Germany

Information on the disposal of assets and the proceeds of their sales can be found in the annual “Beteiligungsbericht” (Equity Holdings Report), and more specifically in the budget of the Ministry of Defence (Einzelplan 14). The report of the Federal Audit Office also includes information on the disposal of assets. The control of the disposal, as well as other financial aspects within the MoD, is provided either by the respective parliamentary committees or by the Federal Audit Office.

In terms of upcoming conversions (of the German or other militaries) as well as in terms of the announcement of individual opportunities, there is a special coordination entity in the MOD (Referat IUD I 3) that works jointly with the Federal Real Estate Office (Bundesanstalt für Immobilienaufgaben) and the relevant local and state authorities to plan conversion projects but also to conduct market analyses etc. The annual report of the Federal Real Estate Office lists those conversations including detailed information on who the asset went to and a what price. The so-called &quoute;Stationierungskonzept&quoute; specifies that , after giving up the military use, a planning process by the local authorities is required to determine civilian terminal use by third parties.

The &quoute;Gesellschaft für Entwicklung, Beschaffung und Betrieb mbh (g.e.b.b.)&quoute; is a military-owned business whose purpose is to reorganise some of the civilian functions of the Bundeswehr and MoD and to make them more cost-effective. This also includes asset disposals.

The independent and transparent scrutiny of asset disposals is provided by the Federal Audit Office, as this is the external body responsible for the scrutiny of all public expenditures. Data is publicly available.

The Federal Disposal Sales and Marketing Agency (VEBEG), responsible for the asset disposal, is annually controlled by external audit companies as well as sporadically by the Federal Audit Office. The disposal of assets within the Ministry of Defence is additionally controlled by the Defence Committee and (as far as it is already discussed within the budget) the Budget Committee of the German Bundestag. This data is publicly available as well. The revenues of asset disposal for example can be found in the budget of the Ministry of Defence: &quoute;Erlöse aus der Veräusserung von beweglichen Sachen&quoute; (132 01 -032).

Only one of the three intelligence services is directly financed by the Ministry of Defence. In 2013, the MAD (Military Counter-Intelligence Service) received approximately 72 million Euros from a defence budget of 33.2 billion Euros, around 0.2% of the budget.

The BND (Federal Intelligence Service) is financed by the budget of the Federal Chancellery and the BfV (Federal Office for the Protection of the Constitution) by the Ministry of Interior. Their budgets in 2013 were approximately 530 and 206 million Euros respectively (the exact numbers are stated in the Federal budgets, Einzelplan 4; 6 and 14).

Contrary to the budget of the Ministry of Foreign Affairs, the Ministry of Defence does not have a dedicated sub-division dealing with secret expenditures. The secret expenditure of the Ministry of Foreign Affairs is relatively small with an envisaged amount of 1 million Euro in 2013. This is in accordance with Article 19 of the Law of the Federal Audit Office.

In order to calculate the overall percentage of &quoute;secret spending&quoute;, spending of the BND, the BfV and the &quoute;secret&quoute; expenditure of the Ministry of Foreign Affairs have have been considered as the total level of secret expenditure (72 million + 530 million + 206 million + 1 million Euros), thereby conflating the &quoute;defence and security&quoute; budget as well (33.2 billion + 530 million + 206 million + 1 million Euros). The figure arrived at is 2.38%. The score has been selected accordingly.

While the Federal Audit Office oversees secret expenditure, based on subsection (a) of Article 10 of the Federal Budget Regulation, only a limited group of parliamentarians (a subcommittee of the Budget Committee which is referred to as the “Council of Trust”) has access to the full information on secret expenditure spending items relating to national security and military intelligence. This subcommittee is comprised of members from all parties of the Bundestag, and publishes a short bi-annual report on their activities, which is publicly available online.

The Federal Audit Office acts as an external supervisory body and evaluates all accounts of the security sector on a regular basis. Audit reports are distributed to the relevant parliamentary committees, such as the Defence Committee or the Council of Trust. Additionally (with exception to the accounts of the intelligence services) all members of the Bundestag and the parliamentary groups have the right to ask questions in accordance with Article 20 and Article 38 of the German Basic Law.

There is no expenditure outside of the defence budget. Support by the armed forces with personnel or material in case of unforeseen events such as natural disasters can be initially funded by the Ministry of Defence (MoD), in which case the beneficiary must reimburse the MoD after the measure is completed. Although, in some exceptions, the reimbursement may be withdrawn by the Ministry of Finance.

All military expenditure is incorporated in the federal budget, specifically the budget of the Ministry of Defence (Einzelplan 14). In case the budget is not suitable for specific actions, a so called &quoute;Wirtschaftsplan&quoute; (business plan) has to be compiled and added to the original budget according to Article 26 of the Bundeshaushaltsordnung. Off-budget military expenditure is thus not existent in Germany.

