The Defense Ministry’s Vehicle Fleet

Yesterday Newsru.com relayed an Interfaks story indicating that the Defense Ministry’s tender for a three-year lease on 553 automobiles for 10.3 billion rubles attracted just one bidder.

The Defense Ministry’s requirement included armored and luxury models, including a Porsche, BMWs, Mercedes, and a Toyota Land Cruiser, as well as more run-of-the-mill Fiats, Fords, and Volkswagens.  They’ll be used in Moscow, and all four MDs.  The luxury models are for chauffeuring foreign visitors.

The sole bidder – FGUP “St. Petersburg Engineering-Technical Center of the RF Defense Ministry” – took the contract at the unchanged initial price of 10,265,000,000 rubles.

The Defense Ministry had said earlier it was looking to save money by not buying, servicing, insuring, or operating this vehicle fleet.  It said the cost of the luxury vehicles was only a small part of the contract, and claimed they would be leased by the hour, for example 250 rubles per hour for the Toyota Land Cruiser and 400 rubles for an armored car.

Vedomosti published the first story on this tender on 10 December.  It said the Defense Ministry was looking to save 3 billion rubles.  It also predicted that the ministry’s own motor pool would win the tender because private firms are just appearing in this area, and don’t have an established network covering the entire country. 

Serdyukov’s effort to bring more efficient business practices to the Defense Ministry is again short-circuited by a lack of bidders.  This has happened before, most prominently in the case of Defense Ministry property sales.  Firms either don’t compete for contracts because they aren’t capable of performing them, or perhaps they only bid on ones they know in advance they’ll win.  Either way, it complicates successful outsourcing.

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One response to “The Defense Ministry’s Vehicle Fleet

  1. Pingback: Can He Possibly Avoid Prosecution? | Russian Defense Policy

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