Putin Sets April 15 Deadline for Defense Order

Russian Prime Minister and president-elect Vladimir Putin on Wednesday ordered that 2012 state arms procurement contracts be placed before April 15. The 2012 state defense order is worth an estimated 880 billion rubles (about $30 billion). Factoring in state guarantees to defense firms, it will reach approximately 1 trillion rubles. Last year’s defense order was 750 billion rubles. A total of 23 trillion rubles is to be spent on arms procurements in 2011 through 2020. President Dmitry Medvedev said in late March that Russia will spend at least 2.8 percent of GDP a year on defense programs over the next eight years. In 2011, wrangling over prices between the Defense Ministry and defense firms jeopardized the state defense order. Putin warned in February that any attempts to overprice arms and military equipment delivered under government defense contracts will be relentlessly suppressed. He warned that prices for arms and military equipment under defense contracts must not be plucked out of thin air, but allowed that arms manufacturers should have profit margins of 13-20% to be able to develop and pay competitive wages to employees. He said Russia has no plans for massive arms procurements abroad except for the purchase of individual items as a means of gaining access to advanced technology. Missile designer Yury Solomonov has said the current standoff between arms makers and the Defense Ministry over the pricing and quality of weaponry for the Russian military may continue to disrupt state defense orders in 2012.