The Dutch defence organisation is one of the largest investors within the government authorities. It is indicative that every year purchases 1 billion Euros of new material and additionally spends approximately 200 million Euros on infrastructure, whereas the total defence budget is around 7 billion Euros per year. Defence Materiel Organisation (DMO) is the state authority responsible for all material within the Defence organization and additionally establishes internal material policy. The DMO was established as a separate element of the Ministry of Defence in 2006.
DMO manages the process surrounding the procurement of material by using the Defence Materiel Process, (DMP), which contains rules for meeting requirements for military material, information systems and infrastructure for projects costing 5 million Euros and above. In principle, projects proceed through four phases in the DMP:
- the requirement (phase A);
- the preliminary study (phase B);
- the study (phase C);
- the procurement preparation (phase D).
The realisation of the project begins after phase D. Only if a project exceeds 250 million Euros does a formal DMP project evaluation take place after the material has been taken into service. This is called phase E. During this process, the House of Representatives is kept informed only if the project costs more than 25 million Euros. After the requirement has been approved, projects with a financial scope up to 100 million Euros are in principle, mandated by the State Secretary to the administrative organisation. On the contrary, if the financial scope is less than 100 million or the project is designated as politically sensitive, it is generally not mandated.
Nevertheless, the House of Representatives is informed during each DMP phase and furthermore during the requirement phase, the Defence organisation can make a substantiated proposal to the House to send a combined B/C letter followed by a D letter, or even a combined B/C/D letter.
The aforementioned provision of information applies to strategic material projects. Strategic material comprises all material to which Article 296 of the EU Treaty applies (Parliamentary Document 27 830 no. 39). Non-strategic material includes tents, generators and basic commercial vehicles, as well as management projects relating to, for instance, real estate and IT.
Furthermore, the awarding of contracts is subjected to a number of conditions that are not particularly complex. Depending on the nature of the contract, there are different sets of general conditions. The above is a list of the most important sets of general conditions:
- Uniform Administrative Conditions for the Execution of Works (UAV 1989) These conditions are applied to construction work.
- General Government Terms and Conditions of Purchase (ARIV 2008). These conditions are applied to the purchase of moveable properties. They apply to all government authorities.
- General Government Terms and Conditions for Public Service Contracts (ARVODI 2008). These conditions are applied to service contracts such as organisational advice services. These conditions also apply to all government authorities.
- General Conditions for the Performance of Work for the Ministry of Defence (AVWD 1995). These conditions apply to the performance of work on moveable properties belonging to the Defence organisation, such as treatment, overhaul, modification, installation, maintenance, repair, calibration and configuration. If the work is carried out on Defence premises, additional conditions may apply, referred to as AVWD-D.
- General Conditions for the Hiring of Personnel (AVIP 1999). These conditions apply to the hiring of (temporary) personnel. An important difference compared with the AVWD is that the AVIP does not involve the performance of work on moveable properties.
The abovementioned conditions are not usually sufficient for a complex and large-scale contract. In these cases, the conditions are set out in a specific contract, tailored to the complexity and scope of the order. For Further Information Press Here