About contracts with the RF Ministry of Defense
A contract, according to the current legislation of the Russian Federation , is an agreement concluded by a state customer in order to meet the needs and requirements of government departments and organizations, for example, the Ministry of Defense of the Russian Federation in products, works and services. Contracts are concluded for the supply of goods and performance of services by various organizations with institutions and organizations of the Ministry of Defense of the Russian Federation on the basis of the Federal Law .
Currently, the conclusion of contracts on behalf of the RF Defense Ministries is entrusted to the departments of the Logistics Headquarters of the RF Armed Forces, which, being the military command body of the RF Defense Ministry, acts on behalf of the Russian Federation in the interests of the Armed Forces.
At the same time, the contract is a form of concluding an agreement only with organizations and firms participating in public procurement as suppliers.
The rules for concluding contracts, along with the Civil Code of the Russian Federation , are also regulated by the BC RF , which prescribes the use of the concept of "contract" for those transactions where one of the parties is a state organization. Similar requirements for the conclusion of contracts with state organizations are provided for by the Budget Code of the Russian Federation .
Contracts with the RF Ministry of Defense should be viewed from several perspectives. Firstly, with regard to material and technical support, contracts act as a set of interrelated contracts between the Headquarters of the Logistics Department of the Armed Forces of the Russian Federation and suppliers of products, works and services, providing for the complete and comprehensive satisfaction of the needs and requirements of associations, formations, military units and individual servicemen of the Armed Forces of the Russian Federation. Federation. Secondly, from the point of view of fulfilling a defense order, contracts are a system of contracts concluded by the RF Ministry of Defense with enterprises of the country's military-industrial complex and their partners, providing for the obligation and responsibility of the parties for the fulfillment of the order. And, finally, in accordance with the Civil Code of the Russian Federation , contracts are classified and conventionally divided into types, but while maintaining a single system, the unifying feature of which is contractual relations.
A special place is occupied by state contracts for the supply of goods provided for by the state armament program approved by the President of the Russian Federation. These types of contracts should be concluded within the limits of funds established for the corresponding purposes by the specified program, for the period of its implementation .
Each contract, depending on the type, has certain characteristics on the basis of which it is classified. These signs are currently accepted to include:
- number of participants (unilateral, bilateral and multilateral);
- property representation (paid and gratuitous);
- significance (main and additional);
- risks (commutative and aleatory);
- planning (planned and unplanned);
- duration of action (one-time and lasting);
- time of confinement (final and preliminary);
- the terms of the transaction (mutually agreed upon and accession agreements);
- terms of execution (long and short term).
Problematic issues of contract execution in peacetime
According to media reports, the leadership of the country and the Ministry of Defense, even today, in peacetime, are concerned about the violation of the deadlines for the fulfillment of state contracts by individual enterprises for the supply of military products. At the same time, manufacturers of military products are also making claims to the Ministry of Defense of the Russian Federation, in particular, on the issue of frequent delays in payment for already completed government orders.
In recent years, there has been a slight increase in the number of problematic issues related to the conclusion and implementation of contracts for the state defense order.
The problematic issues of the implementation of state contracts for military products in peacetime include:
- aging and natural loss of professional technical personnel, as well as a certain difficulty of their equivalent replacement by young ones. The solution to this problem can be the formation of the necessary personnel reserve for the enterprises of the military-industrial complex in peacetime;
- pricing in Russia. Enterprises are dissatisfied with the fact that strict price requirements on the part of the customer (Ministry of Defense of the Russian Federation) do not take into account constant inflation and rising prices for energy resources, metals, services of infrastructure monopolies, as well as the increase in prices for component suppliers. It should be noted that at present the system and algorithms for managing the prices of cooperation have not yet been finally formed;
- forcing enterprises to conclude contracts with the RF Ministry of Defense with practically zero profitability. A decrease in the level of profitability leads to a decrease in profit, which is the main source of financing for defense industry enterprises for the development of production and structure. A high level of profitability ensures expanded reproduction of military products, military equipment and weapons, refurbishment of factories, purchase of licenses, etc .;
- inaccurate assessment of their potential capabilities by the head performers when submitting documents to the tender to obtain a contract. The lead contractor wins the tender at the declared price, and later declares that the cooperative organizations have inflated prices, and the supply of military equipment at the price set in the state contract, declared at the tender, is impossible. At the same time, as practice shows, the military-industrial committee under the Government of the Russian Federation, the Russian Ministry of Defense, Rosoboronzakaz and the Federal Antimonopoly Service have no influence on such enterprises;
- the lack of a mechanism for regulating and producing high-tech military products that can interest enterprises not only in their creation, but also in the creation of weapons and military equipment that have no analogues abroad, as well as stimulate a reduction in the costs of their development;
- dependence of the cost of resources on foreign exchange rates;
- other problems, for example, regular violation of the terms of work; insufficient information about the progress of the execution of government contracts; imperfection of project management mechanisms for the execution of government contracts, lack of a multilevel monitoring system, as well as a risk management system.
The presence of these problems ultimately leads to non-fulfillment by defense industry enterprises of their obligations under government contracts.
