In 2019 the defence spending earmarked for strengthening national defence capabilities remained at the level of 2% of the gross domestic product (GDP). The indicative budget of the Defence Ministry for 2019 increased by 1.7% compared to a year before. Annual budget was broken down into three main positions: 35% for investments, 30% for maintenance and 35% for personnel.
Almost 59% of the defence spending allocated for procurements necessary for boosting the combat capabilities of the National Armed Forces in 2019 are used to acquire new items. The most financially intensive procurements include acquisition of communication and information technologies, arms, vehicles and ammunition.
19% of the defence procurement funding is invested in communication and information technologies, 18% is going into weapons purchase, 18% is spent on vehicles and specialised equipment, whereas 11% of the financing is spent on ammunition.
Procurement funding allocation for 2019 is comprised of financing required to fulfil the existing liabilities under long-term procurement contracts and the expected costs of purchase contracts concluded in 2019. 41% of the earmarked funding will be spent on fulfilling the current contractual obligations.
The biggest 2019 procurement contracts envisage the acquisition of night vision and other optics instruments, cargo transportation vehicles, stocking up of ammunition, modernisation of Imanta type vessels, command and control equipment with auxiliary communication systems.
In 2019, just as in 2018, the main focus is on procurement of individual and collective equipment. Such equipment is a priority and it is needed to ensure that professionals serving in the National Armed Forces and National Guard are properly equipped. In the process of procuring items, preference will be given to local manufacturers. This would enhance supply security, implementation of mobilisation activities and war-time supply of the National Armed Forces.
2019 planned procurements include sniper rifles, target systems, warehousing equipment, instruments and planned vessel maintenance services, self-propelling howitzer system support services, as well as personnel transportation and catering services.
Joint defence procurements between the Baltic countries are aimed at deepening mutual cooperation. For example, project pipeline includes Latvia-Lithuania joint respirator procurement and Latvia-Estonia joint practice grenade procurement. As envisaged, such procurements will promote joint procurement culture between all three Baltic states.
The most significant military capability development projects of 2018 were the procurement of Spike anti-tank missile systems in scope of Land Force Mechanised Infantry Brigade project, acquisition of Carl Gustav and other types of ammunition, delivery of 6x6 all terrain vehicles (ATVs), purchase of JET A1 aviation fuel refueler, aircraft de-icing vehicles and machines, fire fighting vehicles, platoon tents with climate control, etc.
Unmanned aerial vehicle (UAV) supply agreement between the Ministry of Defence and Latvian manufacturers UAV FACTORY and Atlas Aerospace will provide the National Armed Forces with UAVs, making it the biggest high-tech procurement project involving domestic producers in the recent years. Delivery of unmanned aerial vehicle systems will enhance aerial surveillance and reconnaissance capabilities of the National Armed Forces, as well as reinforce indirect fire support control capabilities. UAV systems delivered to the Latvian army will also be used in search, rescue and other similar civilian operations.
80% of all defence procurement projects are implemented by the State Centre for Defence Military Sites and Procurement (SCDMSP). The Centre is the managing authority for procurements initiated by the Ministry of Defence and National Armed Forces. It is also responsible for acquisition of infrastructure and technological solutions and other items. The total number of procurement projects implemented by SCDMSP reached 191 in 2018. Some defence sector procurements are implemented through the frameworks of Electronic Procurement System run by the State Regional Development Agency, NATO Support and Procurement Agency and the US Foreign Military Sales programme.
To ensure financial sustainability and timely implementation of procurements, Ministry of Defence will continue posting regular market surveys on its webpage identifying potential needs for infrastructure/technological solutions and services. Surveys will help you keep up to date with the most recent procurement plans.
List of procurements regulated and implemented in scope of the Public Procurement Law is available at www.eis.gov.lv (Electronic Procurement System portal). List of procurements to be implemented in the framework of the Defence and Security Procurement Law is available at the https://www.mod.gov.lv/lv/iepirkumi on the webpage of the Ministry of Defence.
Defence procurements initiated by defence sector are managed by the following two authorities:
1) State Centre for Defence Military Sites and Procurement (SCDMSP). The Centre carries out procurement of products, services and construction works on behalf of the Ministry of Defence and its government agencies, including the National Armed Forces.
2) Support Command of the National Armed Forces. Support Command is responsible for procurement of medical devices, medicines, health care and other products and services on behalf of the regular forces and the National Guard.
Defence procurements are not limited to products, services and construction works purchased in scope of the Public Procurement Law. Defence procurements also encompass products, services and construction works specifically designed or adapted for military purposes as weapons, ammunition or military resources, including products, services and construction works intended for national security and protection of information. Such products, services and construction works are defined in Defence and Security Procurement Law.
The aim of the defence procurements is to ensure the national security of Latvia, strengthen the efficiency of National Armed Forces capability to respond to all kinds of threats, enhance mobility and fire power at the unit level, and contribute to collective defence efforts of NATO and the EU.