Mechanisms for classifying information are based on the law “Gesetz über die Voraussetzungen und das Verfahren von Sicherheitsüberprüfungen des Bundes”, and on directives such as the “Verschlusssachenanweisung”. It does not seem to be the case that these mechanisms as such are subject to effective scrutiny.

Classified information is automatically declassified after 30 years, or earlier in case the agency responsible for classifying a specific document reevaluates the document. Yet it does not seem to be practicable to do so, due to the amount of resources needed for these procedures.

According to the German Freedom of Information Law, everyone 'is entitled to official information from the authorities of the Federal Government in accordance with the provisions of this Act'. It specifies that the entitlement to access to information shall not apply 'where disclosure of the information may have detrimental effects on . . . military and other security-critical interests of the Federal Armed Forces'. In general '[a]ccess to the information should be provided within one month'. There is furthermore an appeal process for those who consider their right to information to have been violated.

There is no evidence to suggest that those regulations are not strictly upheld. In a document with all parliamentary questions and answers from 2013, one question concerned the number of access to information requests to the German Ministry of Defence (BMVg) and a breakdown of which answers were and were not replied to and on what grounds. The BMVg answered this question in full and provided the breakdown.

RESPONSE TO PEER REVIEWER 2 AND GOVERNMENT REVIEWER: Assessor agrees with comments. Score changed from 2 to 3. It remains unclear whether the mechanisms themselves are subject to scrutiny.

The annual &quoute;Beteiligungsbericht&quoute; discloses the German government’s financial participation in commercial business, including the commercial activity and beneficial ownership of the Ministry of Defence (Article 65 of the &quoute;Bundeshaushaltsordnung&quoute; (BHO) provides guidance for beneficial ownership of commercial businesses).

The report is generated by the Treasury and is comprised of the findings from external audit companies. These reports are subject to the scrutiny of the Federal Audit Office and are available to the public. The companies, however, do not appear to publish annual reports on their respective websites.

Military-owned businesses are subject to independent scrutiny by private audit companies according to international standards as well as by the Federal Audit Office, which acts independently as an external auditor of the German defence budget (see Q15).

The combined findings are published in the annual “Beteiligungsbericht”. Legislative scrutiny is regulated by Article 69 of the “Bundeshaushaltsordnung”. The &quoute;Beteiligungsbericht&quoute; includes the shareholder structure, the corporate purpose, the annual business as well as an excerpt of the financial report (rough income statement, balance sheet and equity ratio). It also includes financial contributions, management salaries, earnings of the board of directors and the name of the auditor of each company. However, the audit details seem to be only available in this abbreviated form in the &quoute;Beteiligungsbericht&quoute; as the companies do not seem to publish annual reports on their webpages. These critical reports of the Federal Audit Office are often debated in the public.

In accordance with Article 20 of the “Soldatengesetz” and Article 97 to 101 of the “Bundesbeamtengesetz” (BBG), the Ministry of Defence distinguishes between ancillary activities that are subject to approval (Article 99 of the BBG) and activities that need no approval (Article 100 of the BBG).

A 2013 report by the Federal Government mentioned a maximum of 16 cases annually between 2010 and 2012 that required authorisation, and 12 cases that required no authorisation. Between 2010 and 2012 9 individuals were prosecuted for unauthorised activities. It seems the Ministry of Defence has a very stringent and effective policy regarding unauthorised private enterprise by military or other defence ministry employees.

Further ways to sanction misconduct are to be found in Article 23 Soldatengesetz (Legal Status of Military Personnel Act) and Article 77 Bundesbeamtengesetz (Federal Civil Service Act ).

Beyond that, contractors of the Bundeswehr undertake in the &quoute;Zusätzlichen Vertragsbedingungen des BMVg zur VOL Teil B&quoute; (Additional Contractual Provisions of the MoD concerning Part B of the Conditions Concerning Contracts for Supplies and Services) that they will not employ civil servants or soldiers, neither whilst on active duty nor after retirement, in secondary employment without approval of the MoD. Infringement will result in contractual penalties.

While there is much legal evidence that the Ministry of Defence (MoD) and its officials support anti-corruption measures, such as ratification of most international agreements on this topic, there is scant evidence that any representatives of the MoD have publicly committed to domestic anti-corruption and integrity measures.

German government representatives do not generally appear to perceive an identified need for domestic anti-corruption measures, although they can be vocal about the need for anti-corruption measures vis-à-vis allied countries. Evidence could for example be found that the former Minister of Defence actively asked for better anti-corruption measures in countries where the Bundeswehr was stationed.

