General Logistics Department

JUSTIFIED OPTIMISM

Acquisitions, development, and modernization of the Ministry of Defense and the Serbian Armed Forces are stipulated in The Guidelines for 2009 issued by the MoD. In addition, these Guidelines also mention other areas of the defense system, such as overhaul, research & development activities, planning, budgeting, property conversion, construction of military facilities as well as funds for civil defense and protection.

– In the field of research and development of armaments and defense equipment, the focus in 2009 will be on equipping the solders according to the M-21 model - this includes completion and finishing of the M-03 uniform prototype lot, which has partly been implemented by initial purchase of 500 sets. In the field of quartermaster supply equipment, development projects include boot-leg shoes and modular rucksacks. These items are expected to be introduced into the armaments and defense equipment of the Serbian Armed Forces in the first half of this year, once the testing and verification procedures have been finalized. Following the M-21 performance model for equipping an infantry soldier, an individual set for heating of canned food in field conditions is also currently under development. This project is now at its final stage, and it is expected to be finalized, verified, and introduced into the defense equipment by the end of May.  Modernizing and purchase of new parade uniforms for the Guards Unit (the prototypes of which have partly been completed) are also planned – says Colonel Assistant Professor/doc. Perica Pavloviæ, Chief of the General Logistics Department, MoD Material Resources Sector.

According to Colonel Pavloviæ, the funds allocated for 2009 will be sufficient for implementation of quartermaster support. In the military budget, 2% have been allocated for energy costs, about 1% for utility services, about 1% for the current purchase of uniforms, 2% will be used for food since implementation of a new Nutrition Plan started at the beginning of this year. Purchasing of new kitchen equipment is also included in the acquisition plan. Contracts are currently being negotiated with foodstuffs manufacturers and suppliers.

 The Acquisition Plan also includes machines and equipment for testing of materials. These types of tests used to be carried out by the Quartermaster Institute, which was closed some thirty years ago. That is why a part of the funds allocated for 2009 will be directed to the Military Technical Institute for the same purpose, so that other government institutions could also use the same facilities for their own requirements.

Colonel Perica Pavloviæ pointed out that, in 2009, the planned rationalizing of office materials will also save the defense system significant sums of money. The Military Printing House will be in charge of the required office supplies. He also announced that the Military Academy will be supplied with a lot of new furniture.

Defense Technologies Department

OWN DEFENCE INDUSTRY MEANS STABLE ACQUISITIONS

The Defense Technologies Department is an important inner organizational unit of the Material Resources Sector within the Ministry of Defense and the legal successor of the former Military-economic Sector, the Research and Development Directorate, the Standardization and Metrology Department, the Military Quality Control and the Logistics Sector, or the technical departments within the Services. After reorganization of the Serbian Armed Forces, all these activities have been pooled in an umbrella department, clearly signifying the responsibilities, importance, capacities, and scope of the work handled by this Department headed by the Brigadier-General Danko Jovanovic, D.Sc. The major functions of this Department include research, development, production and maintenance, meaning that the Defense Technologies Department follows up a product from its origin until it has been finally written-off.

From the strategic point of view, providing armed forces with high-quality equipment means that research, basic sciences, cannot be neglected, since it is a prerequisite for development of any defense item. In comparison with the last year’s budget, science and research have been allocated four times more funds this year, but this does not mean that everything is now settled. Science could respond to enhanced requirements for better quality of acquisitions for the SAF, although over the years we have lost pace with the development of new technologies, but its main promoter, its driving force should still be the defense industries.

