22 January 2020

Competing with European companies, the American company „TAG” reconfirms the offer for the Bulgarian Government

Monitorul Apărării şi Securităţii

The American company The Armored Group (TAG) did not give up the equipment project with new armored vehicles for the Bulgarian Defence Ministry. They even reconfirmed their initial offer.

Image source: Mediafax

What’s the content of the project and which were their offers?

In May, TAG showed its availability on being part of the modernization project of infantry’s fight vehicles, but the Bulgarian Defence Ministry refused the offer because the American company seemed  to be interested when the project was already in an advanced phase.

Therefore, at the beginning of August 2019, the Bulgarian Defence Minister announced that he invited four European countries to come up with offers for the disposal/ procurement of 150 armoured vehicles. The 150 armoured vehicles will enter some battalion units’ equipment. Out of the 150 armoured vehicles, 90 are 8x8 dedicated to fight subunits, and 60, to be used by the logistic and support subunits, will be 6x6 or 4x4.

The Bulgarian project is worth of 1, 464 billion leva (around 837 million dollars or 746 million euro), plus the VAT. Among the possible suppliers there are the Artec Gmbh company from Germany (an association between Rheinmetall and Krauss-Maffei Wegmann), Nexter Group from France, Patria from Finland and General Dynamics Land System-Mowag, from Switzerland. In a letter sent by the Bulgarian authorities, it was stated that offers should be sent by October 31st 2019, and auction’s winner will be announced until December 20th.

Offers were opened in December, and the Bulgarian Ministry of Defence announced that only two of them were available, the one from Patria, Finland, and the one coming from General Dynamics. The same ministry was saying that German company’s offer was way above the Bulgarian financial possibilities and the French company asked for direct negotiations between these states’ representatives. The Bulgarian Defence Ministry also stated that they do not want to get to negotiations with the French side, but if the Government wants it, they can reschedule the project, as happened with the F-16 project as well.

According to Bulgarian media, there were many obstacles with this project. Among them, the technical conditions: number of wheels, the ballistic protection level, the armament system and the communication system. Besides the technical tasks, the financial and contribution conditions also slowed down the process. They want the project to last 10 years, and the fight vehicles and equipment to be installed on them will be produced or assembled in Bulgarian factories. Furthermore, 20% of project’s worth must be recovered or, in other words, get back to Bulgarian factories part of the project.

In consideration, TAG company reinitiated the offer and says that the vehicles it can offer Bulgaria- Mastiff 8x8x8, are way better than the ones produced by competing companies.

American company TAG- three decades of armoured production. Will it be enough?

The Armored Group, LLC (TAG) started to produce armoured vehicles back in 1992 and has exclusively focused on armoured autonomous vehicles for transport. Shortly, the company became US’s main armoured vehicles producer of such kind.

Then, company’s effort extended and diversified on two different directions. The first one, the development of tactical armoured autonomous vehicle, and the second the production of SUV armoured vehicles for private and corporate clients.

The factory has production facilities in US (Michigan, Texas and North Carolina), Canada, United Arab Emirates, Jordan, India and Germany.

The TAG offer- seeking a favourable circumstance

TAG reconfirmed its interest for the Bulgarian project at the beginning of January 2020, but did not get an answer yet from the Bulgarian officials. What’s the content of American company’s proposal?

TAG wants to organize, in Bulgaria, a line for 10 military autonomous armoured vehicle models. This line will create around 1000 new jobs.

To that end, TAG will associate a Bulgarian company (TEREM or another one, selected by the Bulgarian govern). Within this association, the Bulgarian company will come up with the field and the labour force, and TAG with the “joint-venture” management, equipment, last generation technology and 28 of experience in the field.

The armoured vehicles to be produced will be sold on the European market. In the first phase, they will try to get Spain to buy them.

Therefore, the American company TAG will use Bulgaria as production facility in EU, but with American technology.

Prime-minister Boiko Borisov will officially announce his stance on this regard soon. But it is noteworthy that, at the end of November 2019, the Bulgarian prime-minister went in an official visit in the US. He also discussed with the American president, Donald Trump, about the strategic partnership between these two countries and the development of bilateral cooperation, focusing on military cooperation agreements.

Some estimation and more uncertainties

For now, the Defence Minister, Krasimir Karachanov, wants to select the fight vehicles provider from the two companies whose offers he thought are available- Patria (Finland) and the multinational company, General Dynamics (Switzerland).

At the same time, Frenchs are still interested on the project. These negotiations show that the French company could have previously coordinated its proposal with governmental officials (apart from Karakachanov). Therefore, it would not be a surprise if we will witness direct Franco-Bulgarian talks. But this decision should be taken by the prime minister, who could require a complete change of projects through a legislative act issued by the parliament. Also, such action could provide an opportunity for integrating the TAG American company in the project.

This development is not supported, as stated above, by the Bulgarian Defence Minister. According to ministry’s agenda, the winner of the auction will be announced in February or March, and hte contract will be signed by mid 2020.

As things are still unclear, the project may be postponed again, or maybe its result will be decided by the future Bulgarian govern.

Romania’s situation       

General Dynamics signed a contract, in 2018, with the Rumanian Army for the delivery of 227 Piranha 5 armored vehicles, with six different configurations. The total worth of the contract is 895 million euro, wherefrom Romania paid, in advance, 30% of the amount. Out of all the 227 carriers, 197 will be made in Romania, within a strategic cooperation and technology transfer project between General Dynamics and Bucharest Mechanical Factory. According to contract’s content, General Dynamic should provide 30 carriers in 2019, and the delivery was delayed due to issues related to communication systems. The communication systems assembled on the fight vehicles were old-fashioned and were not following contract’s provisions. Due to this delay, General Dynamics Company was sanctioned by the Romanian state with a penalty worth of 8, 5 million euro. According to Defence Minister, Nicolae Ciuca, the company paid the penalties and solved the issues.

At the ceremony organized, on November 6th 2019, by General Dynamics, to celebrate the start of the Piranha 5 armored carriers production at the Bucharest Mechanical Factory, have participate the prime-minister Ludovic Orban, Defence Minister, Nicolae Ciuca, Economy Minister, Vilrgil Popescu, the US ambassador, Hans Klemm, and Switzerland ambassador to Bucharest, Arthur Matti.

The wheeled armored vehicle Piranha 5 can carry 11 people – three crew members and one infantry group (eight soldiers), has a 600 horsepower and a 12,7 mm calibre machine gun. The transport autonomy has 500 km and the maximum speed is 100 k/h. The American company General Dynamics is negotiating with Moreni Mechanical Plant for the construction of a Piranha 4+ armored carrier.

Translated by Andreea Soare