Cases of bribery or corruption may lead to multi-year prison sentences or fines, according to Articles 331 to 358 of the German Strafgesetzbuch. In cases involving public employees, condemnation can additionally lead to disciplinary measures and, in more severe cases, to the loss of jobs, pension and medical allowance claims.

There is evidence that the Ministry of Defence acts quite rigidly in such cases and that the respective branch within the Legal Affairs Directorate works very closely with external prosecutors. The Annual Corruption Report of the Federal Criminal Police Office reported that approximately 40 individuals in the military were prosecuted in 2012 for acts of bribery or corruption.

Personnel involved in corruption or bribery is liable to restitute pecuniary advantages obtained in a breach of duty, unless forfeiture for the benefit of the exchequer has already been decreed in the criminal proceedings ( §§ 73 ff StGB [German Criminal Code]) or the advantage obtained has already passed to the government in another way. In addition, Bundeswehr members are liable to pay damages caused by premeditated or grossly negligent breaches of duty.

The Federal Government Directive concerning the Prevention of Corruption in the Federal Administration, as well as the implementing provision of the Ministry of Defence, require the establishment of a “contact person for corruption prevention”. The website has statements that encourage whistle-blowing.

Subsection (a) of Paragraph (1) of Article 5 of the Directive clearly states that public servants can directly talk to the contact person regardless of the official chain of command in the respective agency. Citizens can also contact this person directly. The directive encourages individuals to report corruption where they witness it and reiterates the importance of providing evidence.

The “Code of Practice against Corruption” referenced has several Articles that directly discuss whistleblowing (3, 6 and 9), and the commentary for Article 6 states that the contact person has to observe secrecy when requested by an individual.

In terms of legal protection for whistle-blowers, a 2014 report which evaluated the same across G20 countries found that there were only limited legal provisions for protection which applied only to public officials reporting bribery or acceptance of gratuities. Specifically, the report found the the &quoute;provisions and protections for anonymous reporting&quoute; and &quoute;broad retaliation protections&quoute; to be &quoute;somewhat or partially comprehensive&quoute;, while &quoute;confidentiality protection&quoute; and the requirement of &quoute;internal disclosure procedures&quoute; to be &quoute;absent/not at all comprehensive&quoute;. Further, as there is no dedicated national agency to receive such complaints, it is mostly up to labour courts to determine whether a whistle-blower could be compensated or protected.

There are isolated cases of individuals reporting irregularities or other issues (to the media) but these cases were not directly related to corruption. Evidence could not be found if those cases were first brought to the contact person for corruption prevention and if they were dealt with adequately.

Article 4 of the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration requires special attention for the selection of personnel in areas with a higher corruption risk and furthermore limits the time in post for this personnel to a maximum length of five years. Exceptions to this rule are possible but have to be justified by the respective agency.

Additionally, there is an array of special requirements for sensitive areas. For example, subsection (1) of paragraph (5) of Article 11 of the additional contractual provisions for service agreements with the Ministry of Defence (MoD) defines post-retirement restrictions for public servants and requires a “certificate of non-objection” from the MoD, as well as defining that retired public servants may not take up posts with tendering companies within three years. However, corruption cases in the media imply that due diligence procedures, especially concerning procurement and tender processes, are lacking.

RESPONSE TO GOVERNMENT REVIEWER: The criterion for a score of 4 demands that these positions are openly declared and the specific rules of conduct associated with such position are made available. This does not seem to be the case. Score maintained.

The number of civilian and military personnel is available in Article 2 of the Preliminary Note to the budget of the Ministry of Defence in accordance with subsection (a) of Article 87 of the German Basic Law. Moreover, the organisational structure and information about commanding personnel is available on the Ministry of Defence website, and respectively on the websites of the specific agencies.

Pay rates and allowances for both civilian and military personnel are defined by the “Bundesbesoldungsgesetz” (Federal Compensation Law) and its derived directives. All information regarding pay rates is publicly available and there are additional non-governmental websites with supplemental information and overviews of current salary charts / payment structures.

The system of payment is well established in accordance with Article 30 of the “Soldatengesetz” and the “Bundesbesoldungsgesetz”. Personnel receive their pay on the first day of each month. There is no evidence that basic pay is non-discretionary, especially since the payment structures are very well explained on the Website of the BMVg.

The requirements and procedures for the appointment and promotion of military personnel are clearly defined in Articles 27 and 42 of the “Soldatengesetz” (Legal Status of Military Personnel Act) in accordance with Paragraph (2) of Article 33 of the German Basic Law. More specific requirements for military personnel at mid and top management levels can be found, for instance, in Article 25 to 28 of the “Soldatenlaufbahnverordnung” (Act on the Career of Military Personnel).

