke force majeure in advance of contractual deadlines to avoid having to pay penalties.¹
Article 101 states that all contracts can be terminated by the contracting authority, in accordance with the conditions in the contract, after having consulted ARMDS. Contracts can be annulled for a number of reasons, including:
– The repeated refusal to execute a service order
– Failure to deliver to the required standard
– Sub-contracting work without authorisation
– Failure to meet deadlines
– Serious fault, fraud or deception
– Providing false information or failing to provide proof regarding the requisite capabilities.¹

There is virtually no transparency for defence contracts with regard to contractual requirements. Indeed, state auditors often do not even know about defence purchases because of Article 8 in the Procurement Code, which enables security contracts to be exempt from standard procurement requirements.
In 2016, Mali’s authority for regulating public sector contracts and spending (ARMDS) found that it was wholly unable to audit the Ministry of Defence’s finances for 2014 because of the lack of documents provided by the ministry.¹ The MDAC provided documents relating to 88 of the 94 contracts issued by the ministry during 2014. But ARMDS deemed that all 94 were non-auditable.¹ Moreover, ARMDS highlighted the fragmentation of public contracts at the MDAC, meaning that costs were also divided up, which represents “a fraudulent practice”.¹
Contracts have not been published for any of the government’s recent major defence purchases. Indeed, the assessor found no media articles about these purchases that even cited in advance when the aircraft would be delivered. These findings apply to the purchase of:
– one C295W aeroplane from Airbus⁴ ⁵
– one new Super Puma helicopter from Airbus⁶
– one used Super Puma helicopter from Ireland⁶
– attack helicopters from Russia, which were bought after 8 million Malians reportedly signed a petition calling on the Russia government to help Mali by supplying military equipment⁷
– six A-29 Super Tocano combat planes from Brazilian company Embraer Defense & Security⁶
Although the government originally ordered six Tocanos, in 2017, President IBK spoke of obtaining only four planes. A defence attaché working in Bamako confirmed that confusion reigns over why the government is now expecting to receive four rather than six planes.¹⁰ The source speculated that either the government couldn’t afford all six or it had reduced its order in the hope that the G5 Sahel Force could share the burden and that the remaining two planes could be mutually funded.¹⁰ Either way, transparency is severely lacking.
Meanwhile, the purchase of the presidential jet in 2014 for 18.59 billion CFA was also not subject to any transparency given its secretive and off-budget nature.⁸ ⁹ Neither was the maintenance contract for the presidential plane that increased repair costs by over 500% in some cases.⁹ Neither were the contracts signed by former defence minister Soumeylou Boubeye Maïga for various forms of military transport that involved an overspend of 393 million CFA and were subsequently cancelled.⁸
However, the website of the DGMP-DSP displays a list of public contracts issued between 1 January and 30 September 2016.² The list contains details of more than 30 contracts awarded by the MDAC.² The document contains details relating to:
– The procurement process used
– The final financial value of the contract
– Whether that amount includes tax of not
– The name of the company that won and delivered the contract
– Where the money for the payment came from (e.g. National budget).²
For example, the most expensive defence purchase on the list was for 120 4×4 pick-up vehicles, which cost just under 3 billion CFA (USD 5,4 million).² All of the money for the purchases came from the national budget. The contract was awarded through a restricted open tender to an entity called ETS CHEICKN A SYLLA. Crucially though, there is no information concerning specific contractual obligations.
The DGMP-DSP also publishes a regular bulletin about public contracts, in which decisions of the CRD are published and explained. For instance, in May 2017, a public body lodged a complaint against a catering company (whose bid had been rejected) for providing it with inaccurate or false information concerning its financial affairs, in breach of its obligations as detailed in the procurement code.³
The CRD found that the catering company had submitted financial information that did not conform with the law, thus the CRD decided to exclude the firm from applying for public contracts for a period of six months.³

There is evidence that Mali’s authority for regulating public sector contracts and spending (ARMDS) does report on the failures of companies to adhere to the requirements of the procurement code when bidding for public contracts.
The DGMP-DSP also publishes a regular bulletin about public contracts, in which the decisions of the CRD are published and explained. For instance, in May 2017, a public body lodged a complaint against a catering company (whose bid had been rejected) for providing it with inaccurate or false information concerning its financial affairs, in breach of its obligations as detailed in the procurement code.1 The CRD found that the catering company had submitted financial information that did not conform with the law, thus the CRD decided to exclude the firm from applying for public contracts for a period of six months.1
However, state auditors often do not even know about defence purchases because of Article 8 in the Procurement Code, which exempts security contracts from standard procurement requirements.
The opaque nature of many defence contracts (see Q67B) means that the ARMDS is entirely unable to report on or monitor the companies that the MDAC has recruited to supply it with defence equipment.

The assessor has not found any evidence to show whether breaches of defence contracts are acted upon.
In June 2015, Mali signed a contract for the purchase of six A-29 Super Tocano combat planes from Brazilian company Embraer Defense & Security.⁶ In December 2017, President IBK said that the delivery of four of the planes was “imminent”.⁶ But, as of June 2018, there is no evidence that the planes have been delivered and it remains unclear why the order changed from six to four. There is no publicly available evidence indicating that the Malian government will impose any penalties on the company for the delay in supplying the aircraft. This was confirmed by a defence attaché at a foreign embassy in Bamako, who said that the planes should have been delivered in the summer of 2017 and yet there was no evidence of any penalties being imposed on the firm.¹⁰
The opaque nature of many defence contracts (see Q67B) means that the ARMDS is entirely unable to report on or monitor the companies that the MDAC has recruited to supply it with defence equipment. Thus, in these cases, it is wholly unable to enforce contracts because it doesn’t even know what the terms of the contracts are.
Indeed, in 2016, ARMDS found that it was wholly unable to audit the Ministry of Defence’s finances for 2014 because of the lack of documents provided by the ministry.¹ The MDAC provided documents relating to 88 of the 94 contracts issued by the ministry during 2014. But ARMDS deemed that all 94 were non-auditable.¹ Moreover, ARMDS highlighted the fragmentation of public contracts at the MDAC, meaning that costs were also divided up, which represents “a fraudulent practice”.¹

The Procurement Law [1] includes an “information and verification” chapter that establishes policies and procedures regarding monitoring. These are not very specific and do not include relevant details, because it is a deficient chapter.

The SFP makes available to the public, through the CompraNet platform, the relevant data on the contracts reported by the Purchasing Units of the Federal Government Agencies and Entities. Likewise, the General Law of Transparency and Access to Public Information obliges to make available the public version of the contracts concluded, including the amending agreements that, if applicable, are signed, specifying the purpose and date of execution. [1]

However, only general information is available to the public: publication date, type of contract, type of procedure, form of participation, contract code, title and description of the contract, start and end date, amount, amending agreement, RFC, supplier, among others, [2] but not of the contract as such. In this regard, access to the contract as such must be done through the access to information system, but specialised research indicates that upon receiving the response, crucial information for accountability, such as the owners of the companies, is classified. [3]

Regarding service delivery, Article 58 of the Procurement Law [4] says that the “form and terms with which agencies and entities must send information related to procurement acts and contracts to the Secretariat for Public Function and the Secretariat for the Economy will be established by these Secretariats in the ambit of their own competencies.” The Public Function Secretariat must create an electronic system of public information including approved suppliers, contracting processes, executed contracts, registry of sanctions, and non-conformity resolutions.

In accordance with the regulations, compliance with contracts with public agencies must be supervised, verifying that the goods or services are delivered in accordance with the requested requirements. [1] Likewise, at the end of the contracts, each purchasing unit must provide information on the fulfillment of said contract for the CompraNet system to grant it a rating. [2] The entity must register information on sanctions, deductions, execution of guarantees, hidden issues, disqualifications, and termination of contracts in the CompraNet System. The entity also registers the degree of compliance with contract based on an equation. This information is public, but while breaches of contract must be registered, there is no information on supplier performance appraisals or regarding whether consistent actions are taken for breach of contract.

The agencies have the responsibility to agree to conventional penalties at the provider’s expense for delay in meeting the agreed delivery dates or the provision of the service, and may also terminate the contracts when there is a breach of obligations. [1]

Specialists and investigative documents point out that in many cases no action is taken regarding breaches of contract. In other words, despite the imposition of fines, a large number of companies do not comply and continue to obtain contracts with the government through corrupt means. [2] [3] [4] [5]

The Law does not include any provisions for contract management by contracting authorities, except the obligation to publish notices of contract amendments. [1] Inspections of public procurement by the AIA include controls on the “conclusion and implementation of public contracts”, but this does not qualify as contract management. [2] A request was made to the MoD for additional details, but no information was provided.

According to the MoD reviewer, mechanisms to ensure that the contracting parties fulfill their obligations and report on the implementation of the contract are envisaged in the terms of the tender documentation and the provisions of the public procurement contract in such a way that the authorized persons by the Contracting Authority (Commission, Supervisory bodies) will be tasked with monitoring the material flows and the financial realization of the contract in terms of compliance with the contractual terms in terms of payment method and deadline, delivery time, checking the quality and quantity of the contracted goods, submission of technical documentation etc. The contract also provides for financial security, such as a performance guarantee – the protection from breach of contract and contractual penalties – penalties that are calculated and collected due to delays in performing the contractual obligation of the supplier or service provider.

The law obliges all public institutions to publish modifications post award, [1] but not information on contract failures. There is no obligation to publish changes of sub-contractor or changes of beneficial owner. [1] Many institutions do not publish signed annexes to the contracts. [2] Oversight institutions perform limited and ineffective oversight, [3] but they are provided with all requested information.

There are no procedures and no official control is envisaged, but if obligations are not delivered, court cases are initiated. [1]

According to the MoD reviewer, officials conduct activities related to contract monitoring and completion reports and actions are taken for breach of contract. This is stated in the articles in contract that regulate breach of contract. Mechanisms to ensure that the contracting parties fulfill their obligations and report on the implementation of the contract are envisaged in the terms of the tender documentation and the provisions of the public procurement contract and Contracting Authority (Commission, Supervisory bodies) is regularly monitoring the contractual obligations fullfilment. The contract also consists of clause for financial security, such as a performance guarantee – to protect against breach of contract and contractual penalties – penalties that are calculated and collected due to delays in performing the contractual obligation of the supplier or service provider. [2][3]

It is not clear if breaches of contract are acted upon and this information is not publicly available, [1][2][3][4][5] but the government claims that its initiates court cases if contractors fail to deliver. [6][7]

According to the MoD reviewer, each public procurement contract contains a clause prescribing the jurisdiction of the Commercial Court in the event of a dispute. Article 150 of Law on Public Procurement stipulates provisions of breach of contract [8]. All breaches of contract are hence adequately acted upon. Issues are dealt with internally, or raised with higher management in the ministry. If not resolved, issues are to be referred for further external scrutiny e.g. to the national audit office and defence committee. There were no open court cases in MOD public procurement area so far, as all the breaches of contracts have been consensually agreed.

No formal policies or procedures that outline how to monitor, assess and report upon a supplier’s service and or delivery obligations were found in the relevant legislation (1)(2).

No evidence of transparency in the reporting and delivery obligations of contractors was found.

No evidence was found that procurement offices conduct reporting and delivery obligations at all.

In the absence of formal policies or procedures that outline how to monitor, assess and report upon a supplier’s service and/or delivery obligations, it is unclear how these procurement offices work, what their regulations are, and who they report to (1)(2).

On the contrary, interviewees alleged that some commanders of the military were involved in and benefiting from corruption (3)(4)(5)(6). Although outdated, the Captain Adib case highlighted the alleged participation of General Benani in corruption activities. Although there has not been high-profile or highly publicized cases since, the interviewees state that this is due to the fear of soldiers and officers to report it, as well as the fear of journalists to investigate it due to pressure from the Moroccan authorities should they do so.

The alleged presence of corruption within the Moroccan armed forces might support the fact that no specific training for procurement staff is implemented, and that if it is, it is not efficient at all.

There are no formal policies or procedures that outline how to monitor, assess and report upon a supplier’s service and or delivery obligations, no transparency in the reporting and delivery obligations of contractors, and seemingly no procurement offices conducting reporting and delivery obligations. There is therefore no ground for breaches of contract to be acted upon. Therefore this sub-indicator is marked as non-applicable.

There are some procedures for investigating contractors’ services and delivered goods. The relevant procuring entities and respective departments in the military are responsible for inspecting delivered goods and reporting on delivery obligations and progress. Contractors who do not meet their obligations are sanctioned. Sanctions, such as cancelled payment, are imposed on the corrupt contractors and companies [1]. A retired senior military officer said that the respective departments of the military inspect the delivery with special care [2]. But inspection procedures are not released to the public.

A retired military officer said that certain military contracts and tenders, especially those concerning armaments, cannot be made public [1]. A military contractor also said that deliveries are not made public [2]. Military contracts are rarely made public and so it is impossible to know the contract information.

The Directorate of Procurement has a monitoring mechanism, whereby personnel from the respective military departments inspect deliveries and procurement officials ensure that contractors meet their obigations. However, external actors, such as civil servants and politicians, are not included in the monitoring mechanism [1]. According to a retired senior military official, the tender process is rarely made public, especially when it concerns weapons [2]. These reports are not publicly disclosed.

