Committee to probe IDF-Elbit artillery contract

Athos howitzer Photo: Elbit Systems

The need for the cannons and the quantity to be ordered will be reexamined and weighed against Israel's future defense needs.

A special joint Ministry of Defense-IDF committee will assess the procurement plan for new self-propelled artillery, Minister of Defense Avigdor Liberman and IDF Chief of Staff Gadi Eizenkot have agreed. Deputy Chief of Staff Major General Aviv Kochavi will head the committee. The probe will probably take several months, and will involve professional personnel in the IDF, the Ministry of Defense Administration for the Development of Weapons and Technological Infrastructure, and other agencies.

Sources inform "Globes" that the decision to appoint the committee was taken in recent days, following consultations on the subject between Liberman and Eizenkot. They further agreed that until the committee reaches its final conclusions and formulates its recommendations, the Ministry of Defense will not conclude an agreement with Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) for a multi-year project for the development and production of hundreds of the future cannon for IDF artillery forces.

The plan, revealed by "Globes," involved a $1.5 billion procurement deal for the purchase of hundreds of self-propelled artillery pieces to replace outmoded M-109 cannon that have been used for four decades. The cannon offered by Elbit Systems is the ATMOS, parts of which are in the development and testing processes.

The decision about the selection of Elbit Systems' cannon was recently taken by a developers' committee in the Administration for the Development of Weapons and Technological Infrastructure, and was ratified by Ministry of Defense director general General (reserves) Udi Adam. A "Globes" investigation early this week showed that the process by which Elbit Systems' bid was selected took place secretly, without a tender or any competitive process taking place, even though two consortia of Israeli and foreign companies offered German and South Korean-made artillery.

Defense sources expressed amazement at the Ministry of Defense's decision to make a huge agreement with Elbit Systems as a sole supplier without any tender for examining the bid by German company KMW, which combined with Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) in an attempt to sell its AGM cannon to the IDF.

At the same time, South Korean company Hanwha Techwin joined forces with Israel Military Industries Ltd. (IMI) to offer its K-9 semiautomatic cannon. The Knesset Foreign Affairs and Defense Committee also discussed this matter this week. Part of the discussion focused on the Ministry of Defense's agreement with Elbit Systems as a sole supplier without a tender. The Ministry of Defense is refusing to publicly explain its considerations in the matter, saying that the matter is secret, and that all the alternative bids had in any case been closely examined.

"The entire process that led to the selection of Elbit Systems was accompanied by legal advice, and it cannot be said that this was a decision taken in secret," a Ministry of Defense source said.

Liberman and Eizenkot's decision to establish a committee headed by Kochavi is designed to assess the validity of the decision taken by the Administration for the Development of Weapons and Technological Infrastructure and ratified by Adam. "$1.5 billion is a lot of money, and before the Ministry of Defense contracts with Elbit Systems in this matter, the need for these cannons and the quantity to be ordered must be reexamined and weighed against Israel's future defense needs, and with a long-term view of the modern future battlefield," a defense source familiar with the particulars told "Globes."

The source added that the assessment process to be conducted in the framework of the deliberations of the committee headed by Kochavi would also include the function of the artillery system on the future battlefield, given the expected technological developments in the coming years and the availability of precision armaments at various ranges, such as precision guided rockets, some of which have ranges in the hundreds of kilometers. These armaments have been adapted by defense companies for asymmetric warfare also taking place in urban regions.

The IDF spokesman declined to respond to the report.

Published by Globes [online], Israel Business News - www.globes-online.com - on May 18, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Athos howitzer Photo: Elbit Systems
Athos howitzer Photo: Elbit Systems
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