Procurement policy of the Ministry of the Interior and the National Police Agency

In this Impact Assessment we look back at an audit of the procurement policy of the Ministry of the Interior and the National Police Agency that we carried out in 2007 at the request of the House of Representatives. The House had requested the audit in 2005 following the dissolution of the contract between Helifly NV and the National Police Agency (KLPD) regarding the procurement of eight helicopters.

In our report Procurement policy of the Ministry of the Interior and the National Police Agency of 2007 we made the following recommendations:

• make observance of the central rules on procurement mandatory;

• centralise information on local procurement orders and prevent proliferation of the use of experts;

• establish an exit strategy beforehand for high-risk contracts that are surrounded by many uncertainties and test performance against the exit strategy.

In this Impact Assessment, we look at the follow-up to our third recommendation. We will consider the first two recommendations in our Report on the Ministry of the Interior and Kingdom Relations' Annual Report 2008, which will be published on 20 May 2009.

At the end of 2007, the KLPD entered into new contracts to procure eight helicopters, six from Eurocopter and two from Augusta. In our Impact Assessment we consider the new contracts in the light of the third recommendation we made in 2007 and look at risk management for the new contracts during both the acquisition and the implementation phases.

The Impact Assessment shows that the Ministry of the Interior and Kingdom Relations (BZK) took more effective measures to mitigate risks in the second call for tenders for helicopters for the KLPD than in the first call. From the conclusion of the contracts until the delivery of the aircraft (the implementation phase), the Ministry has ensured that manufacture will be in accordance with contractual provisions and that the aircraft will be delivered on time.

The eight new helicopters will cost EUR 18.6 million more than the previous helicopters. This is because of:

• the increase in prices over the past six years (EUR 4.2 million);

• changes in the helicopters' functionality (about EUR 5 million);

• technical improvements and additional components in the aircraft (more than EUR 9.4 million).

The Ministry did not establish an exit strategy beforehand for the new contracts as we had recommended in our report in 2007. We found, however, that the new contracts contained provisions on the timely dissolution of the contracts in the event of non-compliance on the part of the suppliers and provisions on the continuity of police air support.

In the current implementation phase, risk management measures have been taken so that the client is continuously informed of the progress of the manufacturing process and can take measures in consultation with the helicopter manufacturers if necessary.

The KLPD's manager, however, should adopt a plan for major maintenance. Necessary procedures must be started in good time so that the aircraft can be overhauled when required. Account should be taken of the critical path since European public procurement rules are generally very time consuming. The manager should also take timely decisions on the location of the helicopters' bases. We would note that the timely provision of major maintenance and the selection of bases are essential conditions for the use of the aircraft.

We recommend that the Minister of BZK evaluate both the acquisition and the implementation phases and, on the basis of the experience gained in the first and second calls for tenders, document the risks inherent in such calls and the precautionary measures that must be taken to minimise risk. This information could then serve as a guideline and reference point for the drafting of contracts in future calls for tenders.