ECONOMY

A guide for negotiating with the state

On the face of it, the state conducts its affairs in a fair and reasonable manner. For instance, in the tenders for procurements of the Defense Ministry, the products that are preferred according to law are those with high domestic added value. No one would disagree with this, since the country has high military equipment requirements and Greek involvement in the process should be desirable. This way procurements would assist the local industry by boosting employment and the acquisition of know-how for Greek enterprises. In practice, however, domestic added value is turning into an additional pretext for helping some parties close deals while doing virtually nothing for local production. This situation is described in a «confidential» document obtained by Kathimerini, sent by a well-known Greek entrepreneur to a French firm proposing that it undertake the management of a program of Greek added value and offsets arising from a deal for the procurement of (electronic) equipment that was signed in the past by the foreign company itself. The businessman has no relationship with the electronics sector, but this does not seem to matter. He seems to know the subject and claims he has already proceeded to the «preliminary analysis,» which allows him to declare that he can cover all requirements. He therefore asks for authorization to conduct the negotiations. He even specifies the stages defining the services he intends to offer: organizing negotiations to determine the extent of domestic added value in the framework of the existing contract, its monitoring and successful completion; organizing negotiations with a view to the successful implementation of the offsets envisaged in the contract; drafting an agreement for the new contract covering the activation of options, in other words, other material the state can buy; negotiation of offsets and options; and signing and fulfillment of contracts. The scope of the detailed description of the stages is such that, as each is completed a part of the middleman’s fee will be payable, out of a total of 4 million euros. This covers all expenses, as it specifies. Defense procurements ought to have domestic involvement where possible. They must also come with offsets, which in theory means foreign investments in Greece or exports of domestic products. In practice, however, all this works as a pretext for some artful dodgers to make money, which effectively raises the cost of procurements. It is also certain that procurers calculate this hidden cost as well. And let no one claim these things belong to some long-gone and sinful past. The letter with the proposal was sent just a few months ago. It was a routine business proposal requiring a «cooperation agreement,» with certain terms. It happens not to concern a major program of military material procurements and largely for this reason has stayed out of the spotlight. It is, however, a typical example of the business interests growing all around the broader public sector, always citing the common good. This may be one of the secrets to making successful moves: claiming they serve higher aims. Alas, only in theory.