– We should certainly pay special attention to defense industries – pointed out Brigadier-General Danko Jovanović, D.Sc. – A revival of our defense industries will enable us to become competitive, to retrace our own position in the defense markets, both locally and abroad. Today, this is the most painful, the most difficult issue. It is well known that development of defense technologies represents a backbone of industry in any country, that the money once invested in defense industries is returned in the form of upgraded and developed economic operators and, consequently, of the overall local economy. There is no doubt that scientific and intellectual potentials and technological development of modern countries are directly linked to the development of defense technologies. It is impossible to develop the economy and a country in absence of production of finished products, it is impossible to keep the labor force in the country, unless you can offer them work. During the last two decades, we have lost over 100,000 university graduates who found work in the West. This is how we lost our researchers, the mid-level scientists. Without them, there is no production and, consequently, no high-quality local acquisitions, independent from foreign suppliers. That is why investments in production facilities are a chance for better-quality and larger acquisitions from the local market. It is also a prerequisite for a fresh impetus to research activities. Speaking about development projects of the Military Technical Institute, their work is in a full swing. This year, we have introduced four new items into our armament, and eight items have been handed over to the Technical Testing Facility for final testing and approval. In addition to Lasta aircraft, which happened to be of far better quality than originally conceived, we have tested and did some research work on new rocket fuels, new explosives, and we are also planning to include triple-base powders in the future… Our research facilities are highly regarded, there is a lot they can do. In spite of the brain-drain, they have not lost pace with the rest of the world which, regretfully, is the case with our production facilities. That is why, year after year, we keep investing more funds into development. But no development project can be a goal in itself. Without production, there are no finished products, and no self-relying and stable acquisitions – says General Jovanovic.

After a long-lasting draught season in providing new acquisitions for the Armed Forces, after the money crunch, which left inexorable consequences on technological lagging behind, the Government’s commitment to bring back the Serbian Armed Forces among more modern and better equipped armed forces is quite evident.

– Equipping of the Serbian Armed Forces is a matter of how much money you can spare from the budget to invest into equipment – mentioned General Jovanovic. – This can be done by purchasing finished items locally or abroad and through one’s own development projects. Our experts are well known all over the world. It is up to the Government to set the long-term goals, to define the requirements, and provide the funds for high-quality and sophisticated equipment. Unless we are able to provide stable production in our factories, we shall not be able to count on long-term equipment acquisitions from our own, local sources. And this is our goal. We should breathe life into our production facilities – pointed out General Jovanovic.

Procurement Department

SHELF-LIFE EXCEEDING ONE YEAR

In military terminology, the Procurement Department is purchasing chattels on local and foreign markets. Therefore, the Department purchases items required for the defense system, based on the requirements set out in relevant Planning Documents and in accordance with the approved financial resources. It is also in charge of selling of any surplus equipment, designated as surplus and unnecessary by the Armed Forces, both locally and abroad.

– During the last year, the Procurement Department signed 1,097 contracts – 882 for local purchases, 47 for import from abroad, in the total amount of RSD 14.7 billion.

The Department concluded 31 contracts for export of surplus armaments and defense equipment and 137 contracts for sales to the local market. Contracts for sale of chattels amounted to RSD 1.1 billion out of which RSD 510 million were collected in 2008 while the rest of the money will be collected in the course of 2009.  The said funds were incorporated into the military budget for this year and allocated for the purchase of new equipment.

 During the last year, the Department concluded contracts for acquisition of new armaments and defense equipment amounting to RSD 7.5 billion - pointed out Colonel Srdjan Novakoviæ, D.Sc., Acting Chief of MoD Procurement Department.

 Last year, the Procurement Department concluded contracts for new purchases of armaments and equipment for the Special Brigade, Military Police Units, Telecommunications and Information Technology Directorate, to name just a few. The equipment contracted for last year will partly be supplied this year, too, since we are talking about specialized items of equipment, which are custom-made and not off-the-shelf items.

- The armaments contracted for in 2008 and planned for the Special Brigade (automatic rifles, long-range sniper rifles, light machine guns, pistols, sub-machine guns for special units, combat shotguns, monoculars, night vision passive and refractor goggles) will be supplied by renowned manufacturers, such as Heckler & Koh, Barrett, Sako, Benelli, and FN Herstal.

It is worth mentioning that, for the first time, the 5.56mm M-21 automatic rifles were also procured from the local Zastava Weapons Factory.

The Military Police were provided with modern equipment - laser range finders, protective helmets with visors, ballistic equipment, etc.

In 2008, we purchased 100 cross-country vehicles, 28 mini-vans, 3 fuel tankers, 22 mini-busses and vans, 65 passenger vehicles, 12 ambulances and 15 fork-lifts.

For the first time during one year, the Military received 1,246 computers, 74 servers, 41 laptops, 28 copying machines, 283 black-and-white printers, and 128 color printers, as requested by the IT and Telecommunications Directorate of the Serbian General Staff - listed Colonel Novakoviæ.

Last year, overall implementation of military budgetary obligations reached 96.8%. It should be mentioned that the Military fulfilled all financial obligations to its suppliers last year.