In the &quoute;Stellungnahme des Bundesministeriums der Verteidigung zum Jahresbericht 2012 des Wehrbeauftragten des Deutschen Bundestages&quoute; (statement of the MoD about the 2012 annual report of the parliamentary commissioner for the armed forces), the MoD responds to reproaches of unjust and untimely promotions, laying out the reasoning behind mechanisms in place and decisions taken. It also acknowledges shortcomings in the system, such as the fact those entering the Bundeswehr at a senior level (in very specific cases) could have more chances for promotion than their peers who have reached that level through promotion from a lower level. The report of the
parliamentary commissioner for the armed forces can be seen as a form of oversight mechanism.

In accordance with Article 33 of the German Basic Law, which defines the constitutional principle of equal treatment and selection of the most suitable candidates, the “Soldatengesetz” (Legal Status of Military Personnel Act) stipulates the rights and duties of military personnel concerning promotion, more specifically defined in Article 27 and 42. The legal framework for civilian personnel is similarly strict and defined in the “Bundesbeamtengesetz” (Federal Civil Service Act). Both laws have additional regulations concerning career paths.

Selection decisions based on civil service law are subject to a review by the administrative courts with regard to compliance with the selection of the most suitable candidates. Additional independent oversight is provided by the Federal Personnel Commission based on Chapter 8 in the Federal Civil Service Act.

Compulsory conscription was abolished by the Federal Government on December 15th 2010. This became effective in July 2011. The question is therefore not applicable.

There is no specific policy about refusing bribes to gain preferred postings in the recruitment process, as this falls under the scope of the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration. The score has been awarded on the basis that there are provisions to deter against this, but no specific policy.

The Directive states in the code of conduct (Article 6) that employees should contact the corruption prevention contact person if indication of possible bribery exists. As candidates can express their wishes regarding preferred postings in the application form, and later again during the interview stage, with senior staff, it seems unlikely that undisclosed bribery in the context of voluntary conscription is happening. There is no evidence in the media that would imply that such cases happen.

‘Ghost-soldiers’ or non-existent soldiers in payroll do not seem to be allowed and there is no evidence that any cases exist. The number of military personnel is stipulated by Article 87 of the German Basic Law and is shown in Article 2 of the preliminary note of the annual budget of the Ministry of Defence.

The tables of organisation and equipment (Stärke- und Ausstattungsnachweisung, STAN) provide further information on the exact number, positions and equipment of military units (STANs are not publicly accessible but there are similar STANs for civil protection units available on the webpage of the Federal Office of Civil Protection and Disaster Assistance that provide an insight into how exact these aspects are defined within Germany). The budget is also scrutinised by the Federal Audit Office and the respective parliamentary committees.

The reorientation of the Bundeswehr during the past 10 years has led to an even stricter separation of the chains of command and chains of payment in the Bundeswehr. While previously, civil regional agencies within the Ministry of Defence (MoD) were responsible for payments, since 2013 the payroll accounting is no longer done by the MoD but by an agency within the Ministry of the Interior. Financial management and controlling within the Bundeswehr is organised by the “Bundesamt für Infrastruktur, Umweltschutz und Dienstleistungen der Bundeswehr” which is a civil agency within the MoD.

The Annex to the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration serves as a Code of Conduct for all public servants and includes very clear guidance with respect to bribery, conflicts of interest and other corruption-related activities. Additionally, the individual issues addressed in the question are regulated in different statutory guidelines. The “Soldatengesetz” (Legal Status of Military Personnel Act) prohibits the acceptance of rewards and gifts (Article 19) and regulates furthermore cases of conflict of interest.

The Government Reviewer has provided more detailed information below on conduct standards specified in legislation. The provisions for an oversight mechanism are not clear.

There is evidence of effective prosecution of defence services personnel for corrupt activities in recent years, and the results of the prosecution are publicly available and can be found in the media or specific public watchdog websites. Trials, the pronouncement of judgements and the decisions by the court are publicly available in accordance with Paragraph 169 of the Court Act (Gerichtsverfahrensgesetz).

The Federal Government Directive concerning the Prevention of Corruption in the Federal Administration, as well as the implementing provision of the Ministry of Defence, requires anti-corruption training for civilian and military personnel. According to the annual report on corruption prevention, this training occurs annually. Additionally, commanding officers and the corruption prevention contact persons are encouraged to raise awareness about corruption within their agencies in conversations at least once a year.

The Ministry of Defence uses an IT-based learning programme on their internal webpage with 5 modules for everyone (according to an interview source; the 2012 corruption prevention report states that the MoD does not have an IT-based learning tool), and an additional one for employees in high risk areas, there are also e-learning platforms and seminars available within other institutions such as the Federal Academy of Public Administration.

