Quo Vadis Altay?
The Altay Main Battle production signifies how the Turkish defence industry has developed.
The tank includes many state of the art technologies. The tender, however, indicates problems.
It is widely known that OTOKAR is the designer of the tank. Undersecretariat for Defence Industries (SSM) paid 550 million US Dollars to get the design and four prototypes. FNSS is eager to produce the tank. Partnered with BAE Systems, FNSS has the capacity to produce such a tank and it has already designed a medium size tank for another country. BMC has no capacity but recruited former OTOKAR engineers and is in partnership with German Rheinmetall to produce the tank. To analyse current developments, one needs to know the short history of how the serial production program was evaluated.
As designer of the tank, OTOKAR was the sole company to make a serial production offer to SSM. According to sources close to the project, 70 % of the offered price derived from compulsory subcontractors. SSM had determined them and did not let OTOKAR negotiate price for equivalent or alternative producers. Unsatisfied with the price tag, SSM stopped negotiating with OTOKAR and invited other interested companies to participate in the tender. This is how OTOKAR, FNSS and BMC appeared on the list.
As a change from former process, this time companies have more freedom to choose most of subcontractors. This time subcontractors are classified as compulsory and others. Companies had the freedom to negotiate with any other company approved by SSM. Compulsories however had to be same for anyone.
Under these conditions all three companies submitted their best and final offer (BAFO) to SSM on Feb 8th. The long waited result was expected soon but something else happened; SSM asked another BAFO. This time SSM will bargain with compulsory subcontractors on behalf of project, competent companies will provide their price excluding compulsory subcontractors. Those companies are ROKETSAN, ASELSAN and MKEK.
Under these conditions, the process is open to debate. Why OTOKAR was forced to cooperate with formerly defined subcontractors? Why pricing rules are changed after first BAFO was submitted? Will there be further changes at tender after second BAFO is submitted? If these changes are considered as part of development for better pricing, why were they not realized earlier and which institution will be responsible for the delay in the Altay tender?