The end of September of 2011 was marked by harsh reaction of President Dmitri Medvedev at frustration of State Defense Order’2010 and almost-on-the-brink-of-collapse State Defense Order’2011 (SDO). It is worth to mention that after the collapse of USSR none of SDOs were successfully fulfilled. Before 2000 the fulfillment of arms procurement was impossible due to lack of funds. Afterwards, even despite the uptick of the Federal Budget, and its military spending part in particular, the State Defense Orders were doomed to be failed as a system of arms purchase were not structured. The reorganization of the system, at its institutional level, was over in 2010 after three years since Anatoliy Serdyukov, the first civilian Minister of Defense of the Russian Federation, entered office.
The situation around State Defense Order’2010 and 2011 resonated with public, heads of companies and enterprises of Military-Industrial Complex (M-I-C) and governmental officials of different levels. That is why, to see into the matter in its entirety, it is worth examining the system of arms procurement for the Russian Armed Forces starting from the Soviet Union times up to today and try to answer the question whether Russian Army, Air Force and Navy would receive up-to-date military hardware in future.
End of Soviet Union Times and First Years of Russian Federation
The arms procurement system for Armed Forces and other law enforcement services at the end of 80s composed of governmental managerial institutions, which control over M-I-C, and specialized bodies of national security, defense and law enforcement agencies.
As far as Soviet Union Armed Forces are concerned, the main body in the arms procurement system was Director of Armaments. It remained trough 90s and up to 2007. Along with Director of Armaments, Directorates of Branches and Services of Armed Forces as well as Inter-Services Departments (e.g. Main Missile and Artillery Directorate, Main Automotive-Armored Tank Directorate of the Ministry of Defense) played a role of customers of weapons and military equipment. The mentioned directorates executed applications on weapons and equipment acquisition orders in accordance with defense needs. Besides, the directorates executed applications on R&D and repair-maintenance of military hardware. It is worth to mention that all applications on arms procurement correlated with capabilities of Soviet Union and later Russian economy. Afterwards the applications were underpinned by the Budget at the level of the Ministry of Finance and Government. At the final stage PM and President signed them and submitted to the State Duma.
As a parenthetical note, in case all these procedures had been fulfilled properly within 1992-1996 a State Defense Order would not have been executed because of the way a Federal Budget had been adopted – antedate. Of course, it is clear, that financing of arms procurement were put aside and only strategic arms and some hardware that were lobbied at the highest level of the sate hierarchy, were fielded in the Armed Forces.
The first attempts to streamline the system of arms procurement was done in 2003, right after financing of the military expenditures at a proper level. The same year National Committee on Defense Order under command of Russian Defense Ministry was established. The first Head of the Committee was Georgiy Matyuhin, who came from the Federal Agency for Government Communications and Information that was dissolved in the same year. The Committee was planned to be involved into coordination and control over price determination for arms procurement. However on practice the Committee can be considered as an abortive.
The beginning of 2000s
In 2004 some big reshuffles took place in the Russian establishment when Mr. Putin was granted the second tenure in the political Olympus. When Georgiy Matyuhin retired, the office was taken by Andrey Belyaninov, than Deputy Director General of Russian Defense Export State Corporation. Belyaninov is considered to be a member of Putin’s inner circle. As a professional financier he managed to recruit experts to the Committee (in 2004 it was renamed as Federal Service for Defense Contracts of the Russian Federation, short name Rosoboronzakaz) and wage the analysis of military procurement methods, tenders and fulfillment of State Defense Orders. The main task of the Federal Service was to play a role of an Audit Office in the system of Military-Industrial Complex. Belyaninov and his subordinates garnered significant and comprehensive information that later was used to make major decisions in the field of State Defense Orders.
In May 2006 Belyaninov was appointed to a new position of Director of the Federal Customs Service of Russia; and Rosoboronzakaz was led by Three-Star General (retired) Sergei Mayev, who was the former Chief of Main Automotive-Armored Tank Directorate of the Ministry of Defense and Deputy Head Federal Service for Defense Contracts of the Russian Federation. Mayev continued to strengthen the role of Rosoboronzakaz that was finally turned into regulatory and supervisory as well as licensing authority. In 2006 the Federal Service for Defense Contracts was entitled to control over arms procurement within a State Defense Order in accordance with Federal Law number 94 (previously the responsibility was laid upon Federal Antimonopoly Service). In 2008 Rosoboronzakaz was commissioned to license development, manufacture and maintenance of military hardware and ammunition.