Inspectors from the respective departments of the military can report corrupt activity and unqualified delivery. Sanctions, such as cancelled payment, are imposed on the corrupt contractors and companies. External actors, such as civil servants and politicians, are excluded from this scrutiny [1]. The military’s procurement activities and the Ministry of Defence are exempt from the Union Auditor General’s authority [2]. It was not possible to find any definitive evidence regarding enforcement. As such, this indicator is not scored and is marked Not Enough Information.

Policies that outline reporting or delivery obligations exist under the general terms and conditions for procurement contracts [1]. Article 9 of the General Government Terms and Conditions for Public Service Contracts states that progress reports should be submitted as often as the contracting authority deems fit [1]. Article 21 of the General Government Terms and Conditions for Public Service Contracts states that if a party fails to discharge their obligations under the contract, the other party may give notice of default [1].

For purchases over 25 million euros, the Defence Projects Overview (published annually online) details financial progress and timelines as well as any major changes (including change of contractor or unforeseen costs) [1]. The Court of Audit is responsible for the oversight and scrutiny of the Defence Materiel Process, Phase E of which includes an evaluation of the materiel delivered [2]. However, no other awarded contracts are publicly available. The Central Government Audit Service has access to all information needed to conduct its audits, including procurement contracts [3,4].

Officials produce contract monitoring and completion reports for all contracts, but these are not public and their contents are unknown. For materiel that is part of the Defence Materiel Process (over 25 million euros), the Defence Projects Overview provides a level of detail that insinuates robust monitoring and reporting [1]. For all other contracts not covered by the DMP, oversight reports by the Central Government Audit Service show that contracts must be monitored for completion and quality [2]. It is not known whether the monitoring is mostly financial in nature or whether monitoring and completion reports also include supplier and sub-contractor performance appraisals.

There is not enough information to score this indicator, due to a lack of data to assess enforcement in practice.

Article 21 of the General Government Terms and Conditions for Public Service Contracts states that, if a party fails to discharge their obligations under the contract, the other party may give notice of default.[1] In the event of default, liability is set between 150 thousand euros and 5 million euros, depending on the value of the contract.[2] The scrutiny of the Central Audit Service and the Court of Audit ensure that procurement officers enforce sanctions for breach of contract. However, no cases or problems with breaches of contract have been identified.

Rule 53 of the Government Procurement Rules states that “agencies must provide data and information to the Procurement Functional Leader on procurement activity including broader outcomes as authorised by Cabinet and/or Ministers of Finance and Public Service” [1]. According to Rule 52, agencies must maintain records to document “the procurement process which includes planning, sourcing, evaluations, meetings, issues and resolutions, recommendations and decisions. Each step should be thoroughly documented and maintained as records.” The Agency must also abide by the obligations set out under the Public Records Act 2005 [2]. The Government Supplier Code of Conduct outlines the expectations of suppliers. The Defence also requires suppliers to make their sub-contractors aware of this code. A contractor’s obligations on reporting and delivery are set in the contract with the Crown. Failure to meet these obligations could result in mediation and/or liquidated damages. That each procurement or refurbishment project will achieve on delivery the agreed/contracted specifications that are critical to acceptance is measured, audited and publicly released in the Ministry’s Annual Report, such as the delays experienced with the Anzac Frigate Systems Upgrade [3, 4, 5]. In addition to the above, New Zealand Government procurement supplies a series of contract templates for the agencies, this includes a Due Diligence checklist within which an analysis of delivery is provided [6]. A comprehensive template plan for procurements over $100,000 further details when and how output performance should be monitored and reported. [7] Agencies must operationalise Approved Government Model Templates [8]. Overall, there appears to be a degree of leeway in how suppliers fulfil their obligations on reporting and delivery, as these must be agreed by the participating parties, and monitored by the respective Agency who awarded the contract. While this is in place, the reporting and delivery outcomes must meet the Government’s principles, rules, and broader outcomes [8]. For sanctions and resolutions see Q66B.

Changes to contracts would be listed in the MoD’s Annual Reports and Major Project Reports, such as the Anzac Frigate Systems Upgrade [1, 2, 3, 4]. The Major Projects reports were released annually until 2018. The same type of information contained within these is now released on the MoD website, but it is in a less accessible format. Detailed information allowing for pre- and post-contract award scrutiny is not publicly available but could be requested through an OIA process. Oversight agencies have full access to contract changes so as to permit comprehensive review [5].

The MoD and NZDF advise that contract obligations on reporting and delivery are set out in the contract with the Crown, and failure to meet these could result in mediation and/or liquidated damages [1]. Supplier score cards are not used. However, all projects include Factory Acceptance Tests (or an equivalent) prior to accepting a capability. Acceptance is then followed by a period of Official Testing and Evaluation. For complex build programmes, such as a ship build, independent on-site quality assurance is sought. For example, Seaquest provided on-site superintendent services during the design and build of HMNZS Aotearoa. [6].

It is assumed that, within the NZDF, monitoring forms part of the Procurement Assurance Boards’ responsibilities as detailed in DFO 52 of the NZDF’s internal procurement policy. Despite the ambiguity, Government Procurement Rules, specifically Rule 53, state that Agencies must be committed to reporting and monitoring projects in order to ensure accountability and transparency – records must be kept for at least three years and must comply the Public Records Act 2005 [2]. Moreover, Stage 7 of the Government’s Mastering Procurement guide relating to contract management and reporting clearly identifies regular monitoring as a key output and performance benchmark [3]. Agencies must also draft individual and confidential Contract and Relationship Management Plans with suppliers so as to establish monitoring and reporting frameworks, and include criteria for underperformance [4].

As of 2017, nine Defence procurements were subject to Major Project Monitoring by the Treasury, however this no longer occurs which left one organisation suggesting that this may present a “transparency gap” [5]. Again, it must be assumed that the introduction of the Government’s Better Business Case model, alongside the Procurement Rules, Charter, and Principles, and various Agencies’ Codes of Conduct has satisfied the independent auditors, such as the OAG.

No evidence of breach of contract has been found for major defence procurements during this assessment’s period of investigation. Such a stance is supported by the Commerce Commission, which acknowledged that it had no information of any investigation, complaint, enquiry or finding relating to defence and security procurements during the period 1 January 2015 to 1 December 2020 [1]. One recent project that the Treasury rated “Red” in its Gateway Review (which means that on the current trajectory’ delivery appears not to be possible) was the ANZAC Frigate Systems Upgrade [2, 3]. The Secretary of Defence was questioned on this project and, in the eyes of FADTC, sufficient information was supplied explaining the project’s cost overruns and reasons for it as hardly any mention was made of the project in the FADTC’s following Annual Report [4, 5, 6, 7]. It is important to note that the FADTC and the OAG did not find a breach of contract, but instead found fault with the ministry’s handling of the contract. The lessons learned from this experience have led to a significant restructuring of defence procurement management, including cost-benefit analysis of replacement projects [8]. The independent Review of Defence Procurement Policies and Practices and its Follow-up Review both contributed to this positive change by providing external recommendations to the processes involved in approaching and managing procurement projects [9, 10].

There are several formal policies to ensure that contractors meet their service and delivery obligations. These are mentioned in Art. 10 of the 2013 Decree (1), which stipulates that bidders (suppliers) must be able to meet service and delivery obligations, including the export, transfer and transit of goods merchandise, as well as other guarantees related to supply chain logistics, availability of stocks and the modernisation of goods merchandise.

According to Article 10:
“To guarantee the security of supply, the contracting authority may require the bidder that the bid contain the following:
– evidence that it will be able to honour its obligations regarding export, transfer and transit of goods.
– evidence that the organisation and location of its supply chain will allow it to comply with its contractual requirements.
– a commitment to meet additional needs as a result of an emergency, crisis or armed conflict.
– a commitment to carry out the modernisation or adaptation of the supplies covered by this contract, as necessary.
– a commitment to inform the contracting authority in due time of any change in its organisation or its industrial strategy that may affect its obligations to that authority” (1).
(Consultant translation French to English)

Furthermore, Articles 35 and 36 of the 2013 decree provide for a “caution on performance” that may be required by the tender board during negotiations (1).

Article 35 of the 2013 Decree also provides for a posteriori control, “contracts negotiated by direct agreement in the context of the present decree are subject to a posteriori control in the conditions defined in articles 77 and 78 below” (1). However, there are no specifications in the articles mentioned above on how this control can be exercised. Therefore, the existing legislation does not seem particularly robust. However, an interviewee explained that if a company fails to respond to the contract requirements on reporting and delivery, it may be sanctioned: upon the approval of the Regulatory Agency on Public Procurements the company can be added to a list of companies excluded from the public procurement (2).

Due to the confidentiality of the procurement process (1), the assessor identified no evidence related to reporting and delivery obligations of contractors.

The Department of Public Procurement of the Ministry of Defence is composed of two divisions one regulates the procurement process, and another is responsible for the execution control of the procurement (1). Therefore, it is likely to assume that officials conduct contract monitoring and completion reports. However, given the confidentiality of the procurement process (2), it is difficult to evaluate with precision the existence in practice and effectiveness of such monitoring. Furthermore, confidentiality may give rise to informal procedures and may increase corruption risks.

Given the confidentiality of the procurement process (1), it is not possible to evaluate if there were breaches of contract and if they are adequately followed up.

Although the PPA 2007 outlines clear policies and procedures on how to monitor, assess, and report on suppliers’ service given that the application of the legislation to the defence sector is not consistent with all aspects of the legislation, it is unclear what precise reporting policies and procedures exist in the defence sector. The committee’s investigation into weapons procurement identified a failure or breakdown in reporting policies and procedures. “The committee’s interactions with the field operators also revealed that although the platforms and ammunition procured for the Nigerian Army were deployed for the North-east operations, most of them were over aged or expired and support spares were insufficient or completely not available. The platforms were prone to frequent breakdown without immediate recovery support. The non-adherence to the procurement procedures resulted in procurement of some unreliable equipment that reduced the capacity of the Nigerian Army in the North-east operations and resulted in avoidable loss of lives and equipment.” It can be argued that historically the reporting of policies and procedures were weak. The provisions of the PPA 2007 indicate that reporting policies and procedures do exist, although whether they are strictly adhered to is subject to considerable doubt (1).

There may be specifications in the contract which should be used to measure or maintain scrutiny. However, the information available suggests that there is no method to ensure quality assurance as political influence and interference from senior officials prevents adequate scrutiny. Oversight agencies are also provided with little information (1). “At present, high-ranking politicians are able to influence the outcome of the procurement process by putting undue pressure on civil servants who feel unable to refuse to bend to this pressure. This means that in practice, the procurement process is manipulated at the instance of the interested politician and contracts awarded to the person or firm in which the politician has an interest. The tender board procedures are not transparent” (2). There is no transparency towards the tender board procedures. High-ranking officers play a role in the process which is highly influential and can result in a significant by-pass of the published procedure(s) (3).

IIt was certainly the case that procurement officers were only formally involved in the procurement process to approve certain transactions irrespective of the quality of the purchases confirmed. Reports of corruption cases in the military sector repeatedly confirm that there are no quality monitoring procedures in place or the procedures in place do not function optimally (1). The first indication of the inappropriateness of military acquisitions occurs in the field during operations. Perhaps a distinction needs to be made between previous procurement monitoring and the current situation (2). If the monitoring processes were active one would have expected to see more communication and activity occurring between the Anti-Corruption Units in MDAs and procurement officers. Recent cases continue to highlight the weak monitoring of the procurement process. More recent examples include the allegations of inflated contracts such as the cost of 65 million nairas spent on the SGF’s website. “We have reviewed the website, it is simply shocking that N65 million was spent on the website. It’s implausible,” he said. “OSGF must provide more details on what they did with the money. The website has no special features to justify more than a million naira budget” (3). The more recent cases have been highlighted in the press. Some investigations appear to have taken place; however, no prosecutions thus far in terms of criminal charges being made have been reported.

Before 2016 it appears that very few breaches of contract were acted upon at all. “The U.S. effort to sell weapons to the Nigerian Air Force — whose last three chiefs, along with several other of its top officers, are currently on trial for embezzlement and procurement fraud — is incongruous with U.S. rhetoric. Nigerian Air Force corruption is not ancient history: The senior air force officer whom the U.S. Defense Attaché brought to Washington in July 2015 to discuss the Super Tucano sale has since been charged with corruption. Furthermore, it is not clear that the Nigerian Air Force become any more transparent about its finances, procurement, or contracting processes over the last year” (1). Outside the scope of the current high-profile corruption cases which have a high degree of political motivation, it is difficult to determine if a culture of enforcement is the norm (2). The credibility of current efforts would have been significantly bolstered if other low-level prosecutions were simultaneously taking place. The focus on high-level officials from the previous administrations raises some doubt as to whether enforcement is comprehensive. This is particularly the case where other public officials who have been identified as taking part in irregular procurement activities, have not been prosecuted. For example, the former SGF Lawal, who was accused of corruption, has not been prosecuted (3). The recent HSLI case suggests that the enforcement mechanism is weak as there has not been any enforcement action taken except for the termination of the agreement.

