Military Review

Full understanding is required

Implementation of the state defense order depends on the degree of cooperation between the military and manufacturers

At a press conference devoted to the implementation of the state defense order-2013, Deputy Defense Minister Yury Borisov noted positive trends in the implementation of the program of re-equipment of all types and types of troops. But a little later, he admitted that the military department and the military-industrial complex were faced with significant difficulties that threaten the effectiveness of the effort expended.

“We began to meet more often,” Yuri Borisov answered the question about what has changed in the relations between the Defense Ministry and defense industry enterprises. So he identified the main problem in the implementation of the GOZ: the methods and techniques developed as early as 90 – 2000, when there was little or no money allocated for the defense industry, no longer correspond to the situation.

Judging by the figures at the press conference, the state defense order for 2013 is almost complete. According to Borisov, the troops supplied more than 50 percent of the annual volume of the main types of weapons and military equipment (IWT), and by 1 January 2014, this figure will be 95 percent. Another three percent of high-tech systems with a complex production cycle, the military should receive in the first quarter of next year.

Full understanding is required

“At the moment, the volume of state contracts for GOZ-2013 is more than 95 percent of their planned volume,” said Yuri Borisov. According to him, 97,5 percent of the planned transactions will be contracted in December, although in October the Defense Ministry stopped the transfer of tender materials to Rosoboronpostavka, where the tender procedure is carried out. The remaining 2,5 percentages are for infrastructure construction.

Despite such high rates, noted Borisov, there are problems. A number of enterprises could not start deliveries of weapons and military equipment in planned volumes due to the unavailability of the production base and specialists. Manufacturers entered into contracts, stating one figure, and later reported that the subcontractors overestimated the prices of their products, so you need to revise the terms of the contract in the direction of increasing the value of the original product. There are claims to the Ministry of Defense itself, which carried out transactions without proper risk assessment with enterprises that are obviously not ready to fulfill the conditions within the specified time frame. The problem of the defense industry is still the low quality of the products.

“We abandoned the advance system when the Ministry of Defense paid in advance from 40 to 100 percent of the work and serial production of products. This was used by unscrupulous managers who placed money on bank deposits, and then demanded an increase in costs and contract prices, ”said Borisov and clarified that last year such agreements were 10 – 12 percent, and from 2014, their number would fall to 0,4 percent .

Andrei Frolov, editor-in-chief of the industry magazine Export Arms, told the Military Industrial Courier newspaper that these problems were predicted by specialists during the first contracts: “The Defense Ministry did not have experience in large-scale procurement, and many enterprises do not produce in large volumes. The last time a lot of money was allocated during the Soviet Union. But then there were other principles of cooperation and organization of work. ” From the very beginning it was obvious to him that during the formation of the state defense order before 2020, the interests and possibilities of industry were not taken into account.

“The final producer cannot influence its subcontractors and counterparties, especially the private enterprises of the second and third levels, which overestimate the prices of products and break deadlines. But when the money is advanced, it is very difficult to maneuver under a government contract. We have to take loans or compensate for losses due to working capital. Therefore, many companies are trying to sabotage government orders in order not to go broke and not to cease to exist, ”Frolov said.

As Yury Borisov admitted, there were problems with the performance of the state defense order as early as last year: “We started work in November 2012 of the year, since my appointment to the post. We had to manually adjust the parameters at the government level, make changes not only in the plans for 2013, but also for 2014 and 2015 in order to optimize measures and costs and get closer to the strategic plans of the armaments program. ” The existing set of problems forced the military to develop new pricing systems, agreements, etc.

New financial schemes

Next year, the Ministry of Defense will begin the transition to full life cycle contracts, when enterprises develop, produce, and also maintain and repair their products until the moment of utilization. There will be no advance system, but long-term (three to ten years) contracts will appear with financing and control of each stage of development work, tests and serial production. In the opinion of the leadership of the military department, this should solve the problems of multiple cost overruns, disruptions in delivery, and also relieve the military of the hassle of repairing weapons and military equipment.