The Department also concluded contracts for purchase of medical equipment, primarily for the MMA, amounting to RSD 800 million: a digital mammograph, a hyperbaric chamber, magnetic resonance imaging unit, a medical distilling unit, etc., in addition to various medicines amounting to RSD 2.2 billion.

According to Colonel Srdjan Novakoviæ, D.Sc., the Procurement Department was allocated RSD 6.5 billion from this year’s military budget for new equipment. Sales of surplus armaments and defense equipment are planned to generate additional RSD 455 million, while RSD 700 million of self-generated income was transferred to the budget from the preceding period. Therefore, the Procurement Department has been allocated about RSD 7.6 billion in total.

Applied Research

According to Ilija Pilipovic, the Assistant Minister for Material Resources, the relevant authorities at the Ministry of Defense are working on amendments of and supplements to the Law on Defense and the Law on the Armed Forces of Serbia. The Material Resources Sector is also involved in this effort. The Ministry of Defense and, consequently, the Material Resources Sector are directly responsible for the Law on Procurement and Supply of Armaments and Defense Equipment, which already exists, but requires certain updating.

In collaboration with other Ministries of the Republic of Serbia, work is also ongoing on amendments of and supplements to the Law on Property of the Republic of Serbia and the Law on Export of Armaments and Defense Equipment. In addition, a number of bylaws, which have not been updated for quite a while, will be amended in 2009, in collaboration with the relevant organizational units of the Serbian General Staff. These include: the Rulebook on Acquisitions and the Rulebook on Special Purpose Chattels.

The following should also be mentioned: the Rulebook on Material Transactions at the Ministry of Defense, the Guidelines for Acquisition of Special Purpose Equipment (which is due to be completed shortly); the Rulebook on Procurements, the Rulebook on Construction Planning and Maintenance of Buildings, as well as the Rulebook on Health Care and Other Protection at the Serbian Armed Forces, and the Rulebook on Transportation of Personnel, which are all part of statutory regulations on which the activities of the Material Resources Sector of the Ministry of Defense are based.

 – When we talk about acquisitions and investments for the SAF, the main idea is to upgrade the Serbian Armed Forces with new purchases and overhauls, but also with the help of scientific research – which includes a series of measures undertaken to refurbish and develop the SAF’s material basis and resources.

The last two years have been dedicated to the state priority, i.e. relocation of the telecommunications bandwidth once used by the SAF. This is now taken over by the civilian sector, and the SAF will be using a higher bandwidth. That is why most of the investments in the previous period were directed to this field.

 During this year, we should complete erection of antenna masts, and new radio-relay equipment with switching centers. Starting from 2009, we shall have a more balanced investment, which will include upgrading of such infrastructure facilities - says Ilija Pilipovic.

Acquisitions in 2009 will be primarily directed to solders – members of the SAF will receive new ballistic protection equipment, optical and optoelectronics devices, uniforms with redesigned digital M-03 insignia, ABC protective equipment, and non-combat vehicles, since this has been an issue for the whole defense system.

Full attention throughout the year will be devoted to training. Purchases of new instructional aids for Infantry, Artillery and Engineering Units as well as for the Air Force Units have also been planned. These instructional aids also include G-4 and MiG-29 flight simulators. We also expect to receive a donation in parachutes, in compliance with technical requirements of our parachuters.

The Medical Corps have been receiving only symbolic funds for too many years now. This is going to change in 2009 - the Ministry of Defense has allocated about RSD 430 million for purchasing of new medical equipment. A half of this sum will be used to purchase the equipment, which will initially be used during the 2009 Universiade and, after that event, the equipment will be distributed to the relevant units and garrisons, subject to their specific needs.

 – Sustainable development is only possible if you invest financial resources in science and, after a number of years, you will be able to collect the scientific feedback in the form of finished products. For example, we are now looking forward to a promotional flight of Lasta aircraft, while the initial testing of sniper cartridge for the Black Arrow has already exceeded the original tactical and technical requirements. That is why there are plans to invest four times more financial resources in science in 2009 than in the previous year. This amount corresponds to the funds requested by the Military Technical Institute, MMA, and similar institutions for their own R&D projects. In the preceding period, due to the lack of financial resources, the focus was on basic testing only while, in the future, we intend to invest far more financial resources in applied research and development projects, the end result of which should be new finished products – Pilipovic affirmed.