All contracts outline a protection mechanism such as bank guarantee to ensure timely and quality performance. If the conditions are not met, the guarantee is activated and a negative reference is published on the Electronic System for Public Procurement (EPPS) [1]. Moreover, within the Ministry of Defence Logistics Department there is a Quality Control Unit whose task is to carry out quality control before delivery. In accordance with the Ministry of Defence Rulebook on procurement which specifies the required monitoring, assessing and reporting procedures, the quality control department examines the quality of the assets and services that are subject to procurement under a completed contract [2]. When certain goods or services do not meet the specified requirements, the economic operator (bidder or contractor) is first required to address the lacking requirements. If this does not happen, the Ministry of Defence does not accept the goods in question, and if the problem is not overcome, the contract may be terminated and the company may be subjected to sanctions prescribed by the Law on Public Procurement [1]. When goods require laboratory analysis, the possibility of additional laboratory analysis in an independent laboratory is offered in order to confirm these goods meet the required criteria. The results of the additional laboratory analysis are final [2].

According to provisions in the Law on Public Procurement, Article 6, all non-classified contracts are publicly available, including any contracts which have undergone Ministry of Defenceifications after an award [1]. These are published (or updated) using the Electronic System for Public Procurement (EPPS) [2]. The use of the electronic system is mandatory for all published listings [3]. Classified procurements are excluded from this provision, following articles 6 and 8 of the Law on Public Procurement in Defence and Security [4]. The list of the items considered in Article 8 are defined in the Decission of the Government, Official Gazette of the RM, No. 246/19 [5].

In line with the Ministry of Defence Rulebook on Procurement, it is mandatory to control the quality and quantity of procurements. Hence, the Quality Control Unit within the Ministry of Defence Logistics Department monthly produces contract monitoring and completion reports [1]. These mainly contain reviews of delivered goods and services in the previous month (Article 15.2) [2]. Importantly, quality control of the procured equipment starts immediately after the contract is signed. The receipt of the procured material is produced in accordance with the terms outlined in the procurement agreement. The control is performed at the producer’s premises or user’s premises, depending on the agreement terms [3].

In case of a breach of contract, the Rulebook on Procurement prescribes that the issue should firstly be raised with high-level management within the Ministry of Defence, for instance with the Logistics Department which is obliged to act in line with Law on Public Procurement (Article 16.2) [1]. If goods or services do not meet the specified requirements, the supplier is asked to rectify this. If no solution is found, the contract may be cancelled and sanctions implemented as outlined in the Law [1]. These cases are made public and can be found on the Electronic System for Public Procurement (EPPS) website [2]. Publicly, however, no instances could be found of unresolved issues referred for further external scrutiny to the State Audit Office and the Parliamentary Committee on Defence and Security. The 2013 Ministry of Defence audit as well as minutes from Committee meetings from 2016-2018 do not contain any information relating to these issues [3,4].

On July 2, 2019, the Ministry of Defence cancelled its contract with a textile company “Dona – M”, which did not comply to the provisions of the contract [5].

Monitoring and sanctioning procedures for contract delivery in the defence sector are regulated by the Acquisition Regulations for the Defence Sector [1]. The procurement authority is responsible for monitoring the contractor with regard to conditions influencing timely delivery, quality and costs. Monitoring procedures include an introductory meeting, status updates in accordance with the plan specified in the contract, inspection of the contractors’ and subcontractors’ working places and the contract clauses providing necessary access to the contractors and the subcontractors. At the very least, a report must include a summary of what has been done in the previous reporting period; an overview of planned activities for the next reporting period; identification of particular problems which may delay the project; and an overview of the action the defence authorities have to take in order to ensure the realisation of the project according to the plan. Sanction mechanisms are applied if there is a failure to deliver on time or in accordance with the agreed quality and costs. They include reduction or repudiation of payment, liquidated damages or compensation. The Norwegian defence sector may require liquidated damages without documentation of losses due to delay. The standard rate for liquidated damages is one thousandth per weekday after the completion deadline, calculated from the price for the delayed part of the contract/delivery. The liquidation damages are limited to 10% of the price for the delayed part of the contract/delivery.

As a rule, all contracts are published on DOFFIN (the Norwegian national database for public procurement) [1]. However, contract modifications post award are not publicly available. If oversight agencies decide to start an investigation, they will receive all this information. The Acquisition Regulations for the Defence Sector specify that the Office of Auditor General shall be given access to the same confidential business information as the internal Contract Audit section [2]. It should be noted that, although contract modifications post award are not publicly available, the Office of Auditor General would have access to all information on request.

Officials regularly monitor bigger and more important contracts. Contract monitoring and completion reports include supplier performance appraisals and sometimes also subcontractor performance appraisals. Additional examinations are conducted if deemed necessary. Actions are always taken for breach of contract [1].

Actions for breach of contract are always taken, but attempts are made to solve such issues at the lowest possible level. Occasionally, breaches of contracts may be raised with the higher management of the Ministry of Defence or end up in the court [1].

There are some policies and procedural measures to outlines how to monitor, assess and report supplier’s services (1). However, these guidelines do not include what to report, quality, times, sanctions, corruption activities and other indicators. They are mostly to ensure the delivery of service regardless of their quality and other corruption practices, such as bribery, mismatching of quality of goods, etc. (1), (2).

There is a lack of transparency in general in the procurement process, which include reporting and delivery system. Officials fail in many cases to completely report on the obligation of single-sourced suppliers and a usual supplier (1), (2)..

Monitoring as part of the management of suppliers is minimal (1). Officials conduct some completion reporting on the contractual obligations but, usually, fail to include main elements such as performance, and quality of supplies before using the supplies or sending them to storage (1), (2).

Breaches of contract can sometimes be sanctioned, but not always (1), (2).

There are no formal policies or procedures that outline how to monitor, assess and report on a supplier’s service and or delivery obligations (1), (3). This is in general and not only the security/national forces sector. However, the general procurement law of the PA outlines minimum procedures of reporting, things like if the delivery is complete and does it meet the initial requirements (2).

As there are no reporting procedures and guidelines, when reporting is conducted, there is no transparency in the reporting and delivery obligations of contractors (1). The reporting is not consistent. Sometimes purchase contracts can be closed without a report. According to an interview with an officer within the national forces, when they receive any goods, they accept them without a thorough inspection (2). So, “Delivered” with asset totals is the only consistent reporting obligation.

Officials conduct some monitoring activities, but not regularly. They only submit a completion report of the delivery of the service or supplies, but rarely check the quality or the performance rendered from the contract (1). The performance appraisal does not exist only completion reports are written. Suppliers and subcontractors performance appraisals are independently verified (2).

Officials conduct some monitoring activities, but not regularly. They only submit a completion report of the delivery of the service or supplies, but rarely check the quality or the performance rendered from the contract (1). The performance appraisal does not exist only completion reports are written. Suppliers and subcontractors performance appraisals are independently verified (2).

Policies and procedures on how to monitor, assess and report a contractor’s service are outlined in the Procurement Reform Act RA 9184 [1]. Pursuant to Section 69 (6) of this act, suppliers who fail to deliver their obligations are issued a Blacklisting Order which disqualifies the contractor from participating in the bidding of all government projects [2]. Likewise, the performance security (a measure of guarantee that the winning bidder will fulfill its obligations) of the contractor will also be forfeited [2].

Information on contract failures and modifications are rarely released but, in some cases, the media manages to obtain some details; further, as the oversight agency with a representative in the tender board, the COA has direct access to information [1, 2].

The BAC prepares a quarterly Procurement Monitoring Report that covers major activities from the holding of the pre-procurement conference to the issuance of notice of award, approval of the contract, delivery/completion and acceptance/turnover, including the standard and actual time for each activity. Each report is verified seperately by the Head of the Procuring Entity (HoPE), or by an authorised representative who is not part of the tender board [1]. If contracts are breached then the company is blacklisted [1]. These reports are available via the Government Procurement Policy Board website [2].

Given that detailed monitoring reports are not publicly shared, it is difficult to assess how proactive procurement officials are in carrying out reporting and delivery obligations. This being said, blacklisted suppliers are listed on the GPPB website and issues are resolved internally [1]. If unresolved, the Congress and/or the Ombdusman can choose to conduct an investigation. Information on breaches of contract are also reported by the COA in their annual reports, and the media has been vigilant in picking them up [2, 3].

he system of quality assurance is based on the Act on Conformity Assessment System of Products earmarked for the National Defence and Security purposes [1], MoD Order 427/MON (October 29, 2014) on a system of defence quality assurance [2] and implementation procedures set up by MoD Order 447/MON (November 10, 2015) [3, 4]. The act foresees self-assessment by defence supplier or assessment by certification unit or tests performed by a research unit. Specific contracts may include additional procedures. As certification and tests are ordered and paid by the supplier the system has been criticised due to potential conflicts of interest [5].
The MoD Order 427/MON set up quality assessment procedures consistent with NATO Mutual Government Quality Assurance (GQA) Process described in AQAP-2070 (Edition 1) standard [6].
Contracting authorities are required to include in the contract a quality clause, elaborated by relevant military bodies, which contains quality assurance procedures. The nature of these procedures depends on a risk assessment and it contains monitoring rights. Monitoring and assessments are carried out by specialised Regional Military Representative Offices. Detailed report policies and procedures are based on risk assessments which are then adopted to specific contracts. Sanctioning rules and procedures (as fines or contract cancellation) should be included in contracts. The MoD order on procurement procedures which is excluded from the Public Procurement Act sets up the explicit obligation to include these types of rules in contracts [7].

The contracts are not published publicly [1]. On the Inspectorate of Armament’s website, there is only general information about the signed contract, such as the name of the company, the value of the contact and the delivery timeline [2].

Monitoring of the contract implementation is provided by the Regional Military Representative Offices or respective foreign quality assurance institutions if rules on Mutual Government Quality Assurance Process applies based on NATO or bilateral agreements [1].
Regional Military Representative Offices oversee both quality and deadlines of the contract implementation. The frequency and methods of monitoring and reporting depend on a risk assessment provided before signing of a contract and contractual clauses [2]. This kind of monitoring is sometimes criticised as too formal and passive, namely based on documents provided by contractors rather than on onsite visits [3].
At the level of the Ministry of National Defence, organizational units have procedures that oblige the ordering party to inform financial departments about delays in the contract, and there is usually a contractual penalty charge. Not informing about a delay results in the possibility of a violation of public finance. Within the Inspectorate of Armament, officers supervising the performance of the contract prepare reports and present them at cyclical briefings [4].

There are instances of enforced contract violations. An example is the charging of 1 million PLN (~230,000 EUR) for the delay in the delivery of modernized helicopters for the Navy [1]. Another example is the indictment for the vice-president of a company supplying 16 low-loaders for transporting tanks and heavy tracked equipment. In this case, the company provided older equipment than it promised in the contract and falsified the technical documentation [2]. However, there is no practice of referring issues to external scrutiny.

The Public Procurement Code establishes detailed legal reasoning for contract resolution and sets out monitoring obligations for public buyers [1]. Incomplete and or inadequate delivery are reasons for contract resolution. These provisions apply to defence procurement as the decree-law regulating its perimeter defers to the Public Procurement Code.

Public procurement execution reports are not made publicly available in an accessible format. Contract modifications are only searchable if they pertain to a ten per cent price increases [1]. In the defence sector, this is somewhat ameliorated by existing information on Military Planning Act (refer to question 63C), but existing evidence does not support any claim to transparency with regards to reporting and delivery obligations.

Oversight bodies, namely the CA, are empowered by the Public Procurement Code to receive information on contracts [2], but the CA does not audit reporting or delivery beyond strictly financial and accounting aspects. The Institute of Public Markets, Real Estate and Construction, which functions as the regulator of public procurement, does not release contract reporting or delivery performance,

There is evidence that contract execution is appraised [1, 2, 3], but sources suggest that monitoring is only appropriately implemented when contracts are above a very high contract value threshold. Given that the majority of contracts in the defence sector are below those reported in sources and CA’s mandate only encompasses contracts above €350,000, there is a very high likelihood of irregular monitoring.

There is no evidence of concrete enforcement of contract termination upon breaches. A recent report on the remaining offsets contract in force suggests a lack of willingness to terminate contracts [1].

