Chad Helicoptor Procurement

SamuelFox

Hi folks,
To stimulate discussion on the Chad helicoptors affair I thought I'd cut and paste the relevant sections from the Comptroller and Auditor Generals report. Its availible in full at http://www.audgen.gov.ie/documents/annualreports/2008/Annual_Report_2008Rev_En.pdf

Mission to Chad
Background
28.1 In order to help create security conditions conducive to a voluntary, secure and sustainable return of refugees and displaced persons to their homelands, the United Nations (UN) established87 a multi-dimensional presence in Chad and the Central African Republic.
28.2 The UN initiative consisted of
· A UN mission comprised of UN police, rule of law, human rights and other civilian officers
· A special Chadian police/gendarmes unit (some 850 personnel) dedicated exclusively to maintaining law and order in refugee camps, sites with concentrations of internally displaced persons and key towns, and assisting in securing humanitarian activities in eastern Chad
· An EU military deployment (EUFOR TCHAD/RCA) to protect and support the overall mission.

Irish Defence Forces Contribution
28.3 On 28 November 2007, Dáil Éireann approved the deployment of a contingent of the Defence Forces for 12 months as part of the EU military deployment.
28.4 The deployment entailed the Defence Forces putting in place all the logistical and equipment needs for the mission, transporting all personnel and equipment to Goz Beida in southeast Chad and constructing an operational headquarters there. In all, 269 containers, 105 vehicles and engineering plant were transported by air, land, rail and sea to Goz Beida, via Cameroon.
28.5 A contingent of 411 personnel was deployed, 371 of whom are stationed in Goz Beida, with an area of operations of approximately 76,000 square kilometres. Irish involvement began in January 2008, and was fully operational in May 2008.
28.6 The main sphere of operations – Chad – comprises an area the size of France, Spain and most of Germany combined. It is landlocked and nearly 2,000 kilometres from the nearest port facility with poor roads and infrastructure over which to transport personnel or equipment. Climatic conditions in the region are severe.

Audit Focus
The audit reviewed
the cost of the Defence Forces involvement in the EUFOR Chad mission
the arrangements put in place for air support and its procurement.

Mission Costs

28.7 Under the terms of EU missions, each country paid all its own costs in relation to troops and equipment deployed on the mission (including the cost of air support during the deployment) and contributed to the common costs of the mission – the costs of providing the operational and force headquarters and certain other approved infrastructure and facilities.
28.8 The additional costs to the Vote for Defence in respect of Defence Forces involvement in the EUFOR mission in Chad up to the end of April 2009 was €59 million. These costs exclude the normal pay and allowances of the personnel involved. The additional costs are set out in Figure 95.



Note:
a Reimbursement of approximately €1.2 million and €1 million is due from the Netherlands Ministry of Defence and the UN, respectively, for supplies and services provided to them by the Irish contingent in Chad.
Procurement of Air Support to EUFOR Mission

Figure 95 Additional Cost of involvement in EUFOR mission to end April 2009 Description

Description

2007
€’000

2008
€’000

2009 (to April)
€’000

Total
€’000

Allowances

84

11,723

4,228

16,035

Air Corps Equipment Expenses

—

316

—

316

Military Transport

1,751

6,204

233

8,188

Barrack Expenses and Engineering Equipment

1,501

4,106

67

5,674

Buildings

183

899

63

1,145

Ordnance, Clothing, Catering

5,205

4,598

248

10,051

Communications and Information Technology

1,371

504

96

1,971

Travel, Freight

35

13,491

1,066

14,592

Medical Expenses

109

991

125

1,225

Miscellaneous

—

64

—

64

Contribution to Common Costs

676

925

254

1,855

€10,915

€43,821

€6,380

€61,116

Costs Recoverablea

€2,200

Net Additional Cost

€58,916

28.9 Helicopter support was a requirement of the mission, due in part to the difficult terrain in Chad and the remoteness of the location as well as the requirement for casualty evacuation and the fact that helicopter support provides other significant military capabilities.
28.10 Supplies and services for peacekeeping missions, including helicopter support, are procured on the basis of competitive tendering either by the Contracts Branch of the Department of Defence or directly by the military authorities. The instruments which delegate budgetary control and responsibility for expenditure from the Secretary General to the Chief of Staff, provide that such procedures are carried out in accordance with current national and EU procurement directives, regulations, procedures and guidelines for public bodies.

28.11 Expenditure on the mission was monitored by the Department’s High Level Planning and Procurement Group (HLPPG). This is a joint civil/military committee with a planning and oversight role. All contracts with a value in excess of €1 million must have its prior approval and contracts valued between €500,000 to €1 million must have the prior approval of a Working Group that supports it.
28.12 In March 2008, an offer of two helicopters from an aviation broker (Air Partner) was not availed of, as there was an expectation that helicopter support for the mission would be provided by EUFOR. In the event, this support did not materialise and the process of acquiring civilian helicopters was restarted by the Defence Forces on 10 May 2008. A contract with Air Partner for the lease of two helicopters for the period June 2008 to March 2009 was placed by the Defence Forces on 30 May 2008. The value of the contract was approximately €3 million. The procurement was processed in Logistics Administration Section of the Defence Forces which also signed the contract.

