Putin Warns Against Defense Contract Gouging
16:30 20/02/2012 KOMSOMOLSK-ON-AMUR, February 20 (RIA Novosti) - Any attempts to overprice arms and military equipment delivered under government defense contracts will be relentlessly suppressed, Russian Prime Minister Vladimir Putin said on Monday.
“Any attempts to unleash so-called price wars…must be nipped in the bud both by administrative and economic mechanisms, including penalties and financial sanctions,” he said.
He warned that prices for arms and military equipment under defense contracts must not be plucked out of thin air, but allowed that arms manufacturers should have profit margins of 13-20% to be able to develop and pay competitive wages to employees.
He said Russia has no plans for massive arms procurements abroad except for the purchase of individual items as a means of gaining access to advanced technology.
Missile designer Yury Solomonov said on Thursday the current standoff between arms makers and the Defense Ministry over the pricing and quality of weaponry for the Russian military may continue to disrupt state defense orders in 2012.
A number of military and defense industry officials have recently been fired or reprimanded for their poor performance in the implementation of the arms procurement program.
Solomonov also said Russia was 10-15 years ahead of its rivals in the development of strategic nuclear weapons, but lagged behind the West at least 30 years in the development of other armaments.
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