There are some formal policies and procedures outlining how to monitor, assess and report on a supplier’s service and/or delivery obligations as part of the procurement guidelines. However, these mechanisms need more development and advancement as they are not clearly defined. The enforced mechanisms and procedures ensure that contractors meet their obligations on reporting and delivery, but they do not define the mechanism of sanctioning clearly. [1,2]

Reporting on delivery obligations occur via templates and forms. These forms are filled in by officers and then sent to the relevant units (finance, procurement, and stock). However, there is no data or information available to the public, ACTA, MoF or other institutions. In rare cases, post-delivery modifications happen, but if the supplier failed to meet the standards required, they could be disqualified from future biddings. [1,2]

In procurement, officials usually conduct monitoring activities to ensure that deliveries comply with contractual obligations, but do not look through them. This happens to food, clothes, and general logistics, but not to weaponry and other procurement such as jets or tanks. The performance of suppliers has never been verified externally but is done by reporting to the procurement committee. [1,2]

There are cases where breaches of contract are sanctioned. These cases could include poor quality of goods (food, clothes, or services). In general, no action is taken in the case of minor breaches. These will be fixed instantly or by an informal agreement. [1,2]

Article 101 of Federal Law No. 44 states that the ordering party shall carry out an inspection upon the supplier’s delivery of service obligations [1]. Section VI of Minister of Defence Decree No. 2350 outlines how the structural department, authorised by the Minister of Defence, shall monitor the fulfilment of the supplier’s obligations as defined in the state procurement contract [2]. The structural department shall first check a) the fullness, accuracy and fairness of the supplier’s submitted report on the provided services and b) the conformity of the provided services with the ordered services (see Article 43) [2]. After that, there is in-progress monitoring and a follow-up inspection, as detailed in Article 51 [2]. The former includes tracking a control list. If a supplier fails to fulfil their service obligations, the structural department shall send a report to the MoD Department for Pre-Action and Legal Work detailing the number of incomplete services, reasons for failure to complete the services and measures taken to resolve the situation. The MoD Department shall take measures to protect the MoD interests. Sanctions are mainly imposed in the form of contractual fines, as detailed in Article 34, Clauses 6-9 [1].

According to Article 56, the follow-up inspection is done by checking and auditing the structural departments of the MoD [2].

In November 2018, the MoD merged two departments – the Department for Pre-Action and Legal Work and the Legal Department – into one that has to handle all cases of suppliers failing to provide services [1]. The official webpage for this department does not publish any relevant information [2]. According to an interview with the head of the eliminated Department for Pre-Action and Legal Work, the MoD department is able to receive and scrutinise all information on the delivery of service [3].

The MoD does not provide any information on contract failures or modifications – such cases may only be tracked by monitoring court practice. Minister of Defence Decree No. 2350 does not mention anything regarding the MoD’s obligation to publish contracts, their modifications or service delivery reports [4].

According to Minister of Defence Decree No. 2350, the structural department, authorised by the Minister of Defence, shall check the fullness, accuracy and fairness of the supplier’s submitted report on the provided services and track a control list for each contract [1]. There is no evidence, however, that a separate verification of performance appraisal takes place.

If a supplier fails to fulfil their service obligations, the structural department shall send a report to the MoD Department for Pre-action and Legal Work detailing the number of incomplete services, reasons for failure to complete the services and measures taken to resolve the situation [1]. The MoD department also takes legal measures to protect the MoD’s interests in arbitration courts [2]. The follow-up action, such the official confirmation of the breach of a contract, is made by the court and upon the order of the Federal Antimonopoly Service [3,4]. Source 3 demonstrates what happens in practice. In the Russian region of Udmurtiya, a company failed to provide services to the military ordering party and the company’s head was disqualified from holding senior positions. Source 2 also refers to real cases from the MoD Legal Department’s work. For example, the MoD Legal Department checks and registers the list of unconscientious contractors that fail to provide accurate or full information. There is not any proof that a separate verification of performance appraisal takes place.

According to Minister of Defence Decree No. 2350, if a supplier fails to fulfil their service obligations, the structural department shall forward a report to the MoD Legal Department [1]. The latter takes measures to protect the MoD’s interests in court [1]. In addition, the Federal Antimonopoly Service may launch an administrative investigation if the contractor fails to fulfil their contract obligations [2].
There is no way of checking how many breaches of contracts are acted upon, because neither the MoD nor the FAS reports such cases as its own category. One can only search and check separate court decisions [3] under relevant Articles of the Administrative Code, including Article 14.55.2 [2]. Also, it is impossible to check the fulfilment of contracts for classified items or services.

According to our sources, there are internal policies and regulations (defined procedures) that outline how to monitor and report on contractor service and deliverables. In general, there is little public awareness surrounding tenders, contracting and other procedures within Saudi defence procurement processes. The procedures do not include sanctions (1), (2). According to an official Saudi press release, the GAMI’s targets will include, “Establishing monitoring mechanisms for the military industry sector and its complementary industries and following up their application” (3). However, no further information is available relating to the specific nature of these mechanisms, or how the GAMI will enforce them. Further, there is no publicly available information regarding the body’s activities to date, and it does not appear to have commenced operations based on its lack of a public online profile (the majority of media coverage surrounding the body has thus far related to its initial establishment).

According to our sources, there is no transparency or information released by the Saudi government surrounding reporting and delivering procedures. Other sources report, that reporting and monitoring is a superficial routine bureaucratic mechanism. In some rare cases, these reports are sen to the office of the crown prince and the MoF (i.e. arms deals and 100 million+ deals) (1), (2).

A large proportion of Saudi defence contracts are government-to-government agreements, which are administered by US and UK civilian defence officials stationed at the Saudi Ministry of Defence. For several years, a number of large contracts between UK companies and Saudi Arabia have been overseen by the UK Ministry of Defence. For example, the UK’s Ministry of Defence Saudi Armed Forces Projects (MODSAP) is responsible for fulfilling the UK government’s obligations under the contract and ensuring that the requirements of the Saudi government are met (3). This includes management and administration of offset programs. The UK government’s Saudi Arabia National Guard Communications Project oversees the eponymous military communications project in which GPT Special Project Management Limited, a subsidiary of Airbus, is supplying the Saudi Arabian National Guard, in a contract reportedly worth USD 2 billion annually. The Saudi government reimburses the costs of these UK civil servants and military personnel. However, neither MODSAP or SANGCOM or any other relevant defence project management bodies make their reporting public, and it is unclear whether the results of their reporting are made available to any oversight agencies.

At the same time, there are major doubts cast on the probity of reporting and monitoring procedures of these outsourced bodies that are overseen by the UK MoD. Notably, in August 2012 the UK Serious Fraud Office began a criminal investigation into GPT concerning SANGCOM after a whistleblower made allegations of illegal offshore payments made to subcontractors on the SANGCOM project. In 2015, a UK tribunal upheld the MoD’s decision to refuse to release information under the Freedom of Information Act about its oversight of the SANGCOM project on the grounds that it would cause ‘real and significant harm’ to UK-Saudi relations (4).

Sources report, the procurement department has an in-house reporting and monitoring mechanism of defence contracts. However, they do not perform all parts and types of internal monitoring and reporting, such as subcontracting. Additionally, there are no external independent mechanisms of oversight to ensure a contract’s completion (1), (2).

There are no known cases of breaches in Saudi defence contracts; however, according to our sources, violations of contracts are usually solved informally between the suppliers and the MoD personnel, especially commanders (1), (2).

The MoD has a developed internal regulatory framework for monitoring and assessment of contract execution (Rulebook regulating public procurement procedure in the MoD and SAF and Rulebook on material resource management) [1, 2]. Delivery is done in the presence of commissions, which are established ad hoc for each contract and responsible for verifying the number of delivered goods. Quality of the delivered goods is scrutinised by Military quality control unit attached to the Sector for Material Resources of the MoD [3]. New arms and military equipment units are tested in the Technical Testing Centre [3]. Qualitative and quantitative checks of delivered services and works are regulated by functional coordinators, depending on which unit is the recipient of services and works [3] (functional coordinators are organisational units coordinating specific functions in the defence sector, such as logistics, research & development, equipment of the armed forces, etc.).
The Public Procurement Law (PPL) obliges contracting authorities to collect data on implemented procurement procedures and signed contracts. Furthermore, they are requested to submit quarterly reports to the Public Procurement Office. These reports are required to include information about modified contracts and contract execution [4]. On the other hand, reports on contracting in the field of defence and security are prepared annually and submitted to the government and the select parliamentary committee [5]. These reports are less detailed and not required to contain any information about contract execution. MoD and SAF internal regulation (also applying on procurement in the field of defence and security exempt from the PPL) additionally demands preparation of quarterly reports on contract execution, which should comprise description of contract execution process, the final figures on expenses made in the framework of individual contracts, information about noticed problem in delivery and, if possible, proposals for improving contract execution practice [6].
Complaint process for inadequate quality or quantity of delivered goods, services and works is foremost proscribed in procurement contracts and the Law on obligations [7]. Contract formation and contract cancellation are generally regulated by the Law on Obligations [8]. Furthermore, the PPL declares that contracting authorities may request in tender documents that bidders submit so-called financial security instruments (e.g. bank guarantees, mortgages, insurance policies, etc.), which are redeemed if the selected bidder (supplier) fails to fulfil their contractual obligations. When procuring goods and services worth over 250 million dinars (approximately EUR 2.1 million) and works worth over 500 million dinars (approximately EUR 4.2 million) contracting authorities are obliged to request financial security instruments [9].

Contracting authorities are not obliged by law to publish public procurement contracts, but they do have to publish notifications of signed contracts up to five days after signing [1]. In the case of a contract modification, contracting authorities are requested to publish the decision on contract modification and to report about it to the Public Procurement Office and the State Audit Institution [2].
An overview of 43 randomly selected cases of contracting implemented through negotiation procedure without an invitation to bid in the period from January 1, 2016, and March 1, 2018, shows that notifications of contract signing were not regularly published. They are missing in 21 cases [3]. In only four cases notifications of contract modifications were published, but it remains unclear whether these were the only cases in the sample when contracts were modified or such notifications were not published in some other cases. In two of the modifications (the contract was modified twice in one of them), the procured good was ammunition, and the reason cited for modification was that testing and/or delivery period had to be extended due to force majeure. Concrete circumstances were not elaborated [4, 5, 6]. In the third case, the reason for modification was a failure to correctly calculate ancillary expenses before the contract signing [7]. All three cases where notifications of contract modification were published are cases of public procurement in the field of defence and security, in accordance with Article 127 of the Public Procurement Law.

The MoD regularly publishes quarterly reports with tables presenting signed contracts, cancelled procurement procedures, contracts modifications and contracts execution [1]. The table presenting contracts executions shows the delivery date, contract value and actual value of procurement, as well as reasons for any deviations from the contract that occurred in the execution phase. Nevertheless, this reporting is quite scant: reasons for deviations are very brief (typically in one sentence), and there is no further performance appraisal.
The MoD’s regulations do instruct units which conduct procurement to monitor the quality of service delivery and assess it in internal reporting. However, it remains unclear from normative acts how these assessments are supposed to be further used even within the defence system. Apart from notifications of contract modification and quarterly procurement reports, the MoD does not publish any further data or report summaries related to contract execution phase of public procurement. Reports submitted to parliamentary Defence and Internal Affairs Committee do not entail information about challenges or lessons learnt in contract execution [2].

There is not enough information to score this indicator. With respect to public procurement, financial security instruments are used as remedies in cases of breaches of contract. Data for 2017 indicates that in one case the MoD activated a financial security instrument, i.e. redeemed a supplier’s promissory note as compensation for failure to provide the contracted goods [1]. The Law on Obligations further regulates contract cancellation and allows for one party to demand compensation. However, there are no publicly available data about court litigations. It is unclear whether tenders and contracts signed in procurement in the field of defence and security and that are exempt from the law include any instruments to remedy breaches of contract. The fact that contracts are entirely classified and no basic information such as notifications on contract awards or contract modifications is published makes it difficult to detect if there are any breaches. Looking back at the only realised arms procurement since 2015, procurement of two Mi-17 helicopters, its delivery was initially announced for the end of 2015 [2], but finally implemented in June 2016 [3]. However, apart from high officials’ statements, there was no information about the basic content of the contract, and it is not known what the agreed delivery deadline was. Similarly, there has been inconsistency in the information provided by high political and military officials about the timeline and planned outputs of modernisation of six Mig-29 fighter jets [4]. The planes were donated by the Russian Federation, but Serbia is paying for their overhaul and modernisation.

There are a robust set of policies and procedures that provide guidance on monitoring a supplier’s delivery and/or service obligations. These include guidelines on bid selection as well as provision for sanctions and/or recovery should contractual obligations fail to meet requirements [1, 2, 3].

Details of contractual obligations and/or modifications are not released to the public. However, it can be assumed that external auditing agencies such as the Auditor-General’s Office (AGO) have been provided with sufficient access to discover any potential issues in defence procurement activities [1, 2].

There are structures in place to monitor contractors’ obligations, e.g. Contract Management Offices, dedicated Contract Managers to manage contracts established by MINDEF/SAF etc. Part of the Contract Managers’ responsibilities are to monitor and track the KPIs of the contracts, where applicable. There are also periodic meetings and management forums to surface and discuss contract management issues. [1]

There is usually no public disclosure of contract monitoring and completion reports.

Contractual breaches are investigated and addressed via a robust set of internal audits as well as an independent auditor [1, 2]. The government has also released documents on what it constitutes breaches in a contract [3]. Breaches flagged up by external auditing agencies have been publicly acknowledged and addressed by the MINDEF [4].

The Defence Acquisition Handbook (DAHB) 1000 [1] provides a detailed process for monitoring and assessment of supplier obligations and meeting specifications (for acquisitions) [2].

