SHAH ALAM: Coming home. Back in September, 2020, I wrote about some tenders for munitions/explosives being sought by the Army. The items being sought were 120mm rifled mortar rounds, bangalore torpedoes and plastic explosives. What I did not know was that the tender for the 120mm mortar rounds was subsequently canceled.
As I mentioned in the post, the 120mm mortar rounds are for the Thales 2R2M (Rifled Recoiled Mounted Mortar) weapon mounted on the Adnans and Gempita mortar vehicles. It must be noted that the canceled tender was reissued in early 2021, and the contract was duly awarded to Shafleena Venture Sdn Bhd for a contract price of RM7.8 million.
A tender for the multi-modal transport operator (MTO) was published on January 6 to ship the mortar rounds from the Port of Cherboug in France. I am guessing that the mortar munitions was purchased from Thales’s subsidiary, TDA, since the mortar rounds are to be shipped from France.
It is likely that TDA round will be most suited for the 2R2M as it featured a semi-automatic loading system. That said the order for the mortar rounds bodes well for the procurement of the Carl Gustaff anti armor/structure weapons which tender was also canceled after the tender was published.
As I had stated before while I am in favour of open tenders for procurements there are instances where a direct purchase is necessary. Clearly the 120mm mortar rounds for the 2R2M system is one of them.
My only caveat was for them to buy it directly instead of going through the local agent for a particular item especially for items like the 2R2M 120mm rounds. Buying direct will likely cost less as the supplier will be very keen to please its customer.
— Malaysian Defence
We also bought Scorpenes direct, and G2G as well, but that didn’t escape from unnecessary controversy.
Regardless even if sometimes direct and G2G might bring some benefits and cost savings, open tender still is the least controversial and least able to be played up by politicians. It might cost more, but if it goes thru we usually gets them with no fuss.
Otherwise we will go back to the same old opaque way of doing things which we have criticise so much over the years.
It was re-tendered again last year to replace the cancelled tender issued back in 2020.
Seems getting mortar rounds from a middleman with a name like Shafleena Ventures is a wee discomforting. Get it thru an open tender process for all items. Period.
This was through open tender
The whole idea of awarding local companies to act as the go between was so these companies would be able to do various tasks related to the contract; rather than having the MAF do it and so it would also in the long term lead to long term benefits for the local industry – so the plan went. In reality in most cases local companies end up making cash without offering long term tangible benefits to the penalty the end user and taxpayer. At times companies also experience issues; to the detriment of the end user – recent examples would include the MD530Gs and Korean training ships.
A way to overcome this would be to create an agency whose task is solely to oversee procurement. Staffed by both MAF personnel and civilians this – non profit – agency would handle everything from ensuring suppliers meet contractual obligations to negotiations to actual delivery. Of course there is no political will to change things; it is politically desirable to continue the self destructing path we’ve long been on; ensuring local companies make money at the expense of the end user and taxpayer….
Would like to ask, are we incapable of locally produce 120mm mortar rounds? isnt it a litle concerning that even mortar rounds we had to imported in?
Yes there was SMEO but they pissed off Mindef so much that now almost everything is tendered out. Note in the past SMEO assembled mortar and howitzer ammunition for the Army but that was a long time go
SMEO is a GLC owned by the Malaysian government. If Mindef is unhappy about SMEO, the government can change the management. Why should it boycott SMEO?
“companies also experience issues”
Much less chance to happen if it were done thru proper open tenders and the companies selected to handle buys were more sound. INM, so far the past 3-4 years, those selected thru open tenders have done their jobs.
Create new agency = more bloat on the overbloat
Staffed by MAF & civvies = still no guarantee of no conflict of interest or corruption within the members or head itself see MACC
Nonprofit = either as a Govt dept (no civvies), or as GLC (cannot be nonprofit). Purchases are done by Cabinet approval, so if there is to be an agency it should an interdepartmental entity helm by MOF with members from the AG office, Mindef, Foreign Affairs, Home Affairs, MITI, & the CDF.
Mustaffa” isnt it a litle concerning that even mortar rounds we had to imported in?”
this issue has been addressed on a few occasions here before. We don’t have a lot of 120mm mortars and we don’t expend ammo in large quantities in order to keep prices of locally produced ammo down. The small amount of 120mm ammo produced locally will be prohibitively expensive; cheaper, faster and more practical to buy from abroad. We simply don’t have the economics of scale; all the raw ingredients have to be imported and paid for in foreign currency.