A representative of the central apparatus of the Ministry of Defense, familiar with the situation, told the MIC about the position of his department: only strict control and penalties would force the defense industry to fulfill its obligations: “Now we have several classic protracted when money is allocated and spent by enterprises, but there is no result . In particular, at the United Shipbuilding Corporation in the Far East, the “Perfect” corvette of the 20380 project is being built. The United Aircraft Corporation will not surrender the reconnaissance aircraft Tu-214Р, and Almaz-Antey - the long-range missile 40H6 to the C-400 complex ”. According to him, the leadership has already decided to change the terms of contracts and the allocation of additional funding to performers.

“Starting next year, in new contracts, enterprises will perform work for the money received on credit under state guarantees. The loan is closed upon presentation of the stage of work or finished products to the customer. If necessary, enterprises will work on commercial loans on the security of profits or property or invest their working capital. But we will advance in advance some of the most important works. According to this principle, the creation of the Armata heavy tracked platform has already been organized, the arrival of which to the troops is expected in 2016. The Ministry of Defense is financing the preparation of capacities for the production of a new machine, ”the representative of the Ministry of Defense added.

He noted that the new approach requires close cooperation between the military and the defense industry, so that the money is allocated in the right amounts, and the loans do not have to be taken more than expected. After all, if due to problems with financing the deadlines are broken, then the manufacturer receives penalties and may be left without profit or even become bankrupt.

“A credit scheme is a big burden for enterprises. It is necessary to guarantee and accurately invest your money. On the whole, in the defense-industrial complex, the invested own funds amount to 35 – 50 percent, ”said Yury Koptev, chairman of the scientific and technical council of the Rostec corporation, at a press conference. He is confident that when using the current financing scheme, enterprises will never be able to form their own funds in the right amount.

According to the Deputy General Director of Uralvagonzavod Corporation, Vyacheslav Halitov, only long-term agreements will allow for full-fledged production of military products in the right time. “We signed a three-year contract with the Ministry of Defense for modernization tanks family T-72B / B1, which we have been conducting for two years. This allowed the tank industry to plan its work. Thanks to the Ministry for finally switching to long-term agreements, this simplified the work, ”he said and recalled that according to the previous scheme, contracts for one year were concluded in February - April, and in November the military demanded products. Yuri Borisov, in turn, confirmed that, compared with 2011, the volume of long-term contracts for 2014 doubled and amounted to 50 percent of the annual volume of 2013.

An innovation was the decision of the leadership of the Ministry of Defense with 2013 of the year to enter into part of the contracts not with the manufacturers themselves, but with the holdings and corporations into which they belong.

“Before 2012, the military concluded contracts with individual enterprises of our concern,” said the representative of JSC Concern PVO Almaz-Antey. - Joining and tuning of all elements and the delivery of the air defense systems themselves were carried out later. Now we have a centralized contract directly with the parent company. ”

At the enterprise, centralization was called the right decision, although creating additional difficulties “Almaz-Anteyu”.

“All risks for the supply of individual items are now borne by the contractor. Last year, the C-400 system was docked, but, unfortunately, individual machines manufactured by the Bryansk Automobile Plant did not arrive until December, ”said the representative of the concern.

Earlier this year, the Ministry of Defense announced plans to transfer its repair capacity to manufacturers of military products, getting rid of the overhaul of equipment. According to the military plan, only TO-1 and TO-2 should be conducted in the troops.

“The ideology of repair and service has undergone a radical revision. We took the initiative to transfer to manufacturers the functions of medium and major repairs, modernization, as well as assets concentrated in Oboronservis, ”Deputy Minister Borisov said at a press conference. According to him, the government of the Russian Federation approved these plans. “De facto, we have already transferred assets to defense enterprises, they are governed by controls. And de jure the process will end no later than the middle of next year, ”added Borisov.

In the Ground Forces, work is proceeding on schedule. In an interview with Military Industrial Courier, the Officer of the Staff of the Southern Military District confirmed that the situation with defective weapons and military equipment had improved since the beginning of the year: “By a bad tradition, automotive equipment is the most troublesome. Previously, district repair plants often persecuted frank marriage, had to be returned by complaint. When they were replaced by private outsourcing firms, the situation did not become better. And when civilian services were refused, repair teams from manufacturers arrive at the troops on the first call and promptly eliminate the problems. ” Also, there are no problems with the transfer of equipment to the factory.