Armscor is responsible for monitoring supplier compliance during the run time of an acquisition contract, and reserves the right to both terminate the contract early and claim penalties based on non-compliance with both the contract’s terms and Armscor’s general contract conditions [3]. As a contractual matter, any subsequent disputes would be handled via South Africa’s civilian courts.

Contracts are made publicly available via the Armscor tender bulletin. They include details on the contractor award date, but they do not strictly name who won the award or whether the sub-contractors have changed [1].

For acquisitions, contract monitoring is undertaken and the relevant reports are produced, including performance appraisals. Procurement, however, is less reliable, and largely similar in monitoring and evaluation to that of civilian tenders, which are sporadic [1, 2].

Broader issues of fraud and corruption are detailed in terms of specific cases prosecuted and their results through the Department of Defence (DoD) Annual Report, but it is unclear whether these also encompass the enforcement of contracts [1].

The Act on Contracts to Which the State is a Party outlines how to monitor, assess and report on a supplier’s service. It includes sanctioning procedures for incomplete service delivery. Article 74, which contains penalties for delays, states that contractors who fail to deliver a service on time will be required to pay fines in cash. [1] [2] Those who do not comply with agreements are not allowed to participate in bidding for up to 2 years, according to Article 27 the Act Contracts to Which the State is a Party. [2]

While there is a clear policy which requires the public disclose of information on contracts via the Government Electronic Procurement System or the Defence Acquisition Electronic Procurement System [국방전자조달시스템], detailed information regarding contract modifications is not publicly available. [1] [2]

Contract officials should produce contract monitoring and completion reports to ensure proper performance of a contract, according to Article 13 of the Act on Contracts to Which the State is a Party. It includes suppliers’ performance appraisals. However, the Act does not specify how often the contract should be published. Article 15 of the Act states that payment only can be made when the contract is sufficiently completed based on monitoring and completion reports. [1]

While some contractors have been charged with bribery, most breaches of contract are adequately acted upon. Article 74 of the Enforcement Decree of the Act on Contracts to Which the State is a Party outlines penalties for delayed service delivery. If a defence supplier fails to deliver a service on time, a fine of 0.075% of the delayed contract amount per day will be imposed. There is evidence of suppliers being punished with fines. [1] One contractor was not able to meet the intended deadline because a gearbox that they produced was not approved by the defence institution. This company was punished with a fine of 150 billion won (approximately £100 million). [2] These cases are not generally referred for further external scrutiny, such as to the BAI or to a parliamentary committee.

Policies for monitoring, assessing and reporting on a supplier’s service and delivery obligations are outlined in the procurement act. They mostly focus on evaluation conditions in the pre-contract phase. That is to say, criteria that the service provider must meet before being awarded a contract: technical, environmental, and legal requirements [1]. Others include the evaluation of operating and maintenance costs [2]. However, there is no language on monitoring or assessing a supplier’s process of service delivery after being awarded/during a contract. Section 81 discusses sanctions for failure to comply with the terms of a contract by suppliers. But the section does not clearly state if the sanctions are for offenses for incomplete or inadequate delivery of services [3].

According to the procurement act, when a contract comes into force, the Procuring Entity shall “promptly publish notice of the Award, of the Contract, specifying the name(s) of the Provider(s) or contractor(s) to which the Contract was awarded and, in the case of Contracts, the Contract Price.” [1]. In this respect, there is transparency. All these are accessible to the public according to the act. Nevertheless, a thorough review of the procurement act reveals that it is silent on post-contract modifications that could reveal changes in beneficial ownership or additional costs.

Although by law procurement departments are obliged to have an evaluation committee, the role of the committee seems to be restricted to evaluating contracts prior to their being awarded [1]. Thus, post-award monitoring as stated in this indicator is not articulated in the act. Furthermore, there is no publicly available information that shows that authorities regularly produce contract monitoring and completion reports that track progress or lack of therein in implementation [2]. As such, this indicator is not scored and is marked ‘Not Enough Information’.

There is no publicly available information regarding the breaches of contracts and the enforcement of monitoring practices. It is therefore not clear whether breaches of contract are acted upon. Sources contacted for information have not been forthcoming. The procurement act largely focuses on the processes that need to be undertaken prior to the award of a contract. It’s major weakness lies in the fact that it fails to articulate what needs to happen post-award, especially around the area of enforcement.

Ministerial Order 43/2019, approves the specifications of particular administrative clauses, and model-type that must govern the contracting of works, supplies, and services through the application of open, restricted, and negotiation procedures, as appropriate, within the scope of the Ministry of Defence [1]. These specifications are detailed for each type of contract and type of work in a series of documents on the site for Public Contracts, on the Ministry of Defence’s website [2]. Instruction 72/2012 regulates the process of obtaining weapons and material, and the management of its programmes determines the development of the execution and service phases of the process, the management of the weapons and material programs, and the procurement processes associated with the maintenance and replacement of certain existing resources and expendable material [3].

On reporting and monitoring, Instruction 72/2012 says that the chief of the programme is the responsible of the follow-up of the activities, and shall elaborate the planning and risk management plan at the onset of the programme, and s/he is responsible for keeping them updated. The technical director is the responsible person for the follow-up and control of the technical aspects of the contracts. The chief of the programme shall send follow-up semestral reports, as described in Instruction 67/2011, of 15 September, of the State Secretary of Defence. The risk management plan must be presented at least twice a year in advance to the calls by the programmes’ follow-up comissions, regardless of whether the programmes do or do not have such comissions. The follow-up of the programmes is made in contrast to the documents that the contractor must elaborate, which include, at least, the plannings for the contract; the quality; the risk management; the reporting; and verification, validation, or testing. [3] However, no sanctions are specified for cases in which the contractor produces inadequate or incomplete delivery.

Many contracts (and their potential modifications) are not publicly available, including contracts negotiated without publicity and others whose information is kept confidential. As statedpreviously, most contracts are negotiated privately for several years. However, the specifications of the contracts clearly state that any modification post-award must be agreed upon with the contracting body. They also specify that any change in sub-contractors must be explained in writing. The specific administrative clauses per type of contract and type of work are available on the website for Public Contracts in the Ministry of Defence’s website [1].

The National Commission of Markets and Competition (Comisión Nacional de los Mercados y la Competencia (CNMC)) has highlighted a problem in Spain regarding contractual modifications, not only in the Ministry of Defence but in public contracts in general. This entity stated that there is no public information on these modifications, “and this makes it impossible to know the final price that the Administration pays for the corresponding work, service or supply” [2].

It is not publicly known what information oversight agencies receive.

As stated by the Ministry of Defence, “the Ministry of Defence does not carry out periodic reports on the monitoring and termination of contracts, nor are there evaluations of the performance of suppliers and subcontractors. In accordance with the provisions of Law 9/2017, of November 8, on Public Sector Contracts (LCSP), the contracting bodies must designate a person responsible for the contract who will be responsible for supervising its execution and adopting decisions and issuing instructions necessary in order to ensure the correct performance of the agreed provision, within the scope of powers that they attribute. In works contracts, the powers of the person responsible for the contract will be exercised by the Director. In addition, in framework agreements, centralized contracts and in the main equipment acquisition programs, the so-called Special Modernization Programs, it is usual that the contracting strategy foresees the creation of commissions to monitor the contract or the complete acquisition program, these commissions are convened on a biannual or annual basis” [1].

The specific administrative clauses for contracts are available on the website for Public Contracts on the Ministry of Defence’s website [2]. Instruction 72/2012 regulates the process of obtaining weapons and material and the management of its programmes, it also determines the development of the execution and service phases of the process, the management of the weapons and material programs, and the procurement processes associated with the maintenance and replacement of certain existing resources and expendable material [2]. This instruction comprehensively regulates monitoring, including the writing of a follow-up report every six months by the head of the programme (Section 11.3). And Section 16.f proposes “particular administrative clauses,” “the criteria for cancellation of the contract in case of not achieving the expected results during its execution” [3].

On potential breaches of contract, the Ministry of Defence states that: “the contracts must be executed in accordance with the provisions of the Specific Administrative Clauses and Technical Prescriptions. These specifications provide penalties for non-compliance, defective compliance or delays in deliveries or services, as well as the causes for termination of the contract. Each contract has its own vicissitudes that are recorded in the files. As provided by the LCSP in its article 192 and following, partial non-compliance, defective compliance, delay in execution may give rise to the imposition of penalties, the termination of the contract and, where appropriate, the demand for damages. In addition, the breach of the main obligation of the contract will be cause for its termination” [1].

There is not enough information to score this indicator. Information regarding breaches of contracts is not publicly available. There is only anecdotical evidence of a law in Spain opening the door to publicity of sanctions, but this is optional, anecdotal, and in general related to the environmental domain [1]. It is not expected that anything similar may arrive to the defence sector, and obviously companies are not interested in disclosing their breaches of contracts [1]. There is no evidence either about any public reporting on statistics of breaches or any other similar information. The only independent external audit (the Court of Audits) has rarely referred to concrete breaches of contracts. One exception is the reference to breaches of contract by the state-owned Navantia regarding the PEA (Special Armament Programme) on BAM (Buque de Acción Marítima, or Maritime Action Vessel). The Court of Audits stated that “the total amount of penalties recognized by the Navy and not required from NAVANTIA, amounts to € 31,746,000” [2]. The Navy argued that the process was not finalised and Navantia had no opportunity to explain the breaches [2, 3]. It is likely that this is not an exception, as “almost all of the [Special Armement] programs have experienced variations in their three basic parameters: costs, deadlines and requirements” [4].

According to an evaluation by the Secretary of State for Defence, “the contractors have acquired excessive power as a result of the limited control exercised by the Ministry”, “delays and cost overruns are common, even going so far as to breach the requirements [for manufacturing the contracted systems], without this dynamic implying a requirement of responsibility and debugging it ” [5]. When expressly and repeteadly asked about the number of contracts not sufficiently completed in the last three years and about the measures taken for breaches in contracts, the Ministry of Defence anwered once that “regarding the information on the number of contracts that have not been sufficiently completed, these reports are not prepared within the Ministry of Defense, so it is not possible to provide consolidated information or data”, with no further suggestion or reference to where that information could be found. In other cases the questions were simply not answered [6]. Similar questions regarding numbers on the breach of contracts and related consequences, and where to find/ask for the necessary data were not answered either in an interview by email with the Ministry of Defence [7]. Some experts interviewed agreed with no exception that they did not know where to find such information, whilst expressing their belief that this is information is not actually available. Given the lack of conclusive evidence on this issue, this indicator is not scored and is marked ‘Not Enough Information’.

A review of Sudan’s Public Procurement Act and the websites of the Ministries of Defence, Interior and Finance did not yield any evidence of formal policies or procedures that outline how a defence sector supplier’s service and/or delivery obligations should be monitored, assessed and reported upon [1,2,3,4]. Sudan’s Auditor General could theoretically audit any activities conducted by any of Sudan’s government entities, including the armed forces that are formally integrated into the government. However, the fact that so many paramilitary forces have operated exclusively or mostly outside the formal structures and budgets of the armed forces renders the Auditor General’s office incapable of assessing and monitoring contracts [5].

The task of the transitional government’s Empowerment Elimination, Anti-Corruption and Funds Recovery Committee is to remove Bashir’s cronies, who used their positions to corruptly amass personal wealth, from office and to seize that wealth and turn it over to the state. This is not an independent overight commission with a broad remit, but rather a narrow and politically motivated entity and exercise. Committee members are drawn from the Ministries of Interior, Finance and Justice, the Central Bank, the SAF, the GIS, the RSF, government militia, the FCC and leaders drawn from localities at the state level [6]. Notably, a Freedom House report published in 2020 explained that some members of the former regime still hold positions in the transitional government and have not been subject to disempowerment or confiscation of resources – including ‘senior security officials who sold the services of their troops to foreign powers for use in the ongoing civil war in Yemen’ [7]. The International Budget Partnership’s 2017 Open Budget Survey for Sudan scored Sudan’s transparency 2 out of 100, its public participation 0 out of 100 and its budget oversight 31 out of 100 [8]. Sudan’s security and defence activities are exceptionally secret and opaque.

The high level of opacity in the award of Sudan’s defence sector contracts inhibits any efforts that ministries might make, or that civil society and the media do make, to report on contractors’ activities and performance. If any reports have been completed by either the procuring entities or by the suppliers, they do not appear to have been made public; the websites of the Ministries of Defence, Interior and Finance do not reveal any information about contract monitoring or reports [1,2,3]. Civil society organisations and the media have faced great difficulty in tracking down defence sector transactions and providing verifiable information about their activities. Besides, doing so is perceived by the would-be reporters as risky, as evidenced by the threats and violence experienced by people who have undertaken such endeavours in the past. The U.S. Department of State’s 2018 Investment Climate Statement on Sudan refers to Sudan’s contract awards system as ‘opaque’ and comments that the Department could not find any information concerning which agencies review transactions for competition-related concerns [4].

