Artillery Procurement from Elbit Systems-Danish Investigation finds Irregularities

A Danish legal inquiry into the Ministry of Defence's (MOD) procurement of fire support systems from Elbit Systems has revealed procedural errors and a lack of oversight, raising concerns about transparency and fairness in the acquisition process.

The Danish law firm Bruun & Hjejle has completed an investigation into the Danish MOD’s procurement of fire support systems, including the ATMOS and PULS systems from Elbit Systems.

The investigation, launched in response to concerns raised in January 2023, concludes that procedural errors and inadequate oversight occurred at multiple levels within the Ministry of Defence's Material and Procurement Agency (FMI) and the Ministry of Defence’s department.

The inquiry found that documents supporting the procurement contained erroneous information regarding the validity period of Elbit’s offer, resulting in mild criticism of both FMI and the Ministry of Defence’s department. Additionally, the investigation criticized FMI for its handling of the market assessment, suggesting it may not have provided a balanced evaluation of other suppliers, potentially prioritizing Elbit Systems. This prioritization may have affected the overall competitiveness of the procurement process.

The report also noted that FMI failed to disclose the existence and details of a settlement agreement with Elbit Systems to the Ministry of Defence’s department. According to the investigation, this omission was a significant oversight given the relevance of the settlement in evaluating the procurement process.

Defense Minister Troels Lund Poulsen responded to the findings, emphasizing the seriousness of the criticisms directed at the Ministry of Defence and FMI. Poulsen highlighted that several changes have already been made in senior management at both agencies and announced further organizational improvements within FMI.

While the investigation was limited to reviewing existing documents without interviewing involved personnel, it recommended further interviews to assess any potential connection between the settlement agreement and FMI’s contracts with Elbit Systems. Defense Minister Poulsen confirmed that these interviews would proceed to clarify any links and determine if the case warrants any employment consequences.

The findings underscore concerns over transparency and adherence to procurement standards in military acquisitions, prompting ongoing scrutiny to ensure procedural integrity in future defense procurement processes.