Russian government is about to solve the most acute problem faced by the military-industrial complex
24.11.2006 00:08

In our reports from several recent successive exhibitions and conferences it has been emphasized that the problem of pricing in the MIC is considered by the directors as a factor limiting economic development. It was also repeatedly acknowledged by the representatives of Rosoboronexport and the government, who said that “the best minds are looking for the solutions”. Seemingly the solution has come.

The governmental decree on pricing policy within state defense order (SDO) is a much awaited law. According to the experts this document will allow the state customers to form the initial price of the contract by uniform methods, and this will make the order in all pricing policy. How much modern military hardware and even simple army ammunition cost? This question is not simple. During the era of "the wild market" pricing has been neglected, in fact it developed with no interference whatsoever. There was an opinion that the market will adjust all. In practice all turned out not so perfect, and as a result costs of not only the most complicated hardware, but also of simple accessories began grow, to put it mildly, chaotically.

There were true documented precedents when the usual bolt suddenly cost more than a good microcircuit. The present decision puts things in order in this business. Certainly, the state will not administratively underestimate costs. On the contrary, the costs will be optimized according to the complexity of a bought product. It is already clear, that the good hardware cannot be cheap. There were precedents when the price of the contract was specially underestimated by the supplier to win tenders. Now such cunning things will be hardly possible. Making the price too high will be impossible as well. The final price, certainly, will differ from the initial one, but will be in quite reasonable frameworks. However, according to the experts of the defense industries this decision of the govt is till to be improved and specified.

Some quotations: The governmental decree of November, 4, 2006 N 656 Moscow “On the improvement of the rules of determining the initial price of the state contract under the state defense order by way of tendering, and also on the price of the state contract in case placing the state defense order with one single supplier (contractor)”. In compliance with clause 3 of the Federal law "About the state defense order" the Government of the Russian Federation decides:

To approve the above Rules of determining the initial price of the state contract under the state defense order as well as the price of the state contract for single supplier (contractor). The rules:

1. The present Rules establish the order of determining by the federal executive authorities - the state customers of the state defense order (hereinafter - the state customers) the initial price of the state contracts under the state defense order through tendering as well as the price of the state contracts under the state defense order with unique suppliers (contractors).

2. State customers determine the initial price of the state contracts under the state defensive order in relations to:

a) deliveries of the goods (works, services) for which there is a functioning market, - on the basis of the analysis of a market price of the specified goods (works, services) determined in comparable economic conditions at the moment of concluding the contract.

b) constructions, reconstruction, modernization of objects and carrying out of design and exploration work - on the basis of budget cost of the corresponding works (services), approved in due order.

c) deliveries of the goods (works, services), connected with serial production of arms, the military and special hardware, their raw materials and spares, other military property, except for the goods (works, services), specified in the paragraph "a" herein, - on the basis of the structure of expenses for such goods (works, services) and a level of profitability for their manufacturers, defined in due order OR on the basis of the price at which such goods (works, services) had been bought in the previous periods, using the corresponding price indexes factors reducing the costs of their manufacture.

d) deliveries of the goods (works, services) linked to creating the new (modernized) samples of arms, military and special hardware, spares and raw materials, - on the basis of the analysis of the prices evaluated through feasibility studies, precedents in analogues samples and with using price indexes on the corresponding goods (works, services).

3. State customers determine the price of the state contracts under the state defensive order with unique suppliers in following cases:

a) deliveries of the goods (works, services) dealing with natural monopolies, and also rendering services of water supply and water removal in conditions of natural monopolies, - according to the tariffs established for subjects of natural monopolies.

b) ffulfilling the works on maintaining the mobilization capacities - on the basis of budget costs approved in due order.

c) fulfilling performance the works (services) which can be carried out only by executive authorities according to their power or official entities and the state unitary enterprises, as well as delivering the goods (works, services) by the establishments of criminally-executive system in the cases specified by the Government of the Russian Federation, - on the basis of the data about the structure of expenses of the specified goods (works, services) requested by the state customer from the unique supplier (contractor) and on the basis of the prices for such goods (works, services), in previous year.

4. In both cases the state customers are obliged to consider stipulated allocations of the state budget.

5. The state customers can develop the methodological recommendations, allowing to consider peculiarities of some kinds of the goods (works, services) when determining the initial price of the state contracts and approve them in coordination with the ministry of economic development and federal service for tariffs.

News source: Shipbuilding.Ru
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