RKIK cannot document how it awarded 70 million euro contract

Estonia’s State Defence Investment Centre, known as RKIK, cannot document how it selected Datasel S.R.L. for an approximately 70 million euro ammunition contract, ERR reports. RKIK has acknowledged that procurement rules were not followed in 2024 or in the projects linked to Datasel.

RKIK Director General Elmar Vaher said he did not know how the first negotiations with Datasel had begun.

“I did not work here then, and neither did my team. Therefore, we can currently speak about how we are acting now,” Vaher said.

Media reports have alleged that Datasel copied images of shells from other websites, including a computer game cover. RKIK does not know how the decision was made to cooperate with the company, and there is no documented overview of how contact with Datasel was established.

There is also no retrospective record explaining how Datasel was subjected to a background check. Such checks normally establish whether a company has the technology it is offering and can demonstrate its ability to deliver it. A company’s financial capacity is also assessed, including its investors, bank guarantees and other financing options.

European Commission team to visit Estonia

Speaking at a Monday meeting of the parliamentary special committee on state budget control, Vaher said the European Commission would send an investigative team to Estonia for three days at the end of September. The team will examine how well RKIK fulfilled its duty of care.

RKIK is continuing to search for documents concerning events in 2024 and is contacting former managers to gain as complete an overview as possible of how the Datasel contracts were formed.

The initial claim that only one contract had gone wrong has since changed. According to RKIK, seven contracts have been terminated.

Five of them are currently before courts or arbitration tribunals. Two others have been terminated, but negotiations are continuing and preparations are being made for possible court disputes. RKIK cannot comment in detail on those two contracts because the negotiations are confidential.

The contracts before courts and arbitration tribunals are linked to Datasel.

Datasel has submitted a counterclaim against RKIK, but its precise content has not been disclosed. RKIK has also not seen the documents supporting the claim. As the disputes are ongoing, RKIK has not ruled out the possibility that the counterclaim is a tactical response. The centre has declined to disclose the claim’s financial value.

Funding came from the European Peace Facility

The funding for the approximately 70 million euro procurement linked to Datasel did not come from Estonian taxpayers, but from the European Peace Facility. The European-level funding is partly connected to money derived from frozen Russian assets.

Vaher said RKIK currently has about 200 procurement projects in progress, handled by approximately 80 people, including lawyers, project managers and technical specification writers. RKIK makes the contract decisions, and its director general signs the contracts.

“This means that RKIK is responsible for its activities,” Vaher said.

Asko Kivinuk, RKIK’s deputy director general for procurement, said the centre becomes involved in procurements during the planning and pricing stage. Infrastructure and procurement plans are prepared on the basis of the Defence Ministry’s development plan.