The annual corruption report of the Federal Criminal Police Office showed that approximately 40 individuals in the military were prosecuted for acts of bribery or corruption in 2012. However, with the exception of high-level cases that are debated in the media, a public outcome of the prosecution of public servants (not just in the area of defence) has not occurred, and the individuals remain anonymous. This has not so much to do with a lack of a specific policy but rather with the protection of the constitutionally guaranteed personal rights of individuals.

Response to Government Reviewer: Agree with comments.

Score changed from 3 to 4.

Article 332 and 334 of the German Strafgesetzbuch (Penal Code) explicitly deal with the illegality of facilitation payments and instance of misconduct may lead to multi-year imprisonment in severe cases. Public servants would additionally be subject to disciplinary sanctions, such as losing their jobs. There is no evidence that these mechanisms are not effectively applied.

From Q18: The 2012 Annual Report of the Federal Ministry of the Interior mentioned three allegations of corruption within the Ministry of Defence (MoD) that led to further investigations and a legal trial. The investigation of such a case is initiated by the R II 1 Branch of the Legal Affairs Directorate of the MoD and is then turned over to external prosecutors. The process of investigating corruption is defined in the Federal Anti-corruption Guidelines and its implementing provision within the MoD. The guidelines also define specific reporting obligations for suspicious cases within Bundeswehr agencies.

The Bundeswehr has no specific operational doctrine that focuses on issues of corruption, but the latest Weissbuch and Defence Policy Guidelines both mention corruption risks, at least indirectly.

Regarding deployments it seems that while the Bundeswehr is aware of corruption risks in theatre, for example in Afghanistan, it considers taking an active stance against corruption as too risky. This impression seems to be confirmed by a report of the Afghanistan Analyst Network which specifically mentions that the Bundeswehr tried to ignore corruption problems with Afghan commanders in their area in order to avoid dangerous situations for the German troops deployed.

RESPONSE TO GOVERNMENT REVIEWER: Accepted. Score raised to 2.

Commanders at all levels are trained on corruption issues insofar as it is outlined in the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration, and the implementing provision of the Ministry of Defence, which also applies to deployments.

This means that it may not be considered important during mission training to focus on an area that should already be well known by any commanding officer in the Bundeswehr. However, the contact person for anti-corruption is provided with training. According to a 2013 report by the Afghanistan Analyst Network (AAN), the German Bundeswehr did not actively try to influence power structures in their area of responsibility and instead legalistically focused on cooperation with Afghan commanders. This would imply that knowledge on a corruption issue is/was not well applied during deployment.

RESPONSE TO GOVERNMENT REVIEWER: Score changed from 1 to 2.

While there is no particular guideline addressing corruption while on deployed operations or peacekeeping missions, the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration and the implementing provision of the Ministry of Defence, also apply to deployments in foreign countries. According to these guidelines, a contact person for the prevention of corruption needs to be appointed. According to the German MoD, key personnel receive refresher briefings on corruption during pre-deployment training and commanders are assisted by trained anti-corruption representatives during missions.

While there is no particular guideline addressing corruption while on deployed operations or peacekeeping missions, the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration and the implementing provision of the Ministry of Defence also apply to deployments in foreign countries.

Additionally, all military staff receive training before the deployment that include, for example, specific intercultural lectures and practical exercises. There is also a transition period in deployments that should allow for the transfer of specific knowledge that is needed in cases such as contracting.

The overall impression regarding private military contractors (PMCs) in Germany is that they are not allowed, as it is solely the responsibility of the Federal state to deploy military forces according to Article 87a of the German Basic Law. Thus, it may appear that the involvement of PMCs is not allowed in almost all responsibilities of the Bundeswehr.

Yet the European Parliament highlighted the problem that the German government does not have an official definition of PMCs or of private security companies (PSCs). One could argue that it can therefore not claim that neither PMCs nor PSCs are being used, despite the fact that the Bundeswehr as well as other German ministries supplied military support companies or security services in Afghanistan.

RESPONSE TO GOVERNMENT REVIEWER: While it is true that the definition of PMCs used in this review is rather broad, a similar definition is, for example, used in the ‘2008 Montreux Document’ by the Swiss Federal Department of Foreign Affairs and the International Committee of the Red Cross stating that PMCs are “private business entities that provide military and/or security services, irrespective of how they describe themselves”. This would also include logistic services. According to a 2011 report by the German PRIF (HSFK), Germany has used security personnel in Afghanistan to protect the German embassy as well as other locations. The Bundeswehr has used PMCs for “transport, logistic, catering, maintenance, repairs, laundry services, wastewater- and garbage disposal, fuel supply and protection services” for the Bundeswehr and German bases in Afghanistan. Also, it is important to mention that PMCs are responsible for their own protection, according to the German Minister of defence in 2010, which would imply that armed contractors were included in the services.

TI RESPONSE: Score changed to 2, in light of a lack of evidence for sanctions being not only available but also applied.

