German Naval Yards Kiel Files Official Complaint

Credit: GNYK

Published Jan 27, 2020 5:08 PM by The Maritime Executive

The Kiel shipyard German Naval Yards (GNYK) has challenged the decision of the Federal Ministry of Defence to award the MKS 180 multi-purpose combat ship to Damen. 

A formal complaint was sent to the responsible Federal Office for Equipment, Information Technology and Utilization of the German Armed Forces (BAAINBw) on January 24. The shipyard says it will file an application for review with the Federal Public Procurement Chamber if the BAAINBw does not uphold the complaint. Further, if the Public Procurement Chamber does not grant the application for review, the shipyard will file an appeal with the Düsseldorf Higher Regional Court.

Dr. Roland M. Stein, the public procurement law expert entrusted by GNYK with the review proceedings, said: “German Naval Yards is to be excluded because the company is said to have failed to meet less than 0.15 percent of the requirements. We have thoroughly examined the alleged reasons - none justify an exclusion from the proceedings.” Stein is a partner at the Berlin law firm Blomstein.

The decision of the Ministry of Defence was preceded by a complex tendering process lasting several years. The MKS 180 is the largest and the most expensive ($6.7 billion) procurement project in the history of the German Navy. Initially, four ships are to be built. 

Damen says about 80 percent of the investment created by the construction will be spent in Germany. Similarly, around 70 percent of the electronic applications services will be provided by the German subsidiary of Thales and by other German subcontractors. 

Officials in Germany have been working on a new policy aimed at ensuring such shipbuilding projects are given to German yards, but this has not impacted the current choice of Damen. The policy would make the construction of surface ships a key technology area which could enable Germany to be exempt from the E.U. requirement to consider proposals from across Europe.

GNYK was excluded by the Ministry of Defence when the contract to build the K 130 corvettes (second batch) for the German Navy was awarded in 2016. However, the shipyard successfully won a share in the 1.5 billion project in court.