Threatened governmental goals with regards to the modernisation of the Polish Armed Forces

Threatened governmental goals with regards to the modernisation of the Polish Armed Forces

The Casimir Pulaski Foundation published the following report: “Polish Defence Industry and the Defence Procurement System and Programme of Technical Modernisation of the Polish Armed Forces. Analysis and Recommendations”, by Małgorzata Darowska and Maciej Olex –Szczytowski. The authors suggest the application of possible changes to the defence procurement system that would result in the Polish industry participating in the Modernisation Plan of the Polish Armed Forces to the extent intended by the government.

The analysis of the economic and legal conditions indicates that the existing defence procurement system  is counterproductive to the implementation of the Programme of Technical Modernisation of the Armed Forces in terms of the participation of the Polish Defence Industry (PDI). It is the opinion of the authors that the condition of realistic engagement of the PDI in operational programmes depends on the improvement in planning, managing and coordination of defence procurements, as well as the introduction of changes,  both in procedures and in the industry itself.

Most of the regulations concerning the defence procurement do not include sufficient industrial or economic factors. Meanwhile, it is crucial to analyse how the PDI can be engaged in production and handling of the equipment throughout the entire time it is in use, which usually exceeds 20 years, emphasises Maciej Olex-Szczytowski. With regards to the definition, this requires taking into account the absorption capabilities of the PDI, as well as its needs to invest in assets and intangible goods.  It is also necessary to consider the advantages to the entire economy (increased tax revenue), increase in value of Polska Grupa Zbojeniowa (PGZ) etc.

The restrictions of elastic shaping of future cooperation between foreign partners and the PDI form a significant issue in the long-term perspective, due to the regulations. According to the authors, the regulations result in too much formality in conducting the procurement process. This makes it more difficult to conduct talks between the foreign partners and Polish firms in a coherent way and obstructs prompting a solution beneficial to both sides. The agreements regulating those alliances should consider the possibility of amendments, if justified by the needs of the Ministry of National Defence (MoD) or other important circumstances, keeping in mind the best interests of the taxpayer. Conducting defence procurements heavily complicates the already unclear position of the MoD, which is unsupported by economic criteria, on obtaining and managing the intellectual property rights to technology. In the opinion of Małgorzata Darowska attorney-at-law, the current approach threatens the expropriation of Polish firms from intellectual property rights, as a result of which they cannot rationally plan the production process. Moreover, it restricts the involvement of foreign partners in important projects.

The authors believe it necessary to appoint an advisory body – the Council of Defence Industry, which would be tasked with offering strategic advice to the leadership of the Ministry of National Defence in the process of major defence procurements. The Council members, who exclusively hold backgrounds in industry, would support the MoD in terms of technology as well as review the economic validity and feasibility of alternative solutions from the overall defence perspective, the PDI and the entire Polish economy – all without the contribution of military representatives.  The Council would consist of, inter alia, the Vice-Minister of Defence responsible for procurement (currently Minister Czesław Mroczek) and the President of PGZ.

The authors also recommend simplifying regulations of defence procurement and adjusting the solutions to the Programme’s aims. Furthermore, It is vital to strongly enforce Art. 346 of the Treaty of the Functioning of the European Union (TFEU), in order to assure the most elastic possibility of shaping relations between the PDI and its foreign partners.

It is necessary to compile complex guidelines with regards to obtaining and managing the intellectual property rights by the MoD, taking into account the interests of the PDI and its foreign partners, differentiated according to the type and aim of a given operational programme.

Finally, it is crucial in the authors’ opinions to develop a set of good practices and guidelines to conduct defence procurement and rules of cooperation between the MoD and the industry. Good practices and recommendations should become a tool to support the decision-making process, allowing the necessary elasticity to shape the relations.