Since Sudan’s Ministries of Defence, Interior and Finance [1,2,3] are not involved in and generally have no visibility into defence sector procurement activities undertaken by the country’s armed forces [4], these ministries’ procurement offices do not – and arguably cannot – monitor or report on contractors’ delivery of obligations or performance. The U.S. Department of State’s 2018 Investment Climate Statement on Sudan refers to Sudan’s contract awards system as ‘opaque’ and comments that the Department could not find any information concerning which agencies review transactions for competition-related concerns [5].

It is not clear whether breaches of contract are acted upon in Sudan’s defence and security sectors. A review of the websites of the Ministries of Defence, Interior and Finance did not yield any evidence of Sudan’s government acting to address breaches of contract in the defence or security sectors [1,2,3]. It is likely that breaches of contract would be acted upon outside of formal channels of justice.

Sweden adheres to the European Commission’s Security Procurement Directive [1] which states that staff working in procurement must be able to ensure that defence contractors meet their reporting and delivery obligations. However, the resolution does not outline any procedures for sanctioning incomplete or inadequate service delivery. In addition to not being in place in the EU directive, Sweden has not itself adopted any additional national regulation enforcing timely delivery.

As noted in Q58B and Q61A, detailed information in the post-award stage of the procurement cycle – including data on total value, winning bidder, and contractual modifications – has been frequently and systematically lacking in Sweden, and oversight bodies seem to receive limited information on contract failures and/or modifications [1] [2] [3].

FMV’s procurement process follows eight steps, as outlined on their website [1]. The 8th and final step is vaguely described as ‘follow-up of contract adherence’ which suggests this to be a routine part of the procurement cycle in line with EU regulation. It can be questioned, however, how consistently or stringently these and other steps are followed (see Q58B, Q61, Q63). There is no evidence that FMV officials produce reports as part of this 8th step, nor do they release any other information on how supplier and subcontractor performance is assessed, or on how breaches of contract are handled.

There is not enough evidence to score this indicator, as such it is marked ‘Not Enough Information’. Sweden appears to consistently follow the European Commission’s Security Procurement Directive [1] which addresses procedures for breaches of contract at length. External scrutiny may also be provided by the Swedish National Audit Office (NAO) and Competition Authority (KKV). However, there is not enough evidence to determine how breaches of contract are acted upon.

Article 9 of the current Bundesgesetz über das öffentliche Beschaffungswesen (BöB) opens up the possibility of qualification criteria. Article 10 sets out a verification system (“Prüfsystem”) for such criteria, and Article 11 lays out reasons for exclusion or retraction [1]. Article 10 of the Ordinance on Public Procurement (VöB) details rules if a verification system is established. The article specifies the content (qualification criteria, duration of validity) as well as how it should be published. Article 11 is on how the register of approved suppliers is established [2]. The revised BöB contains a more detailed catalogue of exclusion or retraction criteria (Article 44). It also contains sanctions in case of non-fulfilment of obligations according to Article 44 (Article 45 revised BöB) [3]. Article 25 of the revised BöB tasks the Beschaffungskonferenz des Bundes (BKB) with maintaining a list of suppliers that have been barred as a sanction [4]. However, the assessor could not find any further information regarding this monitoring process and the relevant authorities were not forthcoming with this information when asked.

The current, as well, as the revised BöB, prescribes the publication for the open and selective procedure including accepted bids (Article 24 BöB and Article 48 revised BöB) [1, 2]. There appears to be no obligation of publishing full contracts. The revised BöB allows for changes before award (Article 39 BöB). Neither the current nor the revised law foresee changes post-award. Because of commercial secrecy contracts are not published [3]. More information regarding oversight agencies was not available; Armasuisse officials interviewed were not forthcoming with this information.

Officials regularly review contracts and follow-up on the current state of delivery. There are twice a year a meeting with the supplier to ensure delivery that act as apraisals. Sometimes on-site inspections are conducted. According to an armasuisse official this system allows for early detection of potential breaches of contract and no such breaches have taken place. [1]. Armasuisse has ISO 9001 certification [2], which certifies the organization has met standards for a quality management system and that the system is appropriate and effective for its activities [3].

Breaches of contract are very rare and are followed up on immediately. This can be attributed to a close follow-up with the suppliers and regular monitoring [1]. Armasuisse has ISO 9001 certification [2], which certifies the organization has met standards for a quality management system and that the system is appropriate and effective for its activities [3]. The Swiss Federal Audit Office (SFAO), the Security Policy Committee (SPC), as well as the internal audit of the Federal Department of Defence, Civil Protection and Sport (DDPS), can review issues [4, 5, 6].

Formal policies and procedures that outline how to monitor, assess and report upon a supplier’s service and or delivery obligations are well defined by the Public Construction Commission of the Executive Yuan [1, 2]. Details including resolution or sanctioning procedures for incomplete or inadequate service delivery are made public [3, 4]. Regulations devised by the Public Construction Commission also apply to defence and security procurements contracted out by the MND [5, 6].

All government procurement contracts are supervised and regulated by the Public Construction Commission (PCC). All information from the notice of open tender, tendering process, contract awarding, contract execution, all the way to auditing and close of contract, are released on the website of PCC. [1]

Contract amendment shall be implemented and supervised by the “Table of Regulation of Approval, supervision, and reference of contract amendment or markup/ markdown” and “Essential Requirements for Procurement Contracts”. [2, 3]

Oversight agencies, such as Procurement Control Unit, National Audit Office, and Control Yuan, have rights to scrutinize and review contract information, quality of product and service delivery. [4]

As for FMS contracts, they are classified as secret items until the Defense Security Cooperation Agency (DSCA) release an announcement after the sale is approved by the State Department of United States. Thereafter, the contract can be published on the e-procurement system. [5, 6]

Chapter V of “Government Procurement Act” sets the legal framework and obligations for inspection and acceptance of contracted works, products and services. Inspection and acceptance shall be conducted by an appropriate chief inspector, who is appointed by the head of the entity. Contracting entities may also conduct partial acceptance.
Results of inspection are documented in “Certificate of Settlement and Acceptance” and related records. In case of non-conformity supplier shall be required, by a notice, to make improvement, to remove the rejected item, to re-do the work, to recall or to replace the rejected item within a time-limit. The entity also charges the supplier for the amount of liquidated damages of delay by the contract. If the supplier doesn’t improve the error, the entity can terminate, or rescind the contract and debar supplier from public procurements by official notice in the Government Procurement Gazette.
Provisions of in the chapter do not set up any specific obligations for contract monitoring or inspection of subcontractors. [1, 2]

There are routines and SOP for Taiwan’s military to send out delegations for on-site inspections and monitoring of armament procurements from either domestic or foreign suppliers [3, 4.] Progress reports covering specifications and performance are produced. As we have learnt from the failure of the navy’s Minesweeper Programme, there is space for the MND to advance and upgrade its capacity of due diligence for inspections and monitoring [4, 5]. Progress reports covering specifications and performance are produced. However, delays and failures in several armament procurement projects indicate that there is insufficient or ineffective monitoring of breaches of contract [6].

Breaches of contract are acted upon in accordance with the “Government Procurement Act” and the “Audit Act” [1, 2, 3]. Issues are either dealt with internally or raised with higher management in the MND, Executive Yuan, or CY depending on the budget size and executive hierarchy [2, 4, 5, 6].
Suspicions on breaches of contract involving high-ranking military officers may raise doubts on effective enforcement, even if prosecutors were unable to collect enough evidence to charge the officer. [7, 8].

It is not clear from available documentation from the Public Procurement Regulatory Authority if generic policies and procedures are available. There is no evidence of such policies and procedures in the defence and security sector. [1] [2]

There is no evidence of contract award, terms, or modifications being made available by the government. This follows a review materials from the Public Procurement Regulatory Authority, the Tanzania People’s Defence Forces, and the Ministry of Defence. [1] [2] [3]

Monitoring of all public procurement is vested in the Public Procurement Regulatory Authority. Based on its monitoring, it may send cases to the Prevention and Combating of Corruption Bureau for further investigation. [1] The Controller and Auditor General also has a mandate in this area. However, the Public Procurement Regulatory Authority reports contain nothing on procurement in the sector. Controller and Auditor General reports present selected cases of malpractice in tendering in defence and security, but they are minor. [2] [3]

There is not enough information to score this indicator. Given that contracts are not made public, and there is no public evidence of oversight from the Public Procurement Regulatory, it is not possible to assess enforecment.

According to Section 106 of the Public Procurement and Supplies Administration Act 2017, in order to ensure the efficiency of the consideration and selection of tenderers of proposals to become contractual parties with a state agency, including the MoD, the state agency must assess the work performance of the business operators participating in the procurement activity by primarily considering the business operator’s ability to complete contractual obligations. Any business operator whose assessment result does not fulfil the determined criteria shall be suspended from tendering a proposal to or concluding a contract with the state agency until its performance result fulfils the determined criteria. However, it should be noted that this law does not apply to items affecting national security or purchased by the government-to-government method [1].

According to Army Order 1249/60 on contracting and contract administration 2017, the head of each unit shall monitor the supplier’s service and/or delivery obligations and may suspend the supplier or impose sanctions for incomplete or inadequate service delivery [2,3]. Moreover, experts may be hired to assess the quality of the procured items if necessary or whenever requested by the Committee for Procurement under the Armed Forces [2]. However, since the Army Order was enacted in accordance with the Public Procurement Act, it is not applied to all national security purchases (some items procured through special methods such as the government-to-government method are exempted) [4].

In accordance with the Public Procurement and Supplies Administration Act 2017, Section 8, information on procurement and supplies administration must be systematically retained for the purpose of audits [1]. Correspondingly, the E-Procurement System was introduced by the Thai government in order to enhance and control transparency in the public procurement bidding process and qualified bidder selection. All relevant public procurement units are subject to E-procurement registration and procedures, including the defence procurement unit, except for items affecting national security or purchased by the government-to-government method [2].

The E-procurement system also includes the announcements of Terms of References (TOR) and the list of bid winners for each project or purchase, but post-award modifications are not always available [3]. According to the Ministry of Finance’s Regulations on Public Procurement 2017, whenever there is a contract modification, the procurement officer must report to both the head of the state agency and the procurement committee with the details of the TOR of the project, so that the quality of products and service delivery can be scrutinised, but the publication of contract failures or modifications is not required by law [4]. In other words, these details are relevant for military procurement, unless the purchased items affect national security or are procured by special methods such as the government-to-government method.

Additionally, the example of the GT200 scandal clearly shows that information on contract failures and post-award modifications is rarely released; Thailand’s technology ministry found in 2010, six years after the purchase, that the devices had a successful detection rate of just 20%, while the military claimed that the ‘fake’ devices had been tested and found working at the time of purchase, despite the impossibility of their usefulness [5].

According to the Guideline to Public Procurement and Supplies Management of the Ministry of Defence 2017, procurement officers are responsible for reviewing the bidders’ and contractors’ qualifications and supporting documents, such as invoices, with regard to the Terms of References (TOR). Then, they are obliged to prepare and submit reports to advancing the process of obtaining permission for procurement [1].

However, suppliers’ and subcontractors’ performance appraisals are verified by the head of the procurement unit, not the procurement officers. The head of each unit in the MoD has the authority to suspend or terminate the contract and to submit a report to the Commander-in-Chief of the Army [2]. According to the Guidelines for Contract Management, implemented by the military’s Office of Internal Audit, the officials must regularly submit contract monitoring and completion reports to the State Audit Office every quarter; this includes reports for defence items [3]. However, it is clear that the officials did not conduct some reports on a regular basis, as demonstrated by the case of GT200 scandal, where officials turned a blind eye to the fake bomb detectors for six years and even claimed that they ‘used to be’ working [4].

Ideally, according to the Public Procurement and Supplies Administration Act 2017, the failure of a government agency to use a standard form or comply with the OAG’s recommendation to scrutinise a contract could render the contract void and unenforceable, if such a failure or refusal are material or serious mistakes in the view of the policy committee [1]. However, despite attempts to reform the public procurement system, Thailand still has a weak level of integrity in public contracts as well as vulnerable procurement monitoring and control practices. Some common problems include irrelevant information in the public procurement announcement with regard to the public contract documents, misconduct by public procurement officers or the public procurement committee regarding government regulations, favouring of certain contractors and bidders in public procurement contracts and uncompetitive bidding, carried out by falsifying documents and defining false criteria and conditions in an attempt to complete public contracts [2].

Some formal policies and procedures outline how to monitor supplier’s services or delivery obligations. To ensure the contract holders respect this clause, the specifications provide for a system of sanctions, in the form of penalties for delay and, where appropriate, financial penalties attributable to the holder of the contract, and determine the modalities of their application (1). There are two categories of termination by the public purchaser:
1. The termination of the right that occurs in cases of death, physical disability or bankruptcy of the holder. However, the public purchaser can accept the offers made by the heirs, creditors or the liquidator, to avoid recourse to a new market procedure.
2. Termination following a contractual fault; this fault, triggering the termination, consists, on the part of the holder of the market, not to fulfill its obligations, even after implementation remains by the public purchaser. This includes cases where the holders of the market have undertaken criminal activity, in contradiction with the terms of the contract (2). The public buyer shall prepare a follow-up card after the completion of each general transaction. This follow-up card includes information about delays, costs, termination, etc. (3). The Decree n° 88-36, dated 12 January 1988, ‘Special Procedure of Control of Expenditure of the Ministries of Defence and Interior’ and structures in charge of prisons and re-education dependent on the Ministry of Justice, does not detail reporting policies and procedures (4). According to our sources, there is a mechanism that is well defined and in service, but it does not include aspects such as reporting time, reporting procedures, evaluation, and the quality of the service (5,6).