“We recently received otkapitalnye KamAZ and Ural. There are no complaints at all, but earlier, at least half of them would be returned on complaints, ”the officer of the Southern Military District rejoices.

In contrast to the Ground Forces, the new Defense Ministry scheme encounters great difficulties in the shipbuilding industry and in the Naval navy. How to organize a full life cycle service for ships and submarines? They are built in shipyards, but served at specialized shipyards. As VPK was told at one of these enterprises, USC still cannot find a place for them in the future system of the full life cycle.

“For example, Sevmash released the ship. It turns out that he must repair it. Its capabilities allow it. But why then do you need the Zvezdochka ship repair center? They never explained it to us, ”the shipbuilding engineer wonders.

Mikhail Barabanov, editor-in-chief of the industry journal Moscow Defense Brief, told MIC that there was a way out in introducing new forms of ship repair organization: “The situation is complicated due to both the Navy and the Defense Ministry, which provide insufficient funding, and the enterprises themselves. In the new system of a full "life cycle" it was decided to abandon the average repairs and go to repairs on the technical condition. This is consistent with global trends. In addition, life-cycle contracts must be concluded with USC, which will determine the implementing companies. But any correct and timely idea is called into question: how to implement it in our conditions? ”

Nevertheless, it should be noted that last year's pessimistic forecasts about the inability of the Ministry of Defense and the military industry to come to an agreement did not come true. In just one year, a new system of contracting and servicing weapons and military equipment was built. As industry representatives say, a lot has been achieved. But there are also significant problems in the sphere of financing - enterprises are often exposed to unreasonable risk, investing large working capital or getting into loans. The main thing is that the Ministry of Defense and the military-industrial complex realized that without a dialogue, it would be impossible to fully implement the state defense order by 2020.

Military acceptance and science

Over the past 20 years, the problem of poor quality military products has become one of the most painful for the military. The peak of returns to manufacturers fell on the 2011 and 2012 years. In 2011, the Ministry of Defense prepared a 2271 complaint, in 2013, it was already 3154, that is, more than 1,4 times. The military department believes that this is due to the liquidation of the institute of military acceptance by the former minister Anatoly Serdyukov and the reduction of military missions at manufacturers.

“By the end of 2013, it is planned to staff military offices with officer posts up to 80 percent, and civilian personnel up to 85 percent,” said Yuri Borisov and added that control and pricing functions had been returned to these bodies.

In the military-industrial complex, the decision of the military is skeptical and argue that the situation will improve when all idle enterprises switch to mass production.

“We have previously informally agreed with the military acceptance. There have been fundamental cases, but basically everything was decided, as they say, in working order. The current large return on claims is associated with an increase in production while reducing the time and constant pressure of the Ministry of Defense. The military is not only threatening, but just that - impose penalties. And it is difficult for us to be reorganized from piece production on large-scale. This is for those who work on foreign orders, in general, well, everything is on their stream. We are not working for export, we have to rebuild, learn on the go, deliver products at any cost, because we have been living under the Damocles sword of fines for the last six months, ”the deputy head of one of the defense factories complained to“ VPK ”.

Under Anatoliy Serdyukov, the research institutes responsible for formulating the military-technical policy were transferred to the military research centers and subordinated to the Department of Military Education of the Ministry of Defense. Now they have returned to the jurisdiction of the main commands and commands of the clans and types of the Armed Forces.

The commander of the Air Force "VPK" said that the reform Serdyukov did not have time to cause significant damage.

