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DEFENCE I OFFSET

Jarosław Kruk 

WHAT HAPPENS NEXT TO THE MODERNIZATION OF THE ARMED FORCES, AND WILL POLISH INDUSTRY BENEFIT FROM IT?

15/09/2015

The trade show was superb: lots of exhibitors, new equipment, new offers for the army. Government`s representatives issued a declaration that most of the orders will be produced in Poland. Until now, however, not a single industry representative is present in the Polish delegation group which takes part in negotiation with the US regarding the anti-aircraft and anti-missile defense system “Wisła”. As it is commonly known, the purchase of the system will be performed in government-government formula.

As the consequences of the lack of industry representatives in the negotiation, there is no one to represent their interest. The army is merely concerned about the purchase, they are not interested in some economy, some industrial development. Is this a deliberate policy or sheer stupidity? I think it is the former – they have decided to buy the Patriots, and no one shall change their conception. The Americans are pragmatic. When we finally wake up, they will say: we have conducted intergovernmental negotiation, we have not interfered in Polish delegation group composition, and you have not brought up these subjects (offset, polonisation, industrial cooperation), you could have negotiated before, it was your free choice not to do so. They will be right. We can lose again by our own fault.

The Wisła Program is the biggest Armed Forces` modernization program and it is commonly known that the program is really important for the Polish defense. Many things may still be changed, we can still adjust the system to our needs, and not only order a ready-made product. We can get more in the industrial cooperation, we can get the anti-aircraft and anti-missile defense short-range and medium-range technology. What we need is the will and the right decision.  Industry representatives have to be a part of the negotiating group and care of the interests of the defense industry should be clearly included in guidelines for the negotiation. The decision should be taken now, because the negotiation accelerates.

There is an interview with dr. Zawada on defence24 concerning necessity to prepare by Poland its own short-range anti-aircraft defense system – “Narew program”. I fully agree with the presented view. If Pegaz obtains realization of the Narew program without a tender, Pegaz will be able to choose partners that will help in the development of the system. Poland acting in the abovementioned manner can ensure its security by possession of its own source codes and technical and industrial development. The law allows to award Pegaz the program, by application of Article 346 of the Treaty to the crucial subsystem and the application of the offset.

There is one more change needed. In the past it often happened that the industry received a specific technology related to purchased equipment by offset. Purchased weapons and technologies are valued as necessary for national security. On the other hand, the subsequent upgrades and repairs are granted by a tender regulated by the public procurement law procedure - entrepreneurs from France, Germany or even Korea may win, if they offer the lowest price.

Huge expenditure is usually needed to obtain and control a technology. In the abovementioned countries, when a national entrepreneur has a technology needed to repair and modernize purchased equipment, there is practically no chance that a foreign entity gets a contract within that scope. I'm not, however, surprised by acts of our army - use of the public procurement law is personally more secure for them, as they can always say that they save public money, and no public prosecutor can make an accusation on that basis. In that situation directional amendments of the law are crucial, so that already allocated resources to the Polish industry may be used to ensure security of modernization.

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