According to our sources, contract information on contracts, (failed or not failed) are not published or made available for the public. Post-award of Ministry of Defence procurement is confidential, and follows a status quo of confidentiality of military information. (1,2)

According to our sources, there is an M and E mechanism in place and reports are produced by officials. These reports can be annual, or bi-annual (1,2). Officials regularly produce contract monitoring and completion reports. The procurement committee within the Ministry of Defence issued 164 evaluation reports, 55 annexes, 150 final closings, and 1 annual procurement plan (3). The content of these reports is however not publicly available (4,5,6).

According to our resources, breaches of contract are acted upon. Since 2013, there have been many cases where the breach of contract resulted in sanctions and in few cases exclusion from further bidding (1,2).

According to Article 52 of the Law on Public Procurement, in all public tenders, the technical evaluation criteria, which cover both economic and financial capabilties as well as professional and technical qualifications, shall be set in accordance with the criteria specified under Article 10 [1]. Interviewee 4 suggested that there are some formal policies and procedures but that these do not address all best practice monitoring activities [2].

In addition, Interviewee 6 suggested that all bid and tender meetings are recorded with cameras and kept for 10 years in the Ministry of Defence’s archives [3]. Interview 5 also suggested that the monitoring of procurement deliveries is more or less an established procedure because all deliveries are monitored and then accepted or declined, as regulated by the Regulation of Monitoring Procurement Deliveries (2002) [4,5]. The increasing number of exceptions limiting the scope of formal procurement rules in Turkey is widely cited by many scholars [6,7].

According to Interviewee 3, contract modifications post award are mostly publicly available when/if people who are interested apply to the local contracting office in charge of the tenders in person [1]. Some of those bids are available online [2,3,4]. He went on to emphasise that local contracting offices are mostly inclined to provide limited information to the bidders who participated in the tender. In practice, he underlined, it is not likely that a person or institution who did not participate in the tender will obtain proper information about the modifications of the tenders [1].Open-source research shows that the government’s Public Procurement Authority, the Ministry of Defence and the Force Commands share calls for tenders on their official websites, not tender modifications [2,3,4]. It is not clear what information oversight bodies receive from the contracting offices.

As explained before, the Public Procurement Law provides a good legislative mechanism enabling the Public Procurement Authority to monitor all public tenders, including those defence/security procurements that the Ministry of Defence has not defined as ‘classified procurements’ (please see Article 2(b) of the Law on Public Procurement) [1]. Furthermore, as emphasised before, the Ministry of Defence’s Financial Audit Department can get involved in any tender process if they receive a written appeal or if the Minister of Defence calls for an investigation.

So, as suggested by Interviewee 4, officials conduct some monitoring activities, but not on a regular basis [2]. Interviewees 5 and 6 agree with Interviewee 4, underlining that the legislative framework for tender monitoring through internal control mechanisms is strong in Turkey, but the monitoring mechanisms can only work effectively and efficiently when the Minister of Defence asks stubbornly and remains insistent/resilient in the rest of the process [3,4]. One should note that there is no evidence of any reporting/monitoring taking place for classified procurements.

Interviewee 4 suggested that most breaches of contract at the service command level are either dealt with internally or raised with higher management in the Ministry of Defence. However, according to him, breaches of contract at the SSB for major projects are political issues that are resolved at the presidential palace [1]. All other inteviewees unanimously agreed with this assertion [2,3,4,5,6]. Open-source research confirms the argument above, as there is not a single report on a case of corruption or integrity violation relating to a defence/security tender in the past two years. This suggests that is not clear whether breaches of contract are acted upon and it seems likely they are only done so internally.

There are policies in place on how to monitor, assess and report upon a supplier’s service and or delivery obligations. There are also sanctioning procedures. For example, Section 93(2) of the Public Procurement and Disposal of Public Assets (PPDA) Act [1], states that all providers of works, services or supplies shall be required to sign a declaration of compliance with those codes of conduct determined by the Public Procurement and Disposal of Public Assets Authority from time to time. It is expected that once a company is awarded a tender, it must deliver on the agreed-upon timelines.

Contract modifications after the award are not made public. Also, the relevant oversight committees of Parliament rarely get access to the most relevant contracts like arms purchases because these are hidden under the classified budget. Some MPs [1,2] queried why the classified budget is still huge when the country is not at war. One of the MPs suggested that part of this budget is normally used for political projects like the lifting of the age limit. Some contracts contained in the Procurement and Disposal Audit Report, Ministry of Defence and Veterans Affairs, Financial Year 2016/2017, [3], provided some insights into the challenges of acceptable best practices.

The Office of the Auditor General[1-2] , and PPDA[3] have been producing annual reports ( which are drawn from different contract specific reports). These reports are then used by the parliamentary committees[4] to compile their reports. These institutions make several recommendations, and the Treasury Memorandum is the best way to monitor their implementation. Specific monitoring and completion reports for each contract are undertaken at the end of the financial year which explains why they are part of the annual reports.

There is not enough information to score this indicator. Most of the contracts are closed to the Ministry of Defence and Veterans Affairs, especially the classified components [1, 2, 3]. It is not easy to know what is going on at the MoDVA. If there are breaches, they would only come to light quite late and only by a few people.

According to the Law, the MoD controls the quality of military goods produced by enterprises for the Armed Forces of Ukraine and exports, as well as food supplied to the AFU [1]. Some formal policies and procedures outline how to monitor, assess and report upon a supplier`s service and on delivery obligations [2, 3, 4, 5]. The MoD also developed a draft regulation on control of the quality of food for the AFU [6]. Contracts between MoD and suppliers provide that suppliers are obliged to replace sub-standard goods should this happen and that the supplier is obliged to pay fines should they deliver low-quality goods [7].
Additionally, military offices conduct an acceptance control of the quality of goods procured by the State Defence Order. There are no detailed procedures for quality control.

Classified procurement:
Contracts are not available since the corresponding goods and services constitute state secrets [1].
Non-classified procurement:
All contracts for non-classified procurement are available online on the Prozorro website [2]. However, the law does not demand to publish all post-award contract modifications and if such take place neither additional agreements nor modified contracts should be published [3], although sometimes the MoD does that [4]. The exception from this provision are purchases of goods worth 200,000 UAH and works and services worth 1.5 million UAH, all alterations of corresponding contracts shall be disclosed. At the same time, one can ask for those modifications through information requests.
Quality control is carried out internally by commissions involving a representative of the customer and the commission of the recipient (a particular military unit determined by the terms of the contract). To carry out quality control of goods and services received from enterprises of the defence-industry complex, the MoD places its representatives in them. The general management of these representatives is provided by the Office of Military Representations of the Ministry of Defence of Ukraine [5].

There is a procedure for officials to control contract completion [1, 2] which stipulates that special commissions should draft corresponding reports. To carry out quality control of goods and services received from enterprises of the defence-industry complex, the MoD places its representatives in them, and they monitor quality at all stages including development, production, modernization, supply, installation and repair [3, 4]. The MoD terminates contracts if they were not sufficiently completed [5]. Although Ukrainian legislation provides that military representatives control the quality of goods at all stages [4], it does not say anything specifically on the control of subcontractors.

There is evidence that the MOD makes efforts to react appropriately to the cases of goods delivered being of inferior quality [1, 2, 3]. According to the MoD contracts, suppliers pay 20 per cent of the contract value for the delivery of low-quality products [3]. An active AFU serviceman also mentioned during an interview that there were cases of military trucks being repaired by the supplier and brought back in good working condition. However, he also mentioned cases of goods being delivered to the AFU and not working [4]. The breaches of contracts had taken place within this research time frame (2016-2019). According to the interview of S.Poltorak, who was defence minister up to the middle of 2019, MoD adressed such cases in courts, won the cases and punished the companies that did not meet their obligations with fines [5]. Also, the MoD created a list of companies who failed to meet their obligations according to the law “About the peculiarities of procurements for the guaranteed needs of defence” [6]. This list helps to take such companies away from defence procurements.

Some mechanisms and procedures ensure that contractors meet their obligations on reporting and delivery. There is an internal auditing unit and a procurement unit that makes sure that contractors meet the requirements. There is a formal reporting procedure that must be followed, which includes reporting to commanders in case of incomplete delivery of purchases (1).

Despite the presence of formal procedures for the management of defence suppliers, there is a lack of transparency, as the information is confidential and is never published outside the procurement unit (1).

There are no monitoring mechanisms at all. Procurement offices do not conduct any reporting outside the delivery reports to ensure quantity and quality of the purchased goods. Thre is no a third unit or institution that could monitor or evaluate the reporting on or the delivery obligations in contracts (1).

There is little information, even for employees in the auditing units of the armed forces on whether actions are taken when contracts are breached (1).

There are formal policies and procedures that outline how to monitor, assess and report upon a supplier’s service and or delivery obligations. The Commercial Policy statement “Contract Management – the Commercial Role” provides internal guidance on planning, preparation and implementation of Contract management arrangements, with appropiate resolution procedures in place [1].

Research was also able to identify the existence of a training course on managing defence contracts, designed for military personnel and MoD Civil Servants [2]. It is worth noting that there is likely to be a huge number of documents and protocols relating to Contract management and reporting policies and procedures, many of which will not be in the public domain.

Research was not able to identify any publicly available data relating to contract failures and modifications post-award [1]. However, it is worth noting that in 2019 the government promised to publish KPIs for its most important contracts which the Cabinet Office began doing in 2020 [2, 3]. The published data includes information relating to major MOD contracts and assesses performance against pre-established KPIs, in order to track progress. However, there is no mention of any contract modifications in the latest data published for January-March 2013. It also appears that oversight bodies do receive some information on this issue, as they have recently scrutinised the performance of defence contracts [4, 5].

The Commercial Policy statement “Contract Management – the Commercial Role” [1] suggests that Contract monitoring and completion reports are produced for each Contract. However, it is not clear whether these include supplier and subContractors performance appraisals (which is separately verified), or if action is taken for breach of Contract if the Contract is not sufficiently completed.
In DE&S delivery achievement is monitored at Operating Centre, the Domain and ultimately pan-business level. There are regular Domain Performance committees where the CE holds the business area to account, formal customer and other KPIs that reflect delivery of the programme and other business metrics [2]. However, this monitoring focusses on DE&S performance itself rather than on Contractor performance.

The Commercial Policy statement “Contract Management – the Commercial Role” [1] has a separate section on breaches of contract, and states that “addressing poor performance is fundamental to the MOD getting value for money, and getting what we are paying for”. Project teams actively manage xontractor performance and training on xontractor Management is delivered by the Cabinet Office, in which 2,000 DE&S staff took part in 2020/21 [2].

There is also evidence of contractor management being subject to externals scrutiny by the NAO [3]. However, the NAO has underlined how, even when suppliers under-perform significantly, the MOD has been reluctant to remove them or take decisive action du to the knock-on effect of ‘resetting’ a programme. Equally under current regulations, the MOD cannot bar suppliers from future contracts unless it has removed them from a previous contract for poor performance [3].

The Defense Contract Management Agency has a number of policies on managing contractors, most of which are guided by the ‘Contract Maintenance’ instruction [1]. The instruction on contractor effectiveness provides guidance on how DCMA personnel should monitor contractors with regard to their ability to execute contractual requirements [2]. Within this instruction, there are a number of manuals which detail procedures for: implementing a risk assessment process; implementing a planning process for surveillance; standardised surveillance techniques; documenting surveillance [2]. The final manual, which covers documenting surveillance, provides clear instructions on reporting techniques and requirements [3]. The DoD measures a contractor’s past performance by means of performance assessment reports (PARs), which provide a record of performance on a contract during a period of time. PARs are compiled in the Contractor Performance Assessment Reporting System (CPARS) database (which is not available to the public) [4,5].

The Authorising Contracting Officer is permitted to temporarily withhold payment pending completion of contractual requirements [6]. It is also DCMA policy to ‘reject non-conforming products and services not fulfilling the terms and conditions of the contract’ [3]. However, there is no clear, publicly available guidance on whether the DCMA has sanctioning or resolution procedures for inadequate or incomplete service delivery. According to Part 4 of the FAR, the Senior Procurement Executive is responsible for developing and monitoring a process to ensure timely and accurate reporting of contractual actions to the Federal Procurement Database System (which has now been replaced by beta.SAM.gov). But this seems to be limited to actions relating to contract awards and modifications [7].

