Procurement Risk:
Low
Score:
69/100
Government Policy
Q57
75/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. Procurement within the defence sector is subject to both EU and national legislation on…
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Legislation only superficially recognises the risk of corruption. National law makes reference to “conflict of interests” by stating that a tender has to make…
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As stated in Q57A, the EU Directive on public procurement is implemented through Danish legislation on public tenders (“Udbudsloven”) [1]. DALO states that some…
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Q58
75/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The defence procurement process is fully formalised and governed by policies and regulations [1, 2, 3]. Overall, the acquisition cycle consist of four phases…
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Information specifically on the defence procurement cycle is disclosed very briefly and in summary form on the DALO website [1]. Further, at the more…
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Research indicates that there are policies and procedures for each step of the procurement cycle and these are followed in practice [1]. According to…
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Q59
83/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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Defence procurement is subject to different forms and degrees of oversight. As the Ministry of Defence Internal Audit Office and the Danish National Audit…
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Research found it difficult to assess the effectiveness of the above mentioned oversight mechanisms. Most obvious and demonstrable is the effectiveness of the Danish…
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As reported in Q17C, audit reports (“beretninger”) and comments (“notater”) by the Danish National Audit Office are released to the public and they are…
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The document “Outline of Planned Larger Material Acquistiions and Material Service Tasks” (“Oversigt over planlagt større materielinvesteringer og materieldriftsopgaver”), published annually by DALO, provides…
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Actual tenders are made public on the state website udbud.dk [1]. Larger planned purchases are announced in the Defence Agreement, which usually covers a…
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Research found no evidence that all defence purchases are made public in a comprehensive and standardised manner. However, due to EU directives and local…
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Database of contract notices and contract award notices published in TED Tenders Electronic Daily is accessible in CSV format [7]. The general information on…
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Capability Gap and Requirements Definition
Q62
63/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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Both EU directives and national law regulates how the government discriminates in it selection of suppliers: the law on public tenders (Ubdudsloven) states that…
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There is evidence that DALO is working towards implementing the Defence Agreement’s request for CSR emphasis [1, 2]. Research identified an incident where the…
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Q63
83/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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The Defence Agreement determines the overall direction for the Defence. Connections between larger procurements and defence strategy are made specifically in the Defence Agreement…
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Research found no legally or constitutionally mandated oversight mechanisms that specifically scrutinise all procurements in relation to national security strategy [1]. However, as the…
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Ministry of Defence tenders on the state tender website, udbud.dk, demonstrate that purchases are based on clearly identified and quantified technical requirements [1, 2].Tenders…
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Tender Solicitation, Assessment and Contract Award
Q64
50/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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Non-confidential defence procurements exceeding the threshold value for public tenders are conducted as one of three types of tenders: public tenders, limited tenders and…
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According to the law on public tenders, public purchases that fall under the threshold value for public tenders, and that have no cross-border conflict…
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Q65
44/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Research show no indications that a specific policy exists for procurement officials who prevent conflicts of interests [1]. This was confirmed by a DALO…
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The IT system used within the Defence logs every action in the case work and as such there is a trail of every official’s…
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Research could not identify publicly available internal tender board procedures, [1]. However, relevant legislation covering the area is fully transparent and publicly available (see…
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The law on public tenders includes a section on technical specifications, however none of these regulations impose external verification measures [1]. Research found no…
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Q66
67/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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Collusion is strictly outlawed in the Danish Competition Law (“Konkurrenceloven”) [1]. This also includes collusion within the defence sector. The Competition law refers to…
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The EU directive 2014/24/EU and the Law on public tenders (“Ubdudsloven”) states that the bidder should be banned if he or she is convicted…
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This indicator has been marked Not Applicable, as research did not idenitfy any recent cases of collusion [1].
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Research show no indications that procurement officials receive training in identifying and reporting collusion patterns [1, 2].
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Contract Delivery and In-Service Support
Q67
81/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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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…
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Information on tenders is available online at the online version of the Supplement to the Official Journal of the EU, Tenders Electronic Daily [1,…
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All projects are monitored in detail on two dimensions. First, the project management itself is monitored and reported on to a steering group. Second,…
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According to a DALO employee, breaches of contracts are adequately acted upon and policies and regulations are enforced in practice. When a supplier does…
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Q68
100/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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Formal complaint mechanisms are in place and written into the law on public tenders [1]. The law on the Danish Complaints Board for Public…
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Complaints brought before the Danish Complaints Board for Public Procurement are subject to a fee of 10.000-20.000 DKK [1]. The Complaints Board may order…
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Assessment of this question is uncertain because no data specifically on this issue is available. However, judging by other factors, discrimination in future cases…
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The EU Directive on contracting in the fields of defence and security and the EU Directive on public tenders state that member states should…
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As bribery, fraud and corruption related activities are criminal offences according to the Danish Penal Code, cases are investigated and prosecuted through strictly formal…
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The Danish Penal Code provides a range of sanctions including fines or imprisonment [1]. As mentioned in Q69A, bidders who have been found guilty…
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Offset Contracts
Q70
50/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Research found that offset contracts are permitted. They are regulated by clear policies compiled in collaboration between the Ministry of Industry, Business and Financial…
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Industrial cooperation contracts are made between the supplier and the Danish Business Authority. A review of the contract templates and the guidelines for industrial…
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Suppliers are required to make an annual report on the status of delivery obligations to the Ministry of Industry, Business and Financial Affairs. This…
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Research did not identify any publicly available offset contracts [1, 2]. The website of the Danish Business Authority seemingly contains a summary of the…
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The Danish Business Authority delivers an annual report on the quantitative status and performance of the industrial cooperation, that is the offset contracts. The…
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The annual report from the Danish Business Authority (DBA) on the perfomance of offset contracts states that the foreign suppliers’ execution of the obligations…
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Research indicates that offset contracts are conducted as open competition according to the stipulations for defence procurement as described in Q64 etc. [1]. The…
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Agents / Brokers
Q73
0/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
View QuestionFinancing Package
Q74
50/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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While the DALO website contains some information on larger procurements, research did not identify specific financing package information as such [1]. Further, the defence…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. While what can be classified as political considerations are indeed present in major procurement…
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This indicator is not assigned a score in the GDI. The government and/or DALO generally provide justifications for the military need and for the…
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This indicator is not assigned a score in the GDI. As larger defence procurements are generally made by political agreement and open competition through…
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