Damen Could Sue Romania over Corvette Tender Cancellation

The Romanian Ministry of Defense cancelled the tender for the construction of the corvettes after the French from the Naval Group withdrew from the contract. The ships are essential for protection against submarines in the Black Sea. The area has become strategically crucial for the current development of the war.

The tender for the construction of the corvettes was cancelled by the Romanian Ministry of Defense – amid the war on Romania’s borders and on the external border of the European Union and NATO – after the French renounced the contract.

The French from the Naval Group gave up the winning bid, so the Department of Armaments, subordinate to the Ministry of Defense, should have negotiated with the Dutch company Damen, the second-place bidder. This did not happen, and the Ministry of Defense risks being sued.

Defapt.ro revealed that the French company Naval Group, which won the 1.2 billion euro tender for the construction of four military corvettes four years ago, was summoned by the Ministry of National Defense to sign the contract by 16 June 2023. The French refused to sign the contract because it could no longer fit into the bid price, but mainly because the officials from Bucharest promised them the contract for submarines worth almost two billion euros. The actual offer was lower than that.

However, the Dutch company Damen, the second place holder with an offer of 1.255 billion euros, extended its offer. Thus, through the Department for Armaments, the Ministry of National Defence should have negotiated the contract award with the Damen company.

Sources within the Damen company told Defapt.ro that up to this point, no official notification had been received regarding the cancellation of the tender procedure. But unofficially, they are aware of the decision of the Ministry of National Defense to cancel the tender.

At the management level, it was decided to wait for the decision of the Romanian state to be officially notified. An analysis will be made to see if we will sue the ministry. The Romanian state should do what it thinks is best for the Romanian state. Damen made it their business to extend the final financial offer as long as they believed they could make the corvettes on MoD terms. Damen’s offer is still valid.

Damen sources to Defapt.ro

Apparently, Romania doesn’t have enough defence funds to allocate more than EUR 1 billion to the contract, so the tender is about to be cancelled. On the other hand, coincidence or not, Damen has just pulled out of the Mangalia shipyard management, which could add additional tension to relations between Romania and the Netherlands.