Since the Overhaul Depots Čaèak and Moma Stanojlovic have now become a part of the defense system, overhaul of combat hardware of the Land Forces and of the Air Force and Air Defense will be carried out in a more rational and efficient manner. As emphasized by the Assistant Minister for Material Resources, current plans for 2009 stipulate overhaul of 79 pieces of artillery equipment, combat and non-combat vehicles, which should be completed by TRZ Čaèak Overhaul Depot. The Maintenance Schedule of SAF Air Force equipment is also going to be improved. In comparison with the previous years, when three aircraft re-entered operational service in 2006, ten aircraft in 2007 and 15 aircraft last year, the Ministry of Defense is now planning to have another 20 aircraft overhauled in 2009.

– The precondition for this is import of spare parts for the Gazelle and some Air Force equipment of Russian origin from abroad, since the funds have already been allocated for this purpose. The last Utva-75 aircraft is due to be overhauled this year, since Utvas are gradually to be replaced by new Lasta aircraft - says Ilija Pilipovic.

Shaping the Requirements

The Ministry of Defense will proceed with the disposal of surplus ammunition and explosives by de-bulleting method. Last year, about 4,500 tons of ammunition and explosives were destroyed and, in 2009, it is expected that this quantity will be increased, which should be achieved by upgrading the Kragujevac Overhaul Depot and introducing new equipment and training for its personnel. Due to its high quality of workmanship and since such a facility is indispensable for Serbia and the whole Region, the Kragujevac Overhaul Depot is slowly becoming a regional center for the follow-up of surplus ammunition and explosives, de-bulleting and overhaul of large-caliber ammunitions.  

 – The idea is to obtain about 13,000 square meters of warehouse space by the end of the year, primarily for storage of ammunition and explosives stocked outdoors for the time being; this would be made possible by de-bulleting of additional 4,500 tons of ammunition and explosives and already contracted for sales of such surplus materials, in addition to the completion of construction of new 7,600 square meters of warehouse space. In 2009, we plan to overcome the problem of stockpiling ammunition and explosives outdoors – explains Pilipoviæ.

In the field of construction, the officials at the Material Resources Sector are planning to complete construction of all the installations the construction of which has commenced, primarily the Cepotina Base. According to Ilija Pilipoviæ, construction of warehouses for ammunition and explosives and sheds for protection of defense equipment belonging to the Land Forces and Air Force, respectively, will continue.

Depending on the available financial resources, we will continue to construct new military housing facilities and to finish the already started ones. Through communication with local governments and other Government institutions on a daily basis, the Ministry of Defense is keen to revive the so called Master Plan. The objective of the Master Plan is to enable swapping of military real-estate for apartments for military personnel.   

What is the acquisition procedure like within the defense system?

– The current year is the year of the PPBI System (Planning, Programming, Budgeting and Implementation). This is a process, which identifies the end users’ needs, based on integrated requirements received from tactical agents. For example, the MMA submits its requirements to its tactical agent, i.e. the Health Care Department and, from there, the request is forwarded onward to the Procurement Department. Likewise, whenever uniforms are to be purchased - the requests are collected by the General Logistics Directorate and, once all requests from various beneficiaries are available, the actual purchasing is done by the Procurement Department.

 Requests for armaments and defense equipment from operational units of the Serbian Armed Forces are processed by J-5 (Planning and Development Directorate). The PPBI System includes Planning (long-term plans), Programming (medium-term plans), Budgeting (based on the Budget Memorandum and the required financial resources for a three-year period), and Implementation (in compliance with the Budget Law for each individual fiscal year, separately). This gives us an opportunity to assess in due time whether we shall be able to develop certain combat hardware ourselves or should we opt to buy it elsewhere. The preferred option will be to give a chance to our science and industry.  The novelty here is that the end user, who requires a certain type of equipment, should eventually get it while we, as a part of the management structure, are in charge of making the cost-benefit analysis, which should lead us to the most rational choice - explains the Assistant  Minister.

Speaking about more sophisticated systems, as we learn at the Material Resources Sector, a positive outcome of the issue of G-4 aircraft (currently in Montenegro) is to be expected in 2009, since the Military of Montenegro does not require such aircraft. Taking over the spare parts for Mi-8 helicopters is also being discussed with Montenegro.

