THE MINISTRY OF NATIONAL DEFENSE ANSWERS ION STAN: "Electromecanica" lost out the contract to reconfigure the HAWK missiles to the UTI group

• In the summer, Chamber of Deputies member Ion Stan said that the Ministry of Defense launched a call for tenders "with a < < dedicated > > tender book, so that UTI would be the only bidder to upgrade HAWK missiles to the C3 level

• UTI: "The statement that a call for tenders was held for the upgrade of the HAWK and VOLHOV missiles is erroneous"

The association between Defence Engineering SA and SC Interactive Systems & Business Consulting SRL, with the former belonging to the UTI Group, won against a consortium which also included "Electromecanica" Ploieşti, the call for tenders for "achieving an intermediary configuration of the HAWK missiles, which involves the integration of the HAWK PIP III equipment into a C3 system (Command-Control-Communications), which would result in HAWK PIP IIIR", the representatives of the Ministry of National Defense (MApN) told us, in reply to some accusations made this summer by deputy Ion Stan, who is the vice-president of the Commission for the Control of the Romanian Intelligence Service (SRI).

On June 13th, 2012, a few days after the local elections, during the session of the Chamber of Deputies, Ion Stan made four mind-boggling political statements concerning national safety.

On this occasion, Ion Stan said that the UTI group, owned by businessman Tiberiu Urdăreanu, was going to acquire "Romarm" and that the head of the Armaments Department of the Ministry of Defense and his superiors allegedly launched a "call for tenders with a < < dedicated > > tender book, so that UTI would be the only supplier for upgrading HAWK missiles to the C3 level (which should be upgraded to the C4 level)". He went on to say: "Furthermore, also stipulated in the contractual arrangement is the upgrade to the C3 level of the VOLHOV (ed. note: Russian) missiles, which have a C3 level as a factory default!"

Contacted by us, the representatives of the MApN stressed that the at the present time, the upgrade of the surface-to-air missiles which make up the HAWK PIP III system the program for the upgrade of the HAWK XXI configuration is being postponed until after 2018, due to financial reasons.

The quoted sources said that in this context, "we are only considering the revitalization and their recertification with the NAMSA (NATO Maintenance and Supply Agency - currently NATO Supply Agency), activities which could have been conducted through < Electromecanica > only if the upgrade contract had been signed with the American manufacturer, and < Electromecanica > had benefited from the technology transfer in question".

According to officials from the Ministry of Defense, the ministry took the decision to complete the program to modernize the missiles in two stages: one for the creation of an intermediary configuration, which involves the integration of the HAWK PIP III equipments into a C3 (Command-Control-Communications) system, which would result in a HAWK PIP IIIR configuration and a second stage for achieving the final configuration, namely HAWK XXI, after 2018, which would only be done with the American manufacturer "Raytheon", which is an authority in designing the surface-to-air missiles which make up the system.

A call for tenders was held for these procedures, which was won by the "Defence Engineering SA - SC Interactive Systems & Business Consulting SRL" partnership.

The response sent to us by the Ministry of Defense states that following the awarding of the call for tenders, there were no disputes filed against it, that the batch concerning the VOLHOV missiles was not awarded and that the association which "Electromecanica" was a part of did not submit a tender offer for the contract concerning that type of missiles.

The representatives of the Corporate Communication Department of UTI also claim that the call for bids held by the MApN did not concern the modernization of the missiles, "but rather the interface of the systems which equip the Romanian army (HAWK and VOLHOV) with the command and control system of the Air Forces, and the creation of command and control system, based on a software solution provided by NATO. Therefore, the statement that a call for tenders was held for the upgrade of the HAWK and VOLHOV missiles is erroneous".

The quoted sources also said that the acquisition documentation was published in the electronic procurement system and that the call for tenders was open, and went on to say: "UTI is an advanced technology company, capable of participating with other companies in Romania and/or in cooperation with strategic companies, in the European defense industry to create a missile system. The presence of Romanian companies must ensure the necessary comfort for the customer, that it can ensure the maintenance and the independence of the operative supply".

When it comes to the modernization of the HAWK missile system, Ion Stan said: "In order to upgrade the HAWK missiles, from the PIP II to the NATO-interoperable PIP III version, a common Romanian-Dutch program was agreed on a government level, with the help of American manufacturer RAYTHEON IDS. The < Electromecanica > plant of Ploieşti was selected for this purpose, the only operator in Romania currently still authorized for designing, manufacturing, modernizing and maintaining missiles.

The stake of the 100-150 million, which is the initial amount of the modernization offer, has immediately sparked the interest of the leeches of the defense industry and of their political cronies. In 2005, even though the Ministry of the Economy had allocated the funds for the modernization of the missiles, an attempt was made to remove the < Electromecanica > plant from the project, and to create the public-private partnership system, of a so-called mixed company, SC < Agelsis > SA in a public-private partnership system, where 51% of the assets would be owned by two managers of < Electromecanica > and by a third individual, who represented a company interested in dismantling and acquiring < Romarm >. This intention was fraudulent and illegal, because the Romanian legislation prohibits private companies from operating in the area of military missiles, has been stopped.

Someone at the top of the Ministry of Defense, angry that their scheme failed, decided to remove the missiles from the custody of the < Electromecanica > plant and that they be stored in a military unit, where the storage conditions aren't exactly the best.

Doubtful in terms of opportunity and illegal from a procedural point of view, the initial governmental arrangement was amended, meaning that the foreign partner was changed, as was the internal operator, as another Romanian industrial partner was designated to replace the < Electromecanica > plant. A partner which had no specialists, no manufacturing training, no tools, devices and verification facilities, no testing facilities and no authorization to provide services for the maintenance and modernization of missiles".

The representatives of the Ministry of Defense have confirmed that the package of HAWK PIP III equipment, acquired from the Dutch government, was left in the custody of "Electromecanica", on the basis of two contracts, signed with the Ministry of National Defense in 2005 and 2006, which concerned the provision of services for unloading, takeover, triage, storage and the upgrade of the HAWK missile system to the HAWK XXI configuration.

The quoted sources have added: "The upgrade was supposed to be done by the original manufacturer of the system, American company < Raytheon >, and the revitalization and recertification of the surface-to-air missiles were scheduled to take place with the participation of SC < Electromecanica > SA, following a know-how and technology transfer, associated to the upgrade contract. Given that the program for the modernization of the HAWK missile system to the HAWK XXI configuration was postponed until after 2018 due to financial reasons, the payment of the contracts by which the equipment imported from Holland are kept in the custody of SC < Electromecanica > SA Ploieşti".

The equipments are currently stored in the warehouses of the Ministry of Defense, according to what its officials told us. They said that this means lower costs, and the storage conditions comply with the technical requirements of the manufacturer.