“It was planned to introduce the position of deputy minister of defense for science in the central office. Under it, all organizations with the name "scientific" were transferred to the Department of Military Education under the leadership of Ekaterina Priezzhevoy. 13 and 30 Central Research Institutes became part of VUNC Air Force in the city of Voronezh. But because of the resignation of Serdyukov, the full implementation of the plans failed, the Central Research Institute remained subordinate to the Commander-in-Chief of the Air Force. A similar situation exists in other scientific organizations. Now the scientific institutes have resumed their planned work on the formation of the perspective image of the Air Force. At the same time, experience with VUZT showed that Voronezh citizens can help us. The fact is that their training centers are also subordinated to the Commander-in-Chief of the Air Force and, by interacting with them, we will be able to organize work in promising areas, ”said the officer of the Air Force Main Committee.

Viktor Murakhovsky, editor-in-chief of the Arsenal of the Fatherland industry magazine, emphasized that the commanders and commanders are personally responsible for the development of the subordinate types of the Russian Armed Forces and the armed forces: “Now the formation of a military-technical policy is becoming an important element. And that was a strange situation, when the commander-in-chief could not directly interact with scientific organizations leading the work in his interests, could not lead the process and did not know exactly what was happening there. ”

Another decision of the Ministry of Defense was the rejection of the independent development of samples of technology, similar to that used in the national economy. “First of all, it concerns medical and engineering equipment,” said Yuri Borisov at a press conference. Starting next year, the military department will no longer develop its own excavators, other earth-moving machines, fire engines and ambulance carriages, and will take advantage of civilian models. ”

The unpreparedness of the material base of the Armed Forces to receive new technology forced the Ministry of Defense to reorient some of the funds allocated for the purchase of equipment for the construction of infrastructure.

According to Borisov, the funds will be used for the modernization and construction of new port facilities in all four fleets of the Russian Federation: “First of all, this concerns the Pacific Fleet and the Novorossiysk naval base”.

Military historian, author of books on stories The Navy of the USSR and Russia Dmitry Boltenkov agrees that the construction and modernization of infrastructure is no less important a question than re-equipment: “Due to the unavailability of the bases, it is impossible to replace rapidly aging nuclear-powered submarine-borne carriers on the Pacific Fleet. In the Far Eastern waters, our strategic nuclear forces are represented by submarines of the 667BDR project. It was planned that they will be replaced by "Boreas". But the base in Vilyuchinsk is still not ready for them. ” He noted that due to political problems with Ukraine and the lack of a contractual base, it is impossible to place the newest ships and submarines being built for the Black Sea Fleet in Sevastopol. “Therefore, they began construction in Novorossiysk. But you need to finish it before the moment when the first Varshavyanka will arrive there in 2015. Without normal infrastructure, ships and submarines will quickly become worthless, ”says Boltenkov.

This year, the Ministry of Defense has done a lot to reform the state defense order system - new schemes, legislative acts have appeared. 2014 should be decisive when the system of long-term contracts for the full life cycle, the new work financing algorithm, passes the test. The implementation of the entire GOZ-2020 depends on how much all these projects will turn out.

In 2011 – 2012, the military department chose to conclude a number of short-term contracts directly with manufacturers, having immediately advanced if not one hundred, then at least 45 percent of work. Due to the reassignment of research institutes, the Armed Forces contracted a large number of unnecessary armaments and military equipment. In pursuit of indicators of the development of the money allocated for contracts, the Ministry of Defense refused to invest in infrastructure.

Starting next year, the military department refuses the advance system and begins to conclude a limited number of long-term contracts directly with holdings and corporations. Manufacturers will have to bear the share load, investing in each stage working capital or credit funds. The nomenclature of weapons and military equipment is reduced, good money is allocated for capital construction of infrastructure, and specialized institutions have returned to the formation of the technical appearance of the weapons ordered.

Presented figures and solutions should reassure. There is an increase in production, the number of contracts. But a lot depends on the mutual understanding of the Ministry of Defense and the military-industrial complex, and in the absence of it, the allocated funds will go nowhere as undeveloped, enterprises will suffocate under the burden of fines and unpaid loans. Already, the defense industry is feeling hard pressure from the Ministry of Defense. It is possible to understand the military - too often, enterprises have lately disrupted all terms and drove a marriage, and not only in small industries. Last year, the delivery of Su-34 fighter-bombers and Su-35 fighter aircraft by the United Aircraft Building Corporation was questionable. The C-400 ZRS is still left without the 40H6 long-range missile. The epic continues with the submarine "Severodvinsk", although the United Shipbuilding Corporation promises to pass it in the outgoing year.

