Roundup: Lithuanian defense officials shaken by suspicious public procurement

Lithuanian army had bought kitchen items for around eight times the market prices in 2014, announced Lithuania's public procurement office on Tuesday after an investigation.

Lithuania's top public procurement controlling body announced that Lithuanian army had purchased cutting boards for 180 euros (200.72 U.S. dollars) one piece, compared to 28 euros in a store, bread knives had been purchased for 142 euros each, compared to 13 euros market price, knife sharpeners had been bought for a price of 103 euros each, butcher knives had been purchased for 250 euros each.

"The public procurement office has made an evaluation of aforementioned contracts at the request of law enforcement authorities and have found violations," said the office in its announcement.

According to the public procurement office, the army had bought the items from Nota bene, its long-term supplier. The company was the only one to submit the tender.

"Tendering processes with one participant and long-term relations with one particular supplier eliminates the purchasing organizations' rational attitude towards the use of state funds," said the office, noting that since 2006 Nota bene has won the army's public tenders worth 30 million euros.

Though, the army's purchase of kitchen items was worth only 173,800 euros, the revealed pricing of purchased kitchen items has angered Lithuania's top officials and media.

President Dalia Grybauskaite said it was "an open robbery of Lithuanian people" and urged Lithuanian Defense Minister Juozas Olekas to take personal responsibility. She reminded that the country's defense ministry is responsible for the army's public procurement.

"I think, if the minister fails to sort it out again, this person should not expect any serious position in the future," added the president.

Following the public procurement office's report, Olekas held a press conference in which he claimed he had initiated an internal audit of the suspicious purchase and applied to the country's prosecutors asking to launch an investigation into possible fraud in 2014.

The military officer responsible for the procurement procedures received a disciplinary sanction, according to Olekas.

"But the story isn't over yet, we try to hold the officers and the company to account and return our money," Olekas said in an interview to Lithuanian national radio LRT.

One of the owners of Nota bene told business website vz.lt that he's surprised by the scandal and claimed the pricing of the kitchen items varies because of the quality differences between the mass and the professional production.

Defense analysts say the scandal causes moral damage to the country's ongoing efforts to increase defense spending.

"How can we explain to our people that we need to increase spending for national defense when we see money being wasted on golden forks," columnist and political analyst Audrius Baciulis told Lithuanian national radio LRT.

Lithuania's defense budget amounts to around 575 million euros, or around 1.5 percent of the country's GDP. The country has set itself a goal to increase defense spending up to 2 percent of GDP by 2018.

In recent years, the Baltic country has stepped up its defense capabilities and increased defense spending. (1 euro =1.12 U.S. dollars) Endit