Thus, it is obvious that even in peacetime, the organization of the execution of contracts for the needs of the RF Ministry of Defense is in the stage of formation, and against the background of existing objective and subjective factors, it causes problems in the timely and high-quality execution of contracts.
Some directions for improving the organization of contract execution
To improve the organization of the execution of contracts in our country in peacetime, it is necessary:
- to conduct open (transparent) tenders for the purchase of products, goods used in the RF Ministry of Defense (exclude lobbying for government orders, introduce a mandatory check of enterprises for the ability to fulfill contracts, exclude fly-by-night firms, etc.);
- to purchase the largest possible volume of products and goods and to guarantee a system of payment from the state;
- to create groups for economic control over the conclusion of contracts, concession agreements and over the expenditure of funds;
- to monitor the marketing proposals of enterprises for the price and quality of their products (analyze and take into account the reviews of other customers of the enterprises);
- to increase the personal responsibility of officials concluding contracts for disruptions to the delivery time of products and the timeliness of payment for completed deliveries.
War, as you know, is a force majeure circumstance of force majeure and, according to the provision of any contract, all peacetime government contracts for the supply of products with the outbreak of hostilities automatically terminate.
The war, as you know, puts forward additional and more stringent requirements for the country's enterprises and their products (provision of services) for military purposes. Firstly, to the quality indicators determined by the tactical and technical assignment (TTZ). Secondly, to the quantity corresponding to the real needs of the army. Thirdly, by the time of release and delivery of finished products (goods) to the customer. Fourthly, to the cost of manufactured products.
Obviously, the products supplied to the active army on orders must fully comply with the TTZ, its quantity must fully meet the needs and demands of the army, the production and delivery times must be reduced to the minimum possible time, and the cost of the products must be within the allocated limits. ...
Successful fulfillment of defense orders, obviously, can be achieved if four interrelated conditions are met, namely: the availability of an appropriate production base, qualified human resources, the required resources and sufficient funding. Ensuring the timely and high-quality fulfillment of state defense orders in wartime is a priority task facing the military-industrial complex. But, unfortunately, not all enterprises in the country will be able to fulfill the additional, more stringent requirements of the state defense order for products. At the same time, the problems with the fulfillment of state orders, which exist in peacetime, during the war will only get worse, including due to more stringent requirements for enterprises.
Operation of enterprises in wartime conditions
The experience of the operation of enterprises in wartime conditions, acquired during the First and Second World Wars on the territories of the belligerent states, shows that:
- with the outbreak of hostilities, as a rule, there comes a personnel "hunger" of enterprises producing military products, which only worsens over time, since persons of draft age are mobilized into the active army, that is, the most able-bodied and professionally trained personnel;
- the cost of products, including military ones, in wartime is constantly increasing due to the acceleration of inflation and a significant increase in prices for energy, metal, services of third-party organizations, as well as an increase in prices for components;
- in wartime conditions, almost all enterprises operate at a loss, therefore, there can be no talk of any profitability, and the lack of profitability, as you know, reduces the production of military products, military equipment and weapons, refurbishment of factories, etc.;
- the financial resources of enterprises for the fulfillment of the state defense order in full in wartime are not enough for the production of military products;
- the normal activities of defense enterprises are actively opposed by the enemy, for example, by bombing, organizing sabotage activities, etc.;
- not all military-industrial complex enterprises will be able to function during wartime, since some of them can be destroyed along with people or put out of action through exposure weapons enemy or sabotage, and some - may remain in the territories captured by the enemy, etc.
From the above, it becomes obvious that the functioning of enterprises in wartime conditions is influenced by a number of unfavorable factors that most directly affect the qualitative and quantitative indicators of manufactured products and the timing of the fulfillment of state defense orders. In some cases, the action of unfavorable factors can cause the disruption of the work of the enterprise, which, of course, is unacceptable during a war.
It should be noted that one of the significant factors in the functioning of an enterprise is its location. Suffice it to recall the work of enterprises on the territory of the United States of America and on the territory of the Soviet Union during the Second World War.
Historical the experience of fulfilling military orders, for example, for the needs of the Russian imperial army during the First World War, showed the following:
1. After the mobilization of the industry of tsarist Russia, the production of military products in the country expanded, however, due to insufficient production capacities, the domestic industry was not able to fully meet the needs of the front, therefore the tsarist government was forced to place military orders at allied enterprises (in the Entente countries) and pay for the supplied products in gold. The result was disastrous: the allies in every possible way delayed the implementation of military contracts, unreasonably raised prices and supplied obsolete weapons.
2. The cost of military products in Tsarist Russia and in the Entente countries during the First World War increased significantly, which ultimately undermined the Russian economy and led the Russian Empire to collapse, and its allies to enrichment.
Replacing contracts with orders from the mobilization economy
After World War I and the Civil War, Russia learned a number of lessons, namely the need to:
a) mobilizing the country's economy when martial law is declared in the country and during hostilities;
b) development and introduction of regulations on the production of military goods;
c) providing the active army with various types of products required for its combat activities.