It’s fine to talk about ‘self sufficiency” but actually achieving it and not blowing as hole in the bank is a completely different matter.
not in a public forum. Google masalah SMEO and you will find the answer to your question
”those selected thru open tenders have done their jobs.”
Not really…. Also; what’s the point of having dozens of companies in what’s already a small and saturated market? Not as if having more companies leads to competition to provide value added services. Companies come and go; some exist only for a single contract then disappear; leaving the end user in a lurch. They also have to make a profit and this results in the silly situation of us paying more when it can be avoided.
”still no guarantee of no conflict of interest or corruption”
There is no ”guarantee” Mutley won’t betray Dick Dastardly in the future or that a giant octopus won’t attack Bintulu port/ There is indeed no ”guarantee” but it’s far better than maintaining the longstanding self defeating self defeating politically driven course we’ve long been on…
” companies selected to handle buys were more sound.”
Are there actual check and balances to ensure who is ”sound” or not? Have some of the companies which have been selected been really ”sound”…..?
”more bloat on the overbloat”
Not if properly managed; staffed by the right people and if tasked with a sole task : overseeing procurement. Not of there’s the political will to do it right and to ensure it works. Not if the intention is driven by the need to ensure the end user gets what he needs on time; on spec and on budget…
” either as a Govt dept (no civvies), or as GLC (cannot be nonprofit).”
No reason why it can’t be staff by a mix of military/civilians …
”so if there is to be an agency it should an interdepartmental entity helm by MOF with members from the AG office, Mindef, Foreign Affairs, Home Affairs, MITI, & the CDF.”
Fine but the task of this agency/organisation should be to ensure contractual obligations are met; to ensure deliveries; to over see certain aspects of technical requirements as laid out by the end user; to be an impartial party in determining or recommending what should be selected. etc. Something like Sweden’s FMV or South Africa’s Armscor.
”Staffed by MAF & civvies”
It will be a MINDEF entity staffed by a small group of MAF and MINDEF people. When needed MAF personnel can be seconded to this agency for specific requirements/contracts. Note that all serious negotiations which take place with regards to contracts are handled by civilians working for MINDEF and the MOF anyway.
”is to be an agency it should an interdepartmental entity helm by MOF with members from the AG office, Mindef, Foreign Affairs, Home Affairs, MITI, & the CDF.”
The Foreign Ministry’s input is only needed for specific contracts; depends on what’s being bought and from whom. The usual agencies/bodies required for approval is the MOF; PM Department’s EPU and the Cabinet [of course under Mahathir the Cabinet merely rubber stamped things] – all have to be on the same gape; herein lies the problem. . The first step is to get a requirement approved by MINDEF which in turns forwards it to the next level to obtain funding. Getting requirements approved by MINDEF is itself a cumbersome process; statements like ”you already have 2 frigates; why the need for 2 more” or ”you have managed without an AEW platform for decades; why can’t you wait 10 years more?’ are routinely heard.
I see the procurement agency as a means of streamlining the way we do things and doing it in a more effective, transparent and efficient manner but it has to be staffed by the right people; there must be the political will and it must have a certain level of autonomy in decision making. As an example; let’s say GAPU has gotten approval to replace Jernas. It’s this procurement agency which issues the RFIs and which with GAPU’s Evaluation Team looks at what’s offered. It’s GAPU’s Evaluation Team and members from the procurement agency who travel for field evaluations. When a RFQ is issued by the procurement agency; further negotiations are undertaken by GAPU and this agency to determine what fits the bill.
Prior to a contract is finally awarded being awarded the army; the procurement agency, MINDEF and the MOF negotiate to ensure the most favourable terms are met. After a contract has been signed it’s this procurement agency which ensures that contractual obligations are met; handles the travel and operations of MAF Project Teams and also oversees delivery by – when needed – issuing tenders for Multimodal transportation. The procurement agency will also have the authority – with the approval of other bodies – to recommend certain courses of action if issues with the contract are faced; whether compensation or in the worse case contract termination. Later on if things go ratshit; it’s this agency which works with the Public Accounts Committee.
Can you give examples of those selected thru open tenders that did not deliver as compared to past closed/direct/G2G deals ie LCS? Okay I give you boost, Destini facing troubles with OPV delivery but its mainly due to Covid. Any others?
“but it’s far better than maintaining the longstanding”
If we want to change something, make sure its worth the effort, not half past six angan2 taik ayam. No party should have an overriding say in the decision making as it must be all concensus agreement, hence why the interdepartmental agencies are neccessary; so no one gets the whole blame when something eventually cocksup.