Suitability of Aircraft Provided
28.13 Air Partner is the provider of charter flights to the Defence Forces under a Framework Agreement established in 2007.
28.14 The Director of Operations of the Netherlands Defence Forces informed the Deputy Chief of Staff (Operations) on 24 August 2008 that the Air Operator Certificate for the helicopters was limited to the transport of cargo only.
28.15 The Secretary General of the Department consulted the General Officer Commanding Air Corps in relation to this matter. The Air Corps advice was that the helicopters provided under the charter were clearly limited to cargo operations and were not authorised to carry passengers. The contingent commander in Chad was ordered by the Chief of Staff to restrict the use of the helicopters to cargo and re-supply, emergency casualty evacuation and operational emergencies.
28.16 As a result of these issues, the Secretary General asked the Internal Audit Unit (IAU) of his Department to carry out a full audit on the placing of the helicopter contract. I have drawn on the report of the IAU in compiling my report.

EUFOR Mission Timeline
28.17 The timeline for the mission and the procurement events are set out in Figure 96.

Figure 96 Timeline of EUFOR Mission Date
Event
21 February 2008
Mission commences in Chad
March 2008
Request to Air Partner to source helicopters for the mission
March 2008
Contracts Branch of the Department state that the existing framework agreement with Air Partner did not make provision for helicopter lease
10-20 May 2008
Sourcing of helicopters recommenced. Approval of Chief of Staff required for contracta
21/22 May 2008
Logistics Administration of Defence Forces HQ was asked to provide a written caseb on the need for helicopter support and again the Contracts Branch advised that the framework agreement did not comprehend the lease of helicopters for an extended period
25 May 2008
Air Partner advised that it had sourced two helicopters and supplied details on costs and other contract matters
26 May 2008
Operational Commander EUFOR informed the Department that he was hopeful of getting EUFOR helicopters to Goz Beida
27 May 2008
Deputy Chief of Staff (Support) directed that the contracting process continue and that a brief on the main points of contract be prepared for the Chief of Staff
28 May 2008
Assistant Secretary advised Deputy Chief of Staff (Operations) that a specific case was required for the lease of helicopters
30 May 2008
Contract signed by Defence Forces with Air Partner for lease of two helicopters until March 2009
6 June 2008
Assistant Secretary informed by Deputy Chief of Staff (Operations) that Operations section was preparing a case for helicopters
Contracts Manager informed Assistant Secretary that she had been advised at HLPPG Working Group meeting that a contract had already been signed on 30 May
11 June 2008
On learning that the contract for helicopters had been placed without the appropriate authority, the Secretary General revoked the delegated authority for expenditure of this nature
August 2008
Netherlands Ministry of Defence raised questions regarding certification of helicopters to transport personnel
September 2008
Transport of personnel was restricted after Air Corps advice
October 2008
One Helicopter damaged in Chad
14 March 2009
EUFOR mission completed – hand over to UN mission
Notes:
a The Chief of Staff stated that… no contract would be signed without his having sight of the major details of the contract including costs. His guidance also provided that full liaison with the Department’s Contracts Branch would take place.
b The Contracts Manager in an email to Director of Administration stated that the Secretary General required a written case on the requirement for helicopter support and that the existing framework agreement with Air Partner did not comprehend the lease of helicopters for an extended period.
Audit Findings
Overall, the audit concluded that there was a failure to follow established control procedures in the following respects
The contract was placed on the basis of an existing framework agreement dated 17 September 2007 with Air Partner. However, the Contracts Manager informed the Director of Administration on 21 May 2008 that the existing agreement did not comprehend the lease of helicopters for an extended period and that a new tender competition was necessary.
National and EU procurement guidelines were not adhered to, as there was a failure to seek competitive tenders for the helicopter support service.
The prior approval of the relevant joint civil/military committee was not obtained for placing the contract.
While it was a fundamental requirement that the aircraft would be authorised to carry passengers, the expertise of the Air Corps was not sought with regard to the certification of the helicopters for this purpose.
Air Corps expertise was also not utilised in examining the technical specifications of the aircraft being procured.
The Defence Forces’ Logistics Administration Section relied upon the advice of Air Partner in the process of evaluating the certification documentation, which effectively meant that the tenderer was involved in evaluating its own proposal.
A contract to a value of €3 million was entered into which breached the internal authorisation limits applicable to the procurement.

Views of the Accounting Officer
28.18 The Accounting Officer stated that he accepted the findings and conclusions of the audit. The findings were broadly in line with those of the investigation carried out by the IAU of the Department at his request which had been finalised in February 2009. However, he stressed that it was important to take into account the overall context in which the contracting for the helicopters occurred.
28.19 The deployment and sustainment of the Defence Forces contingent to Chad was the most challenging logistics project ever undertaken by the Defence Forces and, overall, had been an outstanding success in operational terms. Overall, the very difficult task of deploying and sustaining the Irish Battalion had been accomplished in a very professional manner.
28.20 He added that, given the remoteness of the Irish Battalion’s base in Goz Beida, the complete absence of a road infrastructure, the isolation anticipated during the rainy season and the considerable distance from the nearest hospital, the necessity for comprehensive helicopter support was recognised at the outset. During the build up phase of the mission, the Operational HQ in Paris had, in good faith, provided reassurance that helicopter support would be available. There was never any question or reservation about the absolute requirement to have helicopter support for the Irish contingent. However, as the rainy season approached, it became apparent that the promised helicopters were in doubt and that the Department might have to make its own arrangements. It was in this context, and because of the significant cost involved, that he asked that the case to lease helicopters should be properly formulated by the Defence Forces.