It was the mobilization of the USSR economy or its transfer to a "war track" in 1941-1942 that allowed our country to win the Victory over Nazi Germany and its satellites in the bloodiest war of the twentieth century.
For the economic mobilization of the existing Russian industry with the outbreak of hostilities, it is advisable to carry out the following organizational measures:
1. Guided by the provisions of the current regulatory acts of the Russian Federation (Civil Code of the Russian Federation; Federal Constitutional Law "On Martial Law" (as amended on July 1, 2017); Article 7, Article 14 of the Federal Law "On Mobilization Preparation and Mobilization in the Russian Federation "(As amended on February 22.02.2017, 29.12.2017); Federal Law" On Defense "(as amended on December 2016, 2020);" Defense Plan of the Russian Federation "(RF RF) for 18-2015, enacted by the Decree of the President of the Russian Federation of November XNUMX, XNUMX), to seize all industrial enterprises necessary for defense needs.
2. Completely abandon contracts to support the active army and, accordingly, from tenders for the conclusion of contracts of the RF Ministry of Defense with manufacturers and suppliers.
3. To transfer all branches of the country's industry to the production of military products.
4. Introduce strict regulation of accounting and distribution of all available resources and industrial products in the country.
5. To redistribute the production capacity of working capital and labor.
6. To direct capital investments to the most important production.
7. Rebuild the country's economic system.
8. Introduce external verification of military products prior to their delivery to the active army.
9. Establish standardized constant state prices for military products manufactured by enterprises, fix inflation and prices for energy resources, metals, services of infrastructure monopolies, as well as prices of suppliers of components. Refuse to link resources and products to any foreign currency.
10. To release skilled workers of defense enterprises from mobilization.
11. Subordinate all industrial enterprises to a single state body (for example, the State Defense Committee) after its creation.
12. Refuse to provide services by third parties in the active army.
As the experience of the Great Patriotic War has shown, the implementation of the above measures allows creating a unified military-economic management of the country's enterprises working for defense and in the interests of the armed forces, and contributes to the effective functioning of the country's economy as a whole in wartime and an increase in the volume of military production.
There were still wartime contracts
In the history of the Great Patriotic War, there are cases of concluding contracts, but only in the territories of the liberated states with local authorities and manufacturers in 1944-1945. Contracts were concluded for the comprehensive provision of the personnel of the Red Army and the fullest satisfaction of the needs of the army in the field, in particular, clothing, food and fuel types of support, but only when the armed forces are outside our country.
The need to conclude contracts with foreign suppliers for the provision of Soviet military personnel was dictated by the following reasons:
- political: for the location of the local population to our country and its armed forces;
- economic: for the revival of the economy of the liberated countries, destroyed by the invaders;
- ideological: to raise the authority of the Soviet armed forces and our country;
- transport: a significant "shoulder" for the delivery of goods, and, therefore, large financial costs for the delivery of products from the eastern regions of the USSR to the army that fought outside the country.
So, since the summer of 1944, to provide troops (forces) conducting hostilities outside the USSR, contracts were concluded with the local authorities of the liberated regions of Poland (for the repair and sewing of uniforms and shoes), Romania (for providing the army with oil products and fodder), Hungary and Bulgaria (for the supply of agricultural products and fodder), etc. At the same time, payments for the fulfillment of contracts with local manufacturers were made at prices set by local authorities and in local currency. In total, 25 types of foreign currency were allocated from the USSR budget to pay for completed contracts, which was used as a means of payment.
It should be noted that the conclusion of contracts with foreign suppliers of the liberated countries was more a friendly step than an objective necessity, since at the final stage of the Great Patriotic War, the mobilization economy of the USSR was able not only to independently and fully provide the Red Army, both on the territory of its own country, but also and beyond, but could also deliver all the material resources to the active army.
Obviously, with the beginning of the war, all peacetime contracts are automatically terminated due to their cancellation due to force majeure.
That is why, for the period of hostilities, contracts for providing the active army with everything necessary are replaced by the fulfillment of military orders from the country's mobilization economy. To transfer the country to a "military track" it is necessary:
- completely abandon the market economy in peacetime and go to a centralized mobilization economy;
- to withdraw all industrial enterprises in accordance with the current legislation of the Russian Federation into the ownership of the state;
- to create a unified governing body for the country's military economy;
- to take under strict accounting, control and distribution of all the country's resources.
At the same time, during the period of hostilities outside the country in the liberated foreign territories, if necessary, contracts can be concluded with local authorities and manufacturers to provide the active army with certain types of allowance.
1. Federal law of 05.04. 2013 (as amended in 2019) 44-FZ "On the contract system in the procurement of goods, works, services to meet state and municipal needs."
2. Civil Code of the Russian Federation, Ch. 27.
3. Budget Code of the Russian Federation, Art. 72.
4. Budget Code of the Russian Federation, clause 3, art. 72.
5. Khotenko Ya. A. Financial service of the Soviet Army during the Great Patriotic War. - M .: Voenizdat, 1972 p., Pp. 310-185, 190-245.