Procurement Risk:
Moderate
Score:
66/100
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. A number of regulations shape the legal framework for anti-corruption in defence and security…
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National legislation includes laws on corruption. The Procurement Act 2012 states that ‘a contracting authority or a special-sector company shall take appropriate measures to…
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Rules on corruption within procurement legislation are generally adhered to. However, there are strong grey areas that may draw that conclusion into question (e.g.…
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Q58
67/100
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 Materiel Process (DMP) regulates the decision-making process for defence materials, IT systems and infrastructure costing more than 25 million euros. The DMP…
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The Defence and Security Procurement Act mandates that its provisions – including those on transparency and open-source information – apply to the entire life…
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The annual Defence Project Overview shows evidence of procurement processes working in practice. For each procurement project, the overview shows the needs assessment, connection…
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Q59
92/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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There are three oversight mechanisms for the defence procurement cycle. The first is the formal political cycle, as parliamentary approval is required for acquisitions…
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The material for each project in the annual Defence Projects Overview includes a list of parliamentary briefings and consultations that have been conducted in…
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Parliamentary papers detailing discussions on procurement are available to the public, as well as commission reports by the Parliamentary Committee on Defence [1,2]. The…
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Comprehensive forward planning documents have been released in recent years, which detail planning for potential purchases up to 2035. Published in 2018, the Defence…
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The annual Defence Project Overview details current plans for defence purchases up to and including 2025 [1]. This overview shows the financial planning for…
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The Ministry of Defence provides information on defence purchases over 25 million euros through the Defence Projects Overview, which is released annually [1]. The…
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Data on bigger defence purchases, which were awarded on the basis of EU classic or defence procurement directives, are published in TED (Tenders Electronic…
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Capability Gap and Requirements Definition
Q62
50/100
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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The Ministry of Defence does not require companies to have a formal and publicly declared anti-corruption programme in place in order to bid for…
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Though public procurement in the Netherlands draws significant public scrutiny, media reports do not suggest that there is a widespread problem with corruption amongst…
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Q63
92/100
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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A two-way corroboration can be seen between the defence strategy documents and the procurement reporting documents, in that the defence strategy documents outline the…
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There are three oversight mechanisms for the defence procurement cycle that monitor how purchases align with the overall national security strategy. The first is…
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Strategy is systemically used to justify purchases. In addition to the strategy detailed for each purchase in the Defence Projects Overview (see Q63A), online…
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Tender Solicitation, Assessment and Contract Award
Q64
NEI/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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There is insufficient evidence to score this indicator, besides legislation; as such, it is marked ‘Not Enough Information’. There are three types of contract…
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Procurement processes are overseen by the Central Government Audit Service and the Netherlands Court of Audit, however, while these bodies can monitor, question and…
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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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Procurement officials, including those involved in tenders, are subject to the Code of Conduct for civilian personnel, which restricts (financial) conflicts of interest, unauthorised…
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The Central Government Audit Service, which audits all government organisations, including those involved in defence tenders, states that audit trails can be deduced and…
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The Code of Conduct that applies to civilian and military defence personnel covers personnel who work as tender officials [1]. However, there is a…
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Procurement processes are overseen by the Central Government Audit Service and the Netherlands Court of Audit, however, while these bodies can monitor, question and…
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Q66
56/100
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 prohibited under several laws and guidelines. Chapter 3 of the Dutch Competition Act prohibits agreements between enterprises, decisions of associations of enterprises…
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The consequences for violation of the Competition Act for companies include fines, penalties, ‘binding instructions to comply with the law’, and/or make a company…
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The role of the Netherlands Authority for Consumers and Markets (ACM) is to supervise market competition, enforce consumer law and collaborate with legislators on…
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The Netherlands Competition Authority publishes information for procurement officers on detecting and preventing collusion. The advice includes information of the types of ‘cartels’ and…
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Contract Delivery and In-Service Support
Q67
67/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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Policies that outline reporting or delivery obligations exist under the general terms and conditions for procurement contracts [1]. Article 9 of the General Government…
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For purchases over 25 million euros, the Defence Projects Overview (published annually online) details financial progress and timelines as well as any major changes…
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Officials produce contract monitoring and completion reports for all contracts, but these are not public and their contents are unknown. For materiel that is…
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There is not enough information to score this indicator, due to a lack of data to assess enforcement in practice. Article 21 of the…
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Q68
83/100
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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There are three formal complaints mechanisms through which companies can report (alleged) malpractice by other companies, the contracting parties (Ministry of Defence) or third…
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Reporting (potential) malpractice to the COID and the Netherlands Authority for Consumers and Markets is free of charge, as is submitting an objection through…
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Despite the fact that the number of reports against the government as a contracting authority is growing year by year, there is still a…
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The Defence and Security Procurement Act (Article 2.76) states that a contracting authority must exclude a candidate who has (previously) been convicted of fraud,…
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There is some evidence that cases of corruption may be subject to undue political influence. Some cases suggest that not all cases of alleged…
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There is not enough information to score this indicator. Sanctions were most notoriously applied in 2017, when a corruption and bribery scandal erupted within…
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Offset Contracts
Q70
25/100
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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Offset contracts (referred to in Dutch law and policy as ‘industrial participation’) are permitted by law under Article 346 of the Treaty on the…
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The Defence Industry Strategy, cited as the key policy document regarding industrial participation, makes no reference to the need to prevent or monitor corruption…
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The leading policy document on industrial participation (offset contracts) does not outline reporting or delivery obligations for offset contracts [1]. However, such policies do…
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The Commissariat for Military Production maintains an industrial participation database where the public can search for companies that are required to place offset orders…
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A report on the progress and outcomes of industrial participation policy is submitted to Parliament once every two years. This report includes details on…
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There is not enough information to score this indicator. Article 21 of the General Government Terms and Conditions for Public Service Contracts states that…
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The Defence & Security Procurement Law enshrines competition as a procurement principle in all cases except in extreme crises (Article 2:23). [1] The circumstances…
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Agents / Brokers
Q73
NEI/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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The Defence and Security Procurement Act contains provisions on the use of agents and third parties in the procurement cycle (Article 2.82) [1]. Article…
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There is not enough information to score this indicator. Currently, no evidence exists to suggest that sanctions are not applied in accordance with policy…
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Financing 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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The Ministry of Defence publishes the Defence Projects Overview annually, which details progress stages, strategy/policy framework, changes, timelines, implementation and corresponding parliamentary papers, for…
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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. There is little evidence of major political influence by selling nations on acquisition decisions…
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This indicator is not assigned a score in the GDI. For procurement processes over 25 million euros, the procurement preparation phase (Phase D) mandates…
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This indicator is not assigned a score in the GDI. There is little evidence of major domestic political influence on acquisition decisions and such…
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