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Title Evaluation of Procurement Program for National Defence Force Support System

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Evaluation of Procurement Program for  National Defence Force Support System
22 November 2016
Administrative Program Evaluation Division of the Program Evaluation Bureau

   The National Assembly Budget Office (NABO) conducted an evaluation of the procurement program for force support systems (previously known as “non-weapon systems”), which is one of the two pillars of national defense procurement along with weapon systems procurement, and proposed measures for improvement.
The following is a list of the evaluation results and proposed improvements.
   First, in the process of drafting the procurement plans which have major implications on the procurement of military supplies and munitions, the appropriateness of the procurement institutions and their supplies needs to be reviewed in connection with the draft budget. In order to increase fairness and efficiency, it is necessary for the procurement plan to increase procurement from the Defense Acquisition Program Administration (DAPA) or Public Procurement Service (PPS) rather than direct procurement by the unit which is the subject of demand (each service branch or the Korean Armed Forces Financial Management.). In particular, the procurement of items that are not directly related to weapon systems such as subsistence and/or oil supplies and goods should be reviewed to change the procurement source from DAPA to PPS. .

   Second, efforts to reduce the proportion of private contracts for military supplies such as subsistence and/or oil supplies need to be strengthened. While the unique nature of national defense tends to lead to higher proportions for private contracts (71.4% of total costs), proportions need to be reduced in the areas of subsistence and/or oil supplies (38.2%) and goods (56.5%). With regard to private contracts for supporting persons of national merit such as through the veteran rehabilitation village, consideration needs to be given to the production facility, capacity of the organizations and maintain a balance between them, while reviewing other compensation means to be provided at the government level.

   Third, efforts need to be made to ensure punctual delivery and improved quality of military goods. The risk of procurement failure due to contract cancellation or termination and the risk of undermining weapons systems operations due to prolonged delivery delays of combat support equipment (such as parts) need to be actively controlled. Further, preventive measures against complaints by military users need to be reinforced by offering quality assurance, and the objectivity and fairness of ex-post responses to defects needs to be improved.
   An upgrade of outdated Korean defense specifications must be undertaken while strengthening the research function of the force support system, under which overall improvements are studied and planned, by developing a mid-to-long term plan for the force support system, improving the timeliness of procurement and optimizing the procurement of items.

   Fourth, in order to enhance fairness (and transparency), a review must be conducted to change the contractor for general facility construction from military units, especially The Armed Forces Financial Management Corps directly under the Ministry of National Defense (MND), which is the subject in demand, to the PPS. In order to increase fairness, the enforcement decree for the Government Procurement Act needs to be revised in accordance with the purpose of the Act and in line with the 2005 Agreement between the DAPA and PPS on the Contracting of Constructions on Military Facilities, so that except for special cases in which national defence secrets must be protected, contracts may signed with the PPS, just as in the case of other national institutions.
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