It is hoped that in the near future, Yuri Borisov will say not only “we began to meet more often”, but also “we have reached a full understanding”.
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  1. zao74
    zao74 27 November 2013 10: 39
    Until there is criminal responsibility, up to executions for sabotage and theft, there will be little sense.
    1. smel
      smel 27 November 2013 15: 13
      I agree ... The phrase that the reform of Serdyukov did not have time to do any tangible harm is especially touching ... From this pest and harm we will not recover for a long time. But in addition to the smelly dacha, he has nothing to impute. Although he returned to the family. So forgive. Here's a laugh
      1. timer
        timer 28 November 2013 00: 51
        I’m not going to write about Serdyuk anymore, but it’s still there (Putin doesn’t make friends and will prepare warm places, his mother’s leg). I’m talking about something else, in essence, I must strictly follow the rule of an integrated approach — analysis of problems + punitive measures for sabotage and fraud with prices and terms (according to Stalin). And as regards the organizational and financial side of the issue, it is necessary to organize the ministry of the military industrial complex and a specialized state bank through it and finance the military industrial complex.
    2. seller trucks
      seller trucks 27 November 2013 15: 47
      maybe I’m not right, but here it’s a double-edged sword, in the first place the enterprise will have to be credited, i.e. give some part of the profit to the banks (with a piece of paper?) and the second thing is that the Defense Ministry, in which case, can refuse technology, and these are serious risks, here you can really introduce a scheme of non-repayable deposits, but this is again a fraction of the bank. And even with all this, a sliding scheme between the enterprise - the bank is not excluded.
      1. Russ69
        Russ69 27 November 2013 16: 02
        Quote: seller trucks
        maybe I'm wrong, but here it’s a double-edged sword, first of all, the company will have to be credited

        These are loans under state guarantees, their service is scanty and they are issued by state banks, such as Sberbank or VTB.
        and the second is that the Defense Ministry, in which case, can refuse technology

        These cases are also registered ... But everything happens, of course.
      2. APES
        APES 27 November 2013 16: 02
        Quote: seller trucks
        it's a double-edged sword

        turns at one end - I would say so.

        No one is interested in the state defense order being clear and transparent ....
    3. AVV
      AVV 27 November 2013 16: 27
      Without proper control and economic sanctions, the good work of the Military Acceptance, production in normal batches and quality cannot be established !!!
  2. Peaceful military
    Peaceful military 27 November 2013 15: 14
    "The patient is more alive than dead." This is already too little, and time is running out. A Stalinist breakthrough is needed. Only to whom to implement it? Clone Stalin? Rave.
    1. major071
      major071 27 November 2013 19: 10
      Clone Stalin

      Alas, sir, this is not yet subject to us. And I WANTED!
      1. Peaceful military
        Peaceful military 27 November 2013 22: 24
        Quote: major071
        Clone Stalin

        Alas, sir, this is not yet subject to us. And I WANTED!

        Alas, colleague, alas. sad
  3. PPL
    PPL 27 November 2013 15: 17
    I’ll intercede for allies.
    ... and a little later they reported that subcontractors overestimated the prices of their products, so it is necessary to revise the terms of the contract upward ...

    The old song of the head - the subcontractors are to blame for everything! But it is the head that removes the main "froths", and the subcontainer, as a rule, is always in the "dry" residue (although it has its own sandwich, albeit not with caviar, but with sausage).
  4. avg
    avg 27 November 2013 15: 20
    “The final producer cannot influence its co-contractors and counterparties, especially private enterprises of the second and third levels, which overstate the price of products and disrupt the deadlines.

    Look at how many Toyota subcontractors are, but for some reason they don’t complain about the quality.
    1. vladimirZ
      vladimirZ 27 November 2013 15: 49
      Look at how many Toyota subcontractors are, but for some reason they don’t complain about the quality.