28.21 He informed me that when he was advised that a contract had been placed by the Defence Forces for helicopters he responded swiftly and comprehensively. The delegated authority which authorised military personnel to arrange the charter of aircraft for troop transport / freight for overseas operations was revoked. He subsequently asked the Department’s IAU to conduct a comprehensive audit into the placing of the contract. The recommendations in the Internal Audit report had been acted upon. The procedures for delegating authority to military personnel generally had been reviewed and strengthened. The terms of reference of the HLPPG had been revised. The military authorities had committed to providing additional and regular training to military personnel on procurement procedures.
28.22 In operational terms, the contracted helicopters had performed well and provided vital support to the Defence Forces. The requirement for helicopters was a very real one. Even when their use was temporarily restricted while the certification issue was being resolved, the helicopters continued to fill an important role by providing logistic support. They remained available as emergency cover for casualty evacuation and continued to provide an essential capability throughout the period.

Conclusions
There was a requirement for helicopter support for the Irish contingent in Chad. When it became clear that this was not going to be provided by other elements of the mission, it became necessary for Ireland to procure the necessary facilities.
While the Department and the Defence Forces had appropriate and documented procedures in place for procurement generally, the conduct of the particular contract for air support for the EUFOR mission did not follow established procedure.
The procurement arrangements were breached in the following respects
non-observance by the Defence Forces of agreed procedures between the Department and the Defence Forces for equipment and capital expenditure items, including joint civil/military approval procedures
failure of the Defence Forces to maintain contact with the Contracts Branch of the Department
the advice of the Contracts Branch on the use of the framework agreement was not adhered to
the requirement that a written case for prior approval be submitted to the Secretary General was not acted upon
there was a failure within the Defence Forces to seek the advice of Air Corps expertise on the evaluation of the proposed contract and to have it assess the certification documentation presented by the successful contractor.

The cost incurred in the provision of helicopter support for the EUFOR mission for 2008 amounted to €1.8 million.
Subsequent Developments
28.23 On 10 October 2008, the UN formally requested Ireland to consider putting the Irish troops deployed with EUFOR under the command of the UN after 15 March 2009. The UN indicated that the commitment of troops deployed under EUFOR to the UN follow-on force MINURCAT

was critical to avoid a security vacuum and ensure that civilians and UN personnel at risk were protected.
28.24 Dáil Éireann approved the transfer of Irish personnel on the EUFOR mission to the new UN mission on 5 March 2009 and the rotation of further contingents of the Defence Forces for service with MINURCAT for a period of 12 months from 15 March 2009.



28.25 The transfer of the mission to MINURCAT had the following financial implications

• The UN reimburses a portion of the cost of Defence Forces’ personnel deployed.
• The UN reimburses, at agreed rates
  • the cost of equipment deployed
  • transport costs on rotation of contingents and on eventual withdrawal and
  • the cost of repatriation of the Defence Forces’ personnel and equipment to Ireland.
• The UN provides food, water, fuels and oils and air transport directly to contingents.

28.26 Reimbursement for troop costs is usually quarterly, three months in arrears, while reimbursement for equipment costs is also quarterly but paid six months in arrears.
28.27 It is estimated that UN reimbursement of troop costs for the MINURCAT mission will be approximately €4.24 million per annum. The estimated amount of UN reimbursement of equipment and other costs cannot be determined at this stage.
28.28 In relation to UN missions in general, Ireland pays a contribution in the region of US$3.1 million (from the Vote for Foreign Affairs) whether Ireland is participating in a mission or not. Overall, the UN envisages a cost in the region of US$600-700 million for MINURCAT for 12 months.

Air Support for MINURCAT Mission
28.29 Under the UN MINURCAT mission, the UN provides transport (including helicopters) under the control of the UN civil administration. As some difficulties have been encountered under this arrangement and given the nature of the area of operations, Ireland has decided to extend the contract with Air Partner for helicopter transport (valid until the end of September 2009). The UN has indicated that under its regulations it cannot reimburse the cost of the helicopters, as they are not wholly owned Defence Forces assets. However, they will cover the associated running costs, such as fuel.

SamuelFox

Just to note - I tried several times to get the table of costs to display properly, unfortunately no luck. Its available in the original document, and if you want to follow it here the top figure in each section is the 2007 figure, followed by 2008, 2009 and total.

If someone more able than me wants to amend it (or tell me how to) please feel free!

concussion

There isn't much to say reallly. The only thing 'wrong' was that the seats were side on (like most mil helis) as opposed to facing forward.