Ministry of Defence plans to purchase unmanned reconnaissance vehicles for almost 121 million crowns

 06. 11. 2021      category: Army of the Czech Republic
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The subject of the forthcoming public procurement is the acquisition of 4 pieces of a set of small Unmanned Aerial Vehicles "UAS PUMA 3 AE" (Unmanned Aerial Systems). Each set consists of 3 airframes, i.e. a total of 12 aircraft. The estimated value of the contract is 99,9 million euro. CZK without VAT (CZK 120.90 million including VAT). 

The procurement of the above-mentioned military equipment is subject to the special procedural rules of the international organisation NSPA "NSPO Procurement Regulations" within the framework of the Czech Republic's membership in the NSPA umbrella partnership. The NSPA is an international organisation securing all NATO member states, which was established by NATO member states in 2012 to implement the acquisition needs of member states and which the Czech Republic joined on the basis of an international treaty. The advantage of purchasing through the NSPA is the possibility of consolidating supplies within the purchase of materials and services, and therefore realising economies of scale. Through its role, the NSPA contributes to ensuring the unification and interoperability of member armies, particularly in the procurement of ammunition and logistic support for weapon systems.

Puma_3_AE_24x36_highresPicture: The subject of the upcoming procurement is the acquisition of 4 pieces of the small Unmanned Aerial Vehicle "UAS PUMA 3 AE" (Unmanned Aerial Systems) kit | AV AeroVironment

The Czech Republic has been a valid member of the Partnership since January 2018. Currently, the Ministry of Defence of the Czech Republic has a contract with the NSPA for the provision of service support and spare parts for UAS RAVEN and WASP with a financial limit of EUR 60.5 million. From 2024 onwards, it is planned to continue providing service support for all UAS RAVEN, WASP and PUMA mini unmanned aerial vehicles by concluding a follow-on contract with the NSPA. 

The purchase is made for use in NATO operations. The UAVs are intended primarily to support the Czech Army in NATO international operations. The UAVs used by the Czech Armed Forces represent an essential tactical capability to support troops in conducting reconnaissance and a wide range of related tasks, especially in foreign operations. The small "UAS PUMA 3 AE" Unmanned Aerial Vehicle fulfils the tactical capability of conducting aerial reconnaissance for direct combat support and protection of deployable units of the Ground Forces of the Czech Armed Forces.

The estimated value of the procurement is 99.9 million EUR. CZK without VAT (CZK 120.90 million including VAT). The above estimated value was determined on the basis of information provided by the supplier (NSPA) in the framework of the request for a preliminary quotation and on the basis of the official price list valid for all members of the "Unmanned Aerial Systems Support Partnership" in the RAVEN-WASP PUMA project, of which the Czech Republic is a member since 2018.

The bid price of EUR 4.416 million was awarded by the Czech Republic to the European Union. USD (approx. CZK 94.443 million excluding VAT at the fixed exchange rate for 2021) was assessed by the contracting authority's expert panel as being the price customary at the time and place. The Panel of Experts concluded that, given the nature of the subject matter of the procurement and the method of acquisition, i.e. by concluding a contract with the NSPA under the terms and conditions set out in the Partnership, which are identical for all members of the Partnership, the total bid price is the normal market rate.

The contract is expected to be concluded in November 2021. This is the most economically and operationally advantageous option for the acquisition of the required material. Membership of the Partnership provides information sharing, training opportunities, direct investment purchase, service support and above all a cost effective and level playing field for all participants. NSPA has its own acquisition process and enters into contact with the manufacturer as the sole authority for all members of the Partnership. NSPA also guarantees delivery of most purchased materials within 180 days of the order being shipped from NSPA to the supplier.

Another option is to procure PUMA UAS through a contract with the U.S. Government, under the Foreign Military Sale (FMS) mode of trade. However, this method is disadvantageous for the needs of the Army because of the long procurement process (the US will submit a bid in about 6 months) and the long delivery time for the material (delivery in about 1 year at the earliest from the conclusion of the contract). Furthermore, in the case of trade with the US, customs duties are also required, which increases the cost of procurement of the material.

It is also possible to purchase a PUMA UAS by directly approaching the foreign manufacturer (Direct Commercial Sale). In this case, however, the contract price would certainly be higher than the price guaranteed by the NSPA because the MoD would not be able to take advantage of volume discounts as the NSPA does when consolidating orders from all members of the Partnership.

 Author: Martin Šiška