      Toyota has a massive stable production, nobody deliberately bankruptized Toyota, didn’t ruin it like our defense enterprises, where life without orders and financing was barely warm for more than 20 years.
    2. APES
      APES 27 November 2013 15: 58
      Quote: avg
      Look at how many Toyota allies

      This is not a valid example.
      In Toyota in particular, and throughout the Western automotive industry, all issues of industrial cooperation are worked out 2 years before the new model entered the market.
      Toyota has the right to influence the production technology of any of its allies
      Toyota fully controls the cost of its allies, since those, as a rule, are completely dependent on it
      further, if you take the same Toyota - does it often change the allies?
      and another significant factor - there is large-scale production
      to all this - a coordinated and one-time design, which is very important - and the leader of this process is the parent company

      I liked the whole article:
      will begin the transition to full-life contracts, when enterprises develop, produce, and also service and repair their products until disposal

      it can really affect both the quality and timeliness of the implementation of the defense contracts, it even allows you to put things in order in pricing, in terms of control
      1. avg
        avg 27 November 2013 16: 13
        This is not a valid example.
        In Toyota in particular, and throughout the Western automotive industry, all issues of industrial cooperation are worked out 2 years before the new model entered the market.
        Toyota has the right to influence the production technology of any of its allies

        Example very good. correct. No one bothers to introduce modern production methods and the scientific organization of labor. Not only is there a firm order, so the state still allocates money for the re-equipment of the island. Moreover, we all know that the production of weapons, very good. profitable business. Maybe it's about snickering leaders and lack of competition. Have you heard anywhere else that faulty equipment comes to the troops from the enterprise?
  5. patriot2
    patriot2 27 November 2013 15: 28
    The unpreparedness of the material base of the Armed Forces to receive new technology forced the Ministry of Defense to reorient some of the funds allocated for the purchase of equipment for the construction of infrastructure.

    With infrastructure, everything must begin! And then something where the aerodrome reinforced concrete slabs were pulled away. You can’t put the SU-34 on the ground. And the piers for the ships of the Navy (I'm not talking about a base such as Gremikha)? Ruined and wept. It will take longer to build, but it is an urgent need.
  6. mountain
    mountain 27 November 2013 15: 30
    The implementation of the state defense order depends on the degree of cooperation between the military and manufacturers.
    As well as prosecutors and supervisory authorities. And the second should be twice as much.
    1. APES
      APES 27 November 2013 16: 26
      Quote: mountain
      And the second should be twice as many

      Yeah .... as always - one digs - 10 control - 20 control

      very effective .........
      1. alone
        alone 27 November 2013 22: 13
        Quote: APES
        Yeah .... as always - one digs - 10 control - 20 control

        very effective .........

        you forgot to add about 30 "reformers" who are actively "reforming."
        1. APES
          APES 27 November 2013 23: 09
          Quote: lonely
          30 "reformers"

  7. Ivanovich47
    Ivanovich47 27 November 2013 15: 36
    Quote: "The problem of the defense industry is still the low quality of the products."
    How it was necessary to "lower" the defense industry, so that it would produce defective military equipment. When I was studying at a military school in the 60s, We were a teacher, a former military representative. He told us in detail what a cruel military acceptance was. She almost ruled out defective products ... Unfortunately, even here Serdyukov "tried" and then shit, you bastard. Urgently need to restore the institution of military representatives!
  8. drop
    drop 27 November 2013 15: 44
    For a long time I worked in Soviet times as the head of the State Department of one Defense Ministry. The structure of orders for military and military equipment was just that. Company managers were selected so that they could organize development and production. They were responsible for everything together (Ministry, Chief Designer and Director of the enterprise) - the money was budget. I was transferred to work in the leadership of the State Institution because I had been the Chief Designer for over 15 years, created systems that were all adopted, carried out all kinds of tests, was familiar with all the Commanders in Chief. Now look, who are the heads of the enterprises? Who are the main designers? And it will become clear to you what to do. Responsibility and remuneration in industry, science should be different. Compare the salaries of bank employees, in trade, in law firms, etc.
    1. coserg 2012
      coserg 2012 27 November 2013 18: 46
      I agree with you completely, we need poets of their craft and not stupid performers!