It is worth to mention that almost at the same time, in 2006 a new institution was established – Governmental Military-Industrial Commission. The Commission was said to be another element that is aimed at control over fulfillment of the State Defense Orders and over Military-Industrial Complex. In March 2006 Sergei Ivanov, than Ministry of Defense, was appointed Chairman of the Commission. Actually this Commission existed earlier, since the beginning of 90s as a successor of Military-Industrial Commission which acted under Council of Ministers of the USSR. However, it had not played any significant role at the beginning of new Russian history. With Ivanon as a Chairman, the Commission was awarded a status of a permanent body and an active list of incumbents was formed.
In 2007 another institution, Federal Agency for Military Hardware and Armament Procurement (Rosoboronpostavka), which was in the Government structure, was established. The functions of the Agency were planned to be similar to Direction Generale pour L’armement – DGA (France). The civilian institution was entitled to provide a direct contracting of purchased armament for all law enforcement agencies of the Russian Federation. The first Chief of Rosoboronpostavka was Alexander Denisov, than Deputy Director of the Federal Service for Military-Technical Cooperation.
According to the plans, the overall structure of arms procurement should be the following: Military-Industrial Commission develops and adopts a strategy, Federal Agency for Military Hardware and Armament Procurement implements the strategy and Federal Service for Defense Contracts provides control over it.
However, nothing was utilized according to this scheme. There are several reasons of that. First, when the Federal Agency for Military Hardware and Armament Procurement was created it did not have even an office to set incumbents in it. Second, in 2008 Viktor Cherkesov was appointed as the Head of Rosoboronpostavka. This position is said to be a transition point along his political career as prior to the appointment he gained some political weight and was looking for better opportunities on the political scene of Russia.
As a summary of events that took place in 90s and beginning of 2000s, it can be noted that enormous failures of today in the scope of State Defense Orders 2010 and 2011 were laid down at that period of time. Such lamentable results stemmed from the fact that mainly the heads of different Agencies and Commissions were not professionals and their nominations were possibly only due to a sheer fact of clientēla, that still exists in the Russian Federation among state high ranking officials.
Serdyukov’s Reforms
In February 2007 a new Minister of Defense of the Russian Federation was appointed Anatoliy Serdyukov, than the head of Federal Tax Service. Among his first decisions in the field of arms procurement was subtraction of rights to enter into contracts on arms procurement from Director of Armaments, Directorates of Branches and Services of Armed Forces, such as Main Missile and Artillery Directorate, Main Automotive-Armored Tank Directorate of the Ministry of Defense. That time they were granted privileges only to define the technical characteristics of military hardware. Reportedly the rights to enter contracts were supposed to be delivered to Military Hardware and Armament Procurement, and it would be logic. However, the new Minister of Defense decided to create the Department of Government Contract of the Ministry of Defense.
In May 2010 the head of Federal Agency for Military Hardware and Armament Procurement Viktor Cherkesov was retired. Right after this according to a Presidential Decree the Agency was reassigned from the Government to the Ministry of Defense. A new chief of Rosoboronpostavka was appointed Nadezhda Sinikova, who previously was a Deputy head of Federal Tax Service.
Another step by Serdyukov was done in June 2010. Vladimir Popovkin was appointed First Deputy Minister of Defense and became in charge of supervising over arms procurement. As a result Director of Armaments, Directorates of Branches and Services of Armed Forces, such as Main Missile and Artillery Directorate, Main Automotive-Armored Tank Directorate of the Ministry of Defense came under his command.
As a result of the Serdyukov’s reforms in 2007-2010 a line between Rosoboronpostavka’s responsibilities and the First Deputy Minister of Defense had been drawn. Since that time, Federal Agency for Military Hardware and Armament Procurement became in charge of direct contracting and other economic matters concerning arms procurement; as far as the First Deputy Minister of Defense with his subordinate bodies such as Director of Armaments, Directorates of Branches and Services of Armed Forces, such as Main Missile and Artillery Directorate, Main Automotive-Armored Tank Directorate of the Ministry of Defense, are concerned, his main tasks were set as defining military-technical policy and elaborating needed armament technical characteristics.
Before coming up to the current situation with the State Defense Order’ 2010 and ‘2011, it is necessary to summarize the results of the reforms in Arms Procurement. In this context it seems quite pertinent that when Serdyukov became Minister of Defense the system of procurement became streamlined that allowed to increase the volume of purchased military hardware and provide proper control over expenses. However despite these achieved results, SDO’2010 was not fulfilled and this fact caused sharp rebuke by President Medvedev, some contracts in the scope of SDO’2011 have not been signed yet.
The reasons are way too serious and it is of primary importance to get to the bottom of them. To be continued.
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