The procurement needs of the armed forces are organised by the “Bundesamt für Ausrüstung, Informationstechnik und Nutzung” (Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw)) in accordance with subsection (b) of Article 87 of the German Basic Law.

The Federal Government Directive concerning the Prevention of Corruption in the Federal Administration and the implementing provision of the Ministry of Defence also apply to this federal office, and therefore, for all procurement issues.

For example, the Guidelines request identification of areas of corruption risk. While the law, based on international regulations such as WTO GPA as well as the EU’s Directive 2009/81/EC, allows certain exceptions in the area of security and defence, for example that the “Act against restraints of competition” does not apply for certain defence procurements, according to subsection (c) of Paragraph 100, this does not exclude the procurement from the Guidelines. Additionally, there is an array of specific regulations for defence procurement that include anti-corruption measures within the Customer Product Management.

The defence procurement cycle process for all varieties of procurement within the Ministry of Defence is defined in the Customer Product Management (CPM). The process is divided into three phases: an analysis phase, a production phase and an in-service phase. It defines the objectives, the specific work stages and the activities and responsibilities of each phase.

The process also includes (asset) disposal but only as part of the in-service phase. The CPM is disclosed to the public in several languages on the website of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw). Both the new version, implemented in 2012, and the older version are available on the webpage.

The whole CPM document gives the impression that Germany is striving to increase transparency within procurement processes, for example, the CPM also includes several appendices with additional information such as terms and definitions or specific information on fast-track procurements.

Germany has two oversight mechanisms for defence procurement in place. On the one hand, parliamentary scrutiny, especially through the Defence Committee and the Budget Committee, and, on the other hand, independent oversight through the Federal Audit Office (FAO).

The Ministry of Defence must specifically submit procurements of more than 25 million Euros, procurements with a cost increase, discontinued projects with financial implications exceeding 25 million Euros, and reports requested by parliamentarians. This is defined in the Customer Product Management (CPM).

The Federal Audit Office can request reports and additionally controls the overall budget and financial management of the Ministry of Defence. Reports for the Federal Audit Office have been heavily discussed in the media, especially because the FAO has more than once criticised the transparency of large procurement projects. However, due to a change of the legal basis during the past year, the FAO can now deny requests for reports from the public more easily, which could lead to a severe decrease in transparency.

In line with EU Directive 2009/81/EC Germany now publishes tenders for the procurement of 'hard' defence materials in the European public procurement journal: “Tenders Electronic Daily”. The TED also includes the contracts awarded for the tender processes, and additional information regarding procurement can be found in the budget of the Ministry of Defence.

Invitations to tender for potential procurements (with the exception of cases without competition according to the “Act against restraints of competition”) are made publicly available on the webpage of the Federal Government. Additionally, for the field of ‘hard’ defence materials and according to the Military Weapons List under Article 296 of the EC contract, invitations are made publicly available in the Electronic Bulletin Board (EBB) of the European Defence Agency.

The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) also has online information available about selected procurement projects, and in some specific cases special webpages are created with additional information, such as the Herkules IT project.

A private magazine called ‘Griephan’ offers a large amount of information about current procurement projects. Yet a proper overview of defence purchases is missing, and the information about selected projects from the BAAINBw seems to focus on advertising instead of transparency.

RESPONSE TO GOVERNMENT REVIEWER: Main text changed according to the suggestions. Score maintained.

The required procedures and standards for companies are listed on the webpage of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw).

Procedures are based on the Customer Product Management and the specific information that companies must provide is listed in the bidding documents and can vary depending on the type of procurement project. They usually include information about security, reliability, general conditions and definitions for cost prices.

Anti-corruption clauses can be required according to subsection (1) of Article 12 of the Federal Government Directive, concerning the Prevention of Corruption in the Federal Administration, and subsection (2) of the same Article, which states that private companies have to work under the standards defined in the Directive in accordance with subsection (1) of Article 1 of the “Verpflichtungsgesetz”.

The fundamentals of the Bundeswehr's capability planning are the Defence Policy Guidelines, the derived set of capabilities, and the 2013 concept of the Bundeswehr (Weißbuch). These documents are well-audited and open to the public.

In addition, more specific strategic objectives from the Ministry of Defence, such as the “Eckpunktepapier” (benchmark paper), the “Dresdner Erlass” (Dresden Decree) or the new “Konzeption der Bundeswehr” (Doctrine of the Armed Forces) and requirements from international organisations, such as NATO or EU, provide further information.

The Chief of Defence of the German Armed Forces is responsible for capability management. The so-called “Integrierter Plannungsprozess” (Integrated Planning Process) defines the phases of integrated planning, from strategy development to future development planning to capability planning to the definition of specific resources and its implementation. It also includes the areas of budgeting and controlling within the MoD.