Full contracts are not published in either their original or modified state, and any excerpts from a modified contract are also not published. Information about contract modifications over the value of $7.5 million is announced on the defense.gov website every day after 5 pm. These announcements include details on additional costs, the original contract code, the updated order code and details of the modification order. No notices were found regarding changes of sub-contractor or change of beneficial owner but that’s not to say that they wouldn’t be published [1]. Contract modifications go through the DCMA, who provides internal oversight. Contract modifications are guided by DCMA Manual 2501-02 [2]. The DoD OIG evaluates the DCMA, however, no specific reports relating to the DCMA management of contract modifications were found [3]. It is not clear whether contract modifications are reviewed by external oversight bodies such as the Armed Services Committee or the GAO.

In 2017, the DoD Inspector General released a summary of a series of reports assessing how effectively the DoD tracks the performance of its contractors. These reports found that the information stored on the Contractor Performance Assessment Reporting System (CPARS) database ‘was not consistently useful’ because contracting officers failed to regularly meet the requirements for evaluating contractor performance. More than one third of the performance assessment reports (PARs) were late by an average of 73 days [1,2]. This report was released in 2017, however, in early 2021, Neil Gordon, the author of a POGO piece on the DoD IG report, stated: ‘I don’t think there have been any significant changes since 2017, so those concerns are still valid’ [3]. As noted in 67A, PARs and the CPARS database are not publicly available, so the assessor is not able to further establish whether officials regularly produce contract monitoring and completion reports. In cases where the contract is not sufficiently completed, it is not clear whether action is taken specifically with regard to breaches of contract.

There is not enough information to score this indicator.Very little data on the enforcement of sanctions due to breaches of contract could be found via open-desk research. One case of a breach of contract was found in a DoD IG audit report of DCMA actions relating to penalties against contractors as recommended by the Defense Contract Audit Agency. In this instance, the contractor filed a lawsuit for a breach of contract by the DoD [1]. In 2018, the GAO published a report on the Navy’s performance in shipbuilding and found a number of deficiencies. For example, the report identified that the Navy routinely accepts deliveries of ships with ‘large numbers of uncorrected deficiencies’, which is in contradiction to the Navy’s policy that all contractual responsibilities must be resolved prior to delivery. The ships often do not consistently meet performance expectations; schedule delays are common, with more than half of the 8 lead ships reviewed delayed by more than 2 years; and ships also consistently cost more than initially budgeted [2]. Whilst this GAO report on Navy shipbuilding does not indicate any breaches of contract, it does illustrate that, rather than enforcing contractual responsibilities, the Navy has a practice of accepting incomplete work, which suggests that the Navy would perhaps not enforce these contractual responsibilities if a more severe breach of contract was to occur.

According to the Public Procurement Law (LCP), the contractor must ensure compliance with the contract. For this a person must be appointed as responsible for supervision, to ensure compliance with the schedule established in the contract and its implementation, and to propose corrective measures or solutions to any implementation problems identified, reporting in writing on the progress of the execution of the contract [1]. In the case of the defence sector, the Defence Sector Procurement Committee (CCSD) does not directly oversee implementation, but it does receive the performance evaluation reports from the contracting unit, the modifications made to the agreement, and the contract completion reports, which it approves [2]. Regarding administrative sanctions and the resolution of non-compliance, the LCP establishes specific grounds for unilateral termination of the contract and for sanctions against the contractor. In the defence sector, cases of non-compliance must be referred by the CCSD.

The law specifies processes for monitoring contracts and applying administrative sanctions. However, it does not make explicit procedures for the resolution of disputes during the implementation of contracts, beyond establishing that the CCSD may make recommendations if there are implementation problems, as may the contract supervisor [2].

In addition to an assesment required of the contractor, which contributes directly to the internal audit processes carried out by the Office of the Comptroller General of the National Bolivarian Armed Forces (CONGEFANB), the National Contractors Service (SNC) also offers contractor evaluation tools. These evaluations are carried out after contract completion and include the following criteria: quality, responsibility, knowledge of the work, and timeliness [3]. These criteria are general and further detail is not required in the evaluation.

Public authorities including the Ministry of the People’s Power for Defence (MPPD) have failed to comply with accountability processes since 2016 [1], external controls on the administration of the defence sector have been blocked [2], and civil society organisations condemn the denial of access to information [3]; the political conditions in the country demonstrate a total lack of transparency. This situation makes it impossible to obtain evidence on compliance with procurement monitoring processes as set out in the LCP, such as the preparation of reports recording the implementation, closure, or modifications of contracts [4].

While there is a legal requirement for the contracting unit to prepare reports for submission to the CCSD that must be monitored by the CONGEFANB [1, 2], no evidence was found of monitoring activities carried out by the CONGEFANB in relation to these performance reports. The actions of the CONGEFANB for which it was possible to obtain information do not show evidence of audits monitoring the implementation of contracts. Research for this index only revealed evidence of technical visits, political lobbying, and training in public procurement on the part of the CONGEFANB [3, 4, 5].

Due to the blocking of access to information on contracts awarded by CCSD, and on the management and auditing of these contracts, there is no official information giving account of any proceedings initiated for non-compliance or sanctions imposed on contractors [1].

According to research by experts on the monitoring of different areas of the defence sector, no litigation has been intiated for non-compliance in contractual processes in recent years [2]. Even relevant cases where the national and international press, as well as civil organisations, have condemned breaches of contracts secured by Venezuela have not resulted in the opening of judicial proceedings or even in official statements explaining delays and non-compliance [3, 4].

The Public Procurement and Disposal of Public Assets Act states the obligations to have procurement contracts include the procuring entity’s right to inspect the procurement requirement to ensure proper performance of the contract by the contractor; and specifies the place and time of delivery or completion of the procurement requirement and any conditions relating to its delivery or completion; and for the remedies of either of the parties in the event of breach by the other; and provides for the responsibilities of the parties in the event of delay in delivery to terminate the contract [1]. In other non-military tenders, the government has been reported to have cancelled tenders [2, 3].

Contract variations are supposed to be made through signed documents by both parties, and the documents must be available for inspection by the public once the variations are made [1]. However, the public does not have access to military/defence procurement documents as they would ordinarily have in civilian procurement processes [2]. The Public Entities Corporate Governance Act obliges all public entities to ensure transparency in handling public affairs [3].

The Public Procurement and Disposal of Public Assets Act requires the monitoring of contracts by procuring authorities [1]. The performance is monitored based on the indicators in the contract. However, the government is more concerned about the timelines for delivery of contracts rather than the quality of delivery. There is also room for condonation, with some contractors being given grace periods as long as six months if they miss deadlines [2]. It is unknown if reports are produced as such information is not publicly available concerning the defence sector.

It is not clear if most breaches of contract are fully acted upon. There are vested political interests that determines whether or not the government acts on breaches of procurement contracts, and there are allegations of bribery involved such that line ministries or public entities may provide a facade of contractual progress covering up for the incompetence of private contractors [1]. However, the Public Procurement and Disposal of Public Assets Act provides actions, including termination [2]. The President has made public pronouncements on the cancellation of non-performing, but this has not been followed up on [3].

Country Sort by Country 67a. Reporting policies & procedures Sort By Subindicator 67b. Transparency Sort By Subindicator 67c. Monitoring Sort By Subindicator 67d. Enforcement Sort By Subindicator
Albania 50 / 100 25 / 100 25 / 100 25 / 100
Algeria 0 / 100 0 / 100 0 / 100 0 / 100
Angola 50 / 100 0 / 100 25 / 100 0 / 100
Argentina 50 / 100 50 / 100 0 / 100 0 / 100
Armenia 100 / 100 75 / 100 50 / 100 75 / 100
Australia 100 / 100 75 / 100 75 / 100 75 / 100
Azerbaijan 0 / 100 0 / 100 0 / 100 0 / 100
Bahrain 50 / 100 0 / 100 0 / 100 0 / 100
Bangladesh 100 / 100 0 / 100 0 / 100 NEI
Belgium 75 / 100 100 / 100 50 / 100 NEI
Bosnia and Herzegovina 25 / 100 50 / 100 NEI NEI
Botswana 50 / 100 0 / 100 25 / 100 100 / 100
Brazil 100 / 100 25 / 100 75 / 100 75 / 100
Burkina Faso 0 / 100 0 / 100 0 / 100 0 / 100
Cameroon 0 / 100 0 / 100 0 / 100 0 / 100
Canada 100 / 100 50 / 100 50 / 100 NEI
Chile 50 / 100 25 / 100 0 / 100 NEI
China 100 / 100 0 / 100 25 / 100 0 / 100
Colombia 100 / 100 50 / 100 75 / 100 NEI
Cote d'Ivoire 25 / 100 0 / 100 0 / 100 25 / 100
Denmark 100 / 100 25 / 100 100 / 100 100 / 100
Egypt 50 / 100 0 / 100 0 / 100 50 / 100
Estonia 25 / 100 50 / 100 25 / 100 75 / 100
Finland 100 / 100 75 / 100 100 / 100 100 / 100
France 50 / 100 25 / 100 25 / 100 0 / 100
Germany 100 / 100 50 / 100 100 / 100 75 / 100
Ghana 50 / 100 0 / 100 50 / 100 25 / 100
Greece 100 / 100 50 / 100 100 / 100 75 / 100
Hungary 50 / 100 25 / 100 0 / 100 25 / 100
India 100 / 100 25 / 100 50 / 100 50 / 100
Indonesia 100 / 100 25 / 100 75 / 100 75 / 100
Iran 0 / 100 25 / 100 0 / 100 0 / 100
Iraq 50 / 100 0 / 100 0 / 100 0 / 100
Israel 100 / 100 25 / 100 100 / 100 NEI
Italy 100 / 100 50 / 100 100 / 100 100 / 100
Japan 100 / 100 75 / 100 50 / 100 0 / 100
Jordan 50 / 100 0 / 100 50 / 100 0 / 100
Kenya 100 / 100 0 / 100 0 / 100 0 / 100
Kosovo 100 / 100 25 / 100 25 / 100 0 / 100
Kuwait 50 / 100 0 / 100 0 / 100 0 / 100
Latvia 100 / 100 100 / 100 NEI NEI
Lebanon 0 / 100 0 / 100 25 / 100 0 / 100
Lithuania 100 / 100 50 / 100 50 / 100 50 / 100
Malaysia 50 / 100 0 / 100 50 / 100 0 / 100
Mali 50 / 100 25 / 100 0 / 100 0 / 100
Mexico 50 / 100 50 / 100 50 / 100 0 / 100
Montenegro 25 / 100 50 / 100 25 / 100 0 / 100
Morocco 0 / 100 0 / 100 0 / 100 0 / 100
Myanmar 50 / 100 0 / 100 25 / 100 NEI
Netherlands 100 / 100 50 / 100 50 / 100 NEI
New Zealand 100 / 100 75 / 100 75 / 100 100 / 100
Niger 50 / 100 0 / 100 0 / 100 0 / 100
Nigeria 50 / 100 0 / 100 0 / 100 0 / 100
North Macedonia 100 / 100 75 / 100 75 / 100 100 / 100
Norway 100 / 100 50 / 100 50 / 100 100 / 100
Oman 25 / 100 0 / 100 50 / 100 25 / 100
Palestine 0 / 100 25 / 100 50 / 100 25 / 100
Philippines 100 / 100 25 / 100 100 / 100 75 / 100
Poland 100 / 100 0 / 100 75 / 100 50 / 100
Portugal 100 / 100 0 / 100 50 / 100 0 / 100
Qatar 50 / 100 0 / 100 0 / 100 25 / 100
Russia 100 / 100 0 / 100 50 / 100 0 / 100
Saudi Arabia 50 / 100 0 / 100 50 / 100 0 / 100
Serbia 100 / 100 50 / 100 50 / 100 NEI
Singapore 100 / 100 25 / 100 75 / 100 100 / 100
South Africa 100 / 100 50 / 100 50 / 100 0 / 100
South Korea 100 / 100 25 / 100 75 / 100 75 / 100
South Sudan 25 / 100 0 / 100 NEI 0 / 100
Spain 75 / 100 25 / 100 50 / 100 NEI
Sudan 0 / 100 0 / 100 0 / 100 0 / 100
Sweden 50 / 100 25 / 100 25 / 100 NEI
Switzerland 75 / 100 0 / 100 75 / 100 100 / 100
Taiwan 100 / 100 50 / 100 50 / 100 75 / 100
Tanzania 0 / 100 0 / 100 0 / 100 NEI
Thailand 75 / 100 25 / 100 50 / 100 0 / 100
Tunisia 50 / 100 0 / 100 50 / 100 75 / 100
Turkey 25 / 100 25 / 100 25 / 100 0 / 100
Uganda 100 / 100 0 / 100 50 / 100 NEI
Ukraine 75 / 100 25 / 100 75 / 100 100 / 100
United Arab Emirates 50 / 100 0 / 100 0 / 100 0 / 100
United Kingdom 100 / 100 50 / 100 75 / 100 50 / 100
United States 75 / 100 50 / 100 50 / 100 NEI
Venezuela 75 / 100 0 / 100 0 / 100 0 / 100
Zimbabwe 100 / 100 0 / 100 25 / 100 0 / 100

With thanks for support from the UK Foreign, Commonwealth and Development Office (FCDO) and the Dutch Ministry of Foreign Affairs who have contributed to the Government Defence Integrity Index.

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