“Not if properly managed”
If you introduce a new agency/organisation, it needs to be staffed, and that means additional headcount, meaning more bloating than currently.
“it can’t be staff by a mix of military/civilians”
Public servants from the Govt aren’t really civvies if we consider army/police are part of civil services. To have outside civilians involved would be to appoint them into Govt positions and such arbitrary roles could lead to self interest with prior positions in the private sector ie our exAG. Functionaries should be from within the civil services and, if needed be, their ministers.
“Sweden’s FMV or South Africa’s Armscor”
And I bet their prime directives is to prioritise local stuff over things that can be bought cheaper from outside, moreso for SA.
”And I bet their prime directives is to prioritise local stuff ”
You ”bet” incorrectly.. Their ”prime” purpose – amongst other things – is to oversee procurement; by ensuring the end user gets the best of what is offered; either locally or from abroad…
”Public servants from the Govt aren’t really civvies”
Appreciate the nuances but irrespective of how one personally views the issue the key fact remains that contractual; negotiations are manly done by non military staff employed by MINDEF and the MOF and that a procurement agency would be staffed by MAF and non MAF people…
‘meaning more bloating than currently.”
”Bloated” by the very definition of the word implies more than the actual number of staff needed’ which are superfluous to actual requirements. I’m aware of the very definition of ‘bloated” in this context and have been pointing out for years the fact that various HQs we have are ”bloated” and are staffed by political appointees or those in cold storage but thank you for making the effort iin explaining the very definition of’ ‘bloated” in this context…
”not half past six angan2 taik ayam. No party should have an overriding say in the decision making as ”
Again – since you missed it the first time around – this procurement agency will have minimal actual standing staff but when a need arises will have extra – MAF personnel – seconded to assist in certain procurement programmes. As for your ‘half past six angan2 taik ayam” – again – there must the the political will; the right staff, and a willingness to improve things rather than stick to the present course. As for your your ”overriding say” naturally this agency will not have it and neither can it make
arbitrary decisions. The whole idea of having a procurement agency is to do things better; more efficiently; in a more practical manner and in a more cost effective way; rather than the self defeating policy we have in place…. Contrary to your assumptions it’s not intended as window dressing or as another attempt to create another level of bureaucracy….
Feel free to disagree – no skin off my back – but this agency would be a genuine and concentrated attempt to improve things; it is not a panacea and not intended to be. I don’t have all the answers but know that things have to change for the better BTW; not merely for the sake of it or for your ”half past six angan2 taik ayam”
”Can you give examples of those selected thru open tenders that did not deliver ”
Always glad to oblige. Numerous examples over the years; helmets found to be defective because the contractor cut corners by sub standard material; a ammo storage facility in which the contractor used concrete rather than rods of a certain thickness; uniforms which had sub standard material and faded after a few washings; run flat tyres which weren’t ”run flat”; numerous small companies which went bust before delivering the spares/gear they were contracted to deliver; ammo delivered found defective; the list goes on on; all via ”open tenders”. Little accountability; no proper oversight; no desire not to repeat certain mistakes.. You want more details on open tenders which went ratshit; I will oblige….
”hat did not deliver as compared to past closed/direct/G2G deals ie LCS? ”
It’s not as simplistic as suggesting ”open tenders” are always better or vice versa compared to closed ones. The problem is the very system we have in place; one intended to benefit the local industry; rather than the end user or taxpayer; the prime reason we are n the rut we’re in; why we have a MAF which whose capabilities do not reflect what we’ve spent on it, etc.
“minimal actual standing staff but when a need arises will have extra”
Public services are typically against seconding or their staff being pull out on regular basis as everyone has their job responsibilities that needs their full commitment. The civil services are not the same as private sectors where staff taking on extra jobs are the norm (some say that is just abusing of personnel).
If there will be extra responsibilities, there will be need for extra staffing or setting up new departments which requires extra staffing. Considering that purchases are not one off and such purchases not just for the ATM, but TLDM, TUDM, MMEA, PDRM, Civil Defence, and other agencies, an entire calendar year could be filled with tedious work of purchasing weapons & other equipment, examining estimates, looking at price lists & catalogues, negotiations & visitations, and then there is need for a technical department for evaluating equipment either at home or away. All these are important work that must have the full commitment of permanent staffs and not temps on an ad hoc basis which will lead to subpar or catastrophic results. If we are going to get this right, it has to be on a full time basis. But that would meant extra bloating.