Yet there was criticism from the Federal Audit Office in 2012 that procurements of hand held weapons had been made “without conceptual planning” and that feedback from the Armed Forces, especially from deployments, had only minor influence when conducting procurement.

RESPONSE TO GOVERNMENT REVIEWER: It is arguably true that there is a logical flow down from strategy to individual procurements, which would be the main criterion for a score of 4. However, government audits as well as the latest report on ‘Comprehensive Evaluation and Risk Analysis of Central Defence Procurement Projects’ by KPMG found problems in the capability as well as the project management, the procurement concept and reporting. These do not provide confidence that the logical flow is always followed. Main text changed according to suggestions from Government Reviewer. Score maintained.

Specific requirements are identified and quantified within the “Integrierter Planungsprozess” (Integrated Planning Process), organised by the Directorate-General for Planning. Planning parameters are derived from the planning guidelines and the capability requirements. They then lead – after the analysis of financial requirements – to a resource plan. The units within the MoD that are responsible for controlling and budget are included in this process.

Yet the Federal Audit Office in 2012 criticised the procurement of hand held weapons as having been made “without conceptual planning” and that feedback from the Armed Forces, especially from deployments, had only minor influence when doing procurement. Additionally, newer reports from 2014 highlight examples of unnecessary procurement and fault the transparency of the planning processes.

RESPONSE TO GOVERNMENT REVIEWER: Main text changed according to the suggestions. Score maintained.

Public procurement in Germany is generally conducted as an open competition in accordance with international regulations such as WTO GPA and specific German law, particularly the “Gesetz gegen Wettbewerbsbeschränkungen” (Act Against Restraints of Competition).

Certain defence procurements are excluded from the competition requirement according to subsection (c) of Paragraph 100. However, especially with the adoption of 2009/81/EC and the resulting new “Vergabeverordnung für die Bereiche Verteidigung und Sicherheit” (Awarding Regulation for the Area of Defence and Security), the number of possible exceptions has decreased drastically. An increase of tender procedures can already be observed in the Tenders Electronic Daily webportal.

Specific statistics that would provide information about the aggregated volume should soon be available due to 2009/81/EC, yet they are missing at the moment. The score has been selected on the basis that it not possible to assess the proportion of defence contracts that are single sourced.

The main intention of the new “Integrierter Planungsprozess” (Integrated Planning Process) is to have combined teams of specialists from different areas within the Ministry of Defence, which should be part of the whole life cycle of a product, including the tender phase.

There is an array of regulations, such as the “Gesetz gegen Wettbewerbsbeschränkungen” (Act Against Restraints of Competition), for this phase and, as with all processes within the Federal Government, the Federal Audit Office can independently control the work of the government.

According to Articles 102 and 104 of the Act Against Restraints of Competition, there is also the potential for an independent review of the decision of the tender boards to ensure a fair process.

There appears to be a lack of evidence for tender board decisions being audited, and the most recent Audit Office Annual Report does not mention the &quoute;integrierter Planungsprozess&quoute;.

Collusion is prohibited in German legislation according to Article 298 of the Strafgesetzbuch (Criminal Code), and Germany has an independent competition authority (Bundeskartellamt) within the Federal Ministry of Economics and Energy based on Article 32ff of the Act Against Restraints of Competition. The act also provides further information about the procedures and punishments.

A recent investigation led to three suppliers being awarded a penalty of 1.3 million Euros for collusion in July 2015. They were bidding for supplies to military vehicles. A forth company was not punished as they disclosed the collusion to the authorities.

The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) is responsible for all defence procurement.

The tasks of the BAAINBw staff regarding reporting and delivery of the defence contractors are specifically defined in the Customer Product Management (CPM), for example in Article 2.2.4 “Integrierte Nachweisführung” (Integrated Compliance Demonstration).

According to these guidelines, the project manager is responsible for the collection of the reports. Also, the CPM stresses the importance of project management and project management accounting (the in-house management tools to control/assess the process).

Additionally, the Government Quality Assurance is used to inspect the performance for compliance with the contractor. The CPM and the management tools are subject to internal training.

There are several mechanisms in place to allow companies to complain about perceived malpractice. The most important is that companies can, according to Articles 116 to 124 of the Act Against Restraints of Competition, complain about decisions taken by the responsible agency.

In the case of defence procurement, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) is the responsible agency.

Additionally, based on the Federal Anti-corruption Guidelines and the derived documents within the Ministry of Defence, the BAAINBw has, because of its size, a dedicated contact person for corruption prevention. It is also possible to send anonymous information to this contact person.

The subsection (2) of Article 12 of the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration states that private companies have to work under the standards defined in the Directive in accordance with subsection (1) of Article 1 of the “Verpflichtungsgesetz”.