There are plans for new purchases of wheeled combat vehicles for the Serbian Armed Forces. However, one should have in mind that acquisition of certain combat hardware and systems, especially more sophisticated ones, sometimes takes several years to complete, before these are introduced into operational use by the Military.

– Irrespective of the orders that might be placed with the Serbian Defense Industries, the Ministry of Defense will support their export projects, since the stronger the defense industries of one country, the stronger its defense power is - concluded Ilija Pilipoviæ, the Assistant Minister for Material Resources.

Planning and Development Directorate of the Serbian Armed Forces General Staff

PRIORITIES WITHIN THE AUTHORIZED BUDGET

According to the estimations made at the end of the last year, about RSD 11 billion was to be allocated from the 2009 military budget for equipping of the Serbian Armed Forces units. Due to a modest budget, the Armed Forces will have to share RSD 6.5 billion for acquisition of top-priority equipment, combat and non-combat hardware.

 Major-General Božidar Forca, D.Sc., the Chief of Planning and Development Directorate (J-5) says that equipping of the Armed Forces is a matter of a long-term vision. There are so many factors outside the defense system on which the Military has no influence, which preclude long-term planning with some degree of certainty.

 According to him, the mid-term acquisition plan is much more specific and detailed. If it were possible to keep the defense budget at 2.4% of GDP and to earmark 20% out of that sum for capital investments, or acquisitions, the officials at J-5 confirm that, within a 6-year period, the Military could acquire all the necessary armaments and equipment, except for the multi-purpose aircraft.

 – Armed Forces are evaluated according to their operational and functional capabilities, or according to four components - human resources, equipment, other resources, and quality of training. The two out of the four components, i.e. resources and equipment gain in quality if they are followed by required development, acquisition, upgrading, maintenance and overhaul – pointed out General Forca.

Acquisitions, or new equipment purchases take up most of the money, and according to our collocutor, it is the task of J-5 to reconcile the needs of three operational commands of the Serbian Armed Forces with actual funds available for the purpose.

 – It should be emphasized that the funds allocated during the last two years were not low in comparison with those allocated in the preceding ten years. When planning our acquisitions, we have always had in mind the top-priorities according to the types of defense equipment and respective units – explains Forca.

According to him, telecommunications equipment, or modern signal communications equipment were the top-priority, and acquisition of a combat wheeled vehicle was also a significant item of acquisition by the Serbian Armed Forces to be implemented not only in 2009 but also in the years to come.

– Speaking of units, the Special Brigade, Military Police and units, which are deployed at the Land Security Zone, will be given top priority.  The focus will be on the servicemen, i.e. ballistic equipment - protective helmets, jackets, new uniforms, new shoes - says the Chief of J-5.

 As explained by General Forca, in 2009, this Directorate intends to complete development of all 26 items of equipment, which are included under the M-21 performance concept. Training facilities will also receive some funds in 2009.

 Telecommunications equipment required for the exit strategy of the Military from the electromagnetic spectrum handed over to mobile telephony is also a major acquisition item. However, since the Military had not received the planned funds obtained from the license granted to the third mobile operator, it is highly unlikely that they will be able to meet this requirement in full during this year - we learnt at the Planning and Development Directorate.

Capital acquisitions, such as acquisition of a multi-purpose combat aircraft, will depend on the perceived needs of the Armed Forces and the Government policy. General Forca says that this is the issue for discussion for the years to come, when the Government will have to decide on the type of arrangement with a potential partner, since this is a very costly project. Various types of offset arrangements in exchange for purchases of armaments and defense equipment made significant impetus for local economies in other countries.  Some countries managed to start up their own defense industry, others to develop completely new branches of industry.

 According to Major-General Božidar Forca, switching to PPBI System (Planning, Programming, Budgeting and Implementation) was "a bare necessity”, since most of acquisitions, particularly those coming from abroad, cannot be completed within one calendar year for which the budget funds are allocated.

- Adoption of two important documents - the Rulebook on Acquisitions and the Rulebook on Tactical and Technical Planning Incumbents should bring more discipline to the issue of acquisitions and supplies. That is why we should call this year "The Year of Rulebooks", because adoption of strategic documents and other bylaws will mark the direction of our future efforts - General Forca pointed out.