This means that a supplier would be entitled to the same sanctions as public servants based on the German Criminal Law. The Criminal Law defines such sanctions further, for example, bribery is punishable by imprisonment from three months up to five years, or in less severe cases by imprisonment up to two years or financial penalties according to Article 334.

Additionally, companies can be fined up to 10 million Euros, and this fine can be exceptionally higher when the corrupt practice was more profitable for the company. Germany does not practice blacklisting.

A recent investigation led to three suppliers being awarded a penalty of 1.3 million Euros for collusion in July 2015. They were bidding for supplies to military vehicles. A fourth company was not punished as they disclosed the collusion to the authorities.

The score has been awarded on the basis that sanctions are consistently applied in practice, but they do not include blacklisting.

Officially, the Ministry of Defence is against offsets because they “create an obstacle for fair competition&quoute;, and explicitly states that that no offsets will be asked for, as is reiterated by the Government Reviewer comments (below).

However, Germany may quasi direct-offsets in cooperative projects and defines cost- and work-share agreements, that too in exceptional cases.

RESPONSE TO GOVERNMENT REVIEWER: Agreed. Score changed to N/A.

Officially, the Ministry of Defence is against offsets because they “create an obstacle for fair competition,” and explicitly states that that no offsets will be asked for, as is reiterated by the Government Reviewer comments (below).

However, Germany may quasi direct-offsets in cooperative projects and defines cost- and work-share agreements, that too in exceptional cases.

RESPONSE TO GOVERNMENT REVIEWER: Agreed. Score changed to N/A.

Officially, the Ministry of Defence is against offsets because they “create an obstacle for fair competition,” and explicitly states that that no offsets will be asked for, as is reiterated by the Government Reviewer comments (below).

However, Germany may quasi direct-offsets in cooperative projects and defines cost- and work-share agreements, that too in exceptional cases.

RESPONSE TO GOVERNMENT REVIEWER: Agreed. Score changed to N/A.

Article 8.2.1 of the “Zusätzliche Vertragsbedingungen des Bundesministeriums der Verteidigung zur Verdingungsordnung für Leistungen Teil B” (Additional Terms of Contract of the Federal Ministry of defence to Part B of the General Terms and Conditions Concerning Contracts for Supplies and Services of 28 February 1998 as amended on 10 May 2001) states that the contractor is not allowed to involve third parties as intermediaries.

An exception to this rule only occurs when the procurement agency (BAAINBw) expresses consent, or if the consultation only happens for “legal, tax-related, business economy or technical matters”. The process of the audit is defined in the Customer Product Management, particularly in Article 2.2.4 “Integrierte Nachweisführung” (Integrated Compliance Demonstration).

Specific financial information, with the exception of the budget information (target costs for the current and following year, as well as the actual costs of the year before for individual procurement projects) is included in the Einzelplan 14 (the budget of the MoD. It is not publicly available, especially not prior to the signing of the contract.

The Federal Audit Office stated in 2014 that one of the problems in this situation is that the MoD does not have all of the required information, referencing the example of the Eurofighter procurement and the missing data for life-cycle costing.

(Score reassessed in finalisation stage of research and changed from 2 to 1)

Germany’s anti-corruption measures are based on the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration. Contractors have to work under the standards defined in the Directive in accordance with subsection (1) of Article 1 of the “Verpflichtungsgesetz”.

Article 1 also includes subsidiaries and subcontractors, thus anti-corruption measures are enforced in the same manner as for main contractors. There is no evidence that anti-corruption programmes are less enforced at these sublevels.

The score has been awarded on the basis that this requirement does not equate to an obligation for the subcontractor to have an anti-corruption programme in place.

Exclusive external political influence is rather uncommon for Germany.

According to SIPRI, Germany was the third largest arms exporter in the world between 2008 and 2012. With approximately 100,000 defence company employees in 2011 and an additional 220,000 dependent employees in supplying or subcontracting companies, the defence industry is considered very relevant from a defence political, as well as from an economic, point of view.

The German focus on its own arms industry has led to fewer and fewer arms imports, which have decreased to an average of approximately 100 million Euros between 2007 and 2011.

Taking this into account, and while it may be very common for defence acquisitions to be based on political influence by the selling nation, in the case of Germany this selling nation is almost exclusively the buying nation as well.

An exception may be the planning of arms cooperation projects, but Germany has generally been in the lead within such projects, rather than the other way around. A 2014 study commissioned by the Ministry of Defence interestingly defined German key defence capabilities that should definitely be maintained in a very narrow way, excluding e.g. battle tanks, fighter jets and small arms and light weapons.

There have been expert comments suggesting that imporant procurement decisions have been made based on political considerations rather then needs, price, and availability.