Indonesia Acquisition Policy and

Technology Understanding
By: David Raja Marpaung S.Ip, M.Def

David Raja Marpaung.

Associate Lecture University of
Indonesia, also Indonesia Politic
and Defense Consultant. Email:
davidrajamarpaung@gmail.com
phone: +62 81219588360
Defence Framework

Indonesia Position Defence Component

Indonesia Area almost 8 Millions KM Square
Sea Area is 6 Millions KM Square TNI
Indonesia Consist of 17.504 Islands
Prime
Strategic Area Component
Citizen
Back Up Component
Natural Resources
Infrastructure

National Industry Support Component

Professional/Expert
Nation Guard
Others
David Raja Marpaung. Associate
Lecture University of Indonesia,
National Defence System

Security and Defence President Legislative

Council

Defence Framework Policy

Operational and Logistic Policy
Defence Development Policy MOD OGM

Military Strategy and Military

Operation Policy TNI Commander

Develop and Maintain Military

Capability
Military Operational Readiness Chief of Staff

David Raja Marpaung. Associate

Lecture University of Indonesia,
Scope of Defence Framework

Global

Regional

National

DefenceDavid
Procurement Policy
Raja Marpaung. Associate
Lecture University of Indonesia,
 Global Defence Budget

USA
RUSIA JAPAN
PDB : US$ 13.500 M PDB : US$ 1.670 M PDB: US$ 4.560 M
Defence : US$ 582 M
Defence: US$ 30 M Defence : US$ 41,1 M
(3,7 % PDB)
(1,6 % PDB) (0,9 % PDB)

RRC
INDIA PDB: US$ 2.620 M
PDB: US$ 839 M Defence: US$ 35,3 M
Defence: US$ 22.3 M (1,6 % PDB)
(2,6 % PDB)

(NATO minus AS & Canada)

PDB : US$ 10.200 M
Defence : US$ 188,5 M INDONESIA
AUSTRALIA
(1,4 % PDB) PDB: US$ 346 M PDB: US$ 749 M
Defence: US$ 2,6 M
Defence: US$ 15,1 M
(0,8 % PDB)
David Raja Marpaung. Associate (2 % PDB)
Lecture University of Indonesia,
Year 2006, source: White Papers Indonesia
 South East Asia Defence Budget

THAILAND
MYANMAR LAOS
PDB: US$ 207M PDB: US$ 75 M PDB: US$ 2,9 M
Defence: US$ 2,2M
Defence: US$ 6,2 M Defence: US$ 0,014 M
(1,9 % PDB)
(6 %PDB) (0,4 % PDB)

VIETNAM
MALAYSIA
PDB: US$ 61,1M
PDB: US$ 143 M
Defence: US$ 3,08 M Defence: US$ 3,4 M
(6,3 % PDB)
(2,2 % PDB)

SINGAPURA
PDB: US$ 132 M
Defence: US$ 10.05 M
(7,6 %PDB)

BRUNEI INDONESIA FILIPINA

PDB: US$ 6 M PDB: US$ 346 M PDB: US$ 118 M
Defence: US$ 0,36 M Defence: US$ 2,6 M Defence: US$ 0,9M
(6 % PDB) (0,8 % PDB) (1,1 % PDB)

David Raja Marpaung. Associate

Lecture University of Indonesia,
Year 2006, source: White Papers Indonesia
Defense Acquisition Policy

for
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br n
u m itio
ga l uis
Le Acq

David Raja Marpaung. Associate

Lecture University of Indonesia,
 Defense Procurement
Policy
 Law of National Budget

Presidential Decree(Keppres) 80/ 2003 about Government

Procurement of Goods and Services

Kepmenhan RI No PER/07/M/VII/2006
about The Procedures of Military Goods and Services
Procurement by Using Export Credit Facility in the Defense
Ministry and Military Area

Kepmenhan RI No PER/06/M/VII/2006 about The

Implementation of Military Goods and Services in the Defense
Ministry and Military Area
David Raja Marpaung.
Associate Lecture University of
 Law of National Budget
-> This law renew in every year and become financial
and operational reference for government institution or
department. defence budget

 Keppres 80/ 2003keppres 80-2003.pdf

-> Arranged goods and services procurement which
over than Rp 50 billion need agreement from Minister/
Military Commander/ Institution Leader/ Bank of
Indonesia Governor Institution/ Leader of BHMN/ BUMN
Administration

-> Regulate procurement system: election method,

demand method, evaluation method, and kind of
contract. David Raja Marpaung. Associate
Lecture University of Indonesia,
-> Issued as a national standard regulation
promoting basic principles of procurement:
transparency, open and fair competition,
efficiency (value for money), non-discrimination,
and accountability.

-> Prevent and detect fraudulent and corruption

in public procurement through integrity pact.

David Raja Marpaung. Associate

Lecture University of Indonesia,
 Kepmenhan RI No PER/07/M/VII/2006

-> regulates the supply of goods and services to

the Ministry of Defence and the TNI through the
export credit facility.

-> Procurement of weapons which more than Rp

50 billion use export credit facility

David Raja Marpaung. Associate

Lecture University of Indonesia,
 Kepmenhan RI No PER/06/M/VII/2006
-> Stressed that procurement of goods and services
through non export credit facility or use national budget
or pure rupiah

-> Defence Minister  more than Rp 50 billion

TNI Commander  more than Rp 50 billion
Chief of Organization Unit more than Rp 25 - 50
billion

David Raja Marpaung. Associate

Lecture University of Indonesia,
 User Procurement
Committee
Supplier +
Ministry of Defense Inter-ministerial
Team

Sign an integrity pact for eliminating corruption in

the procurement process
Enhance control system in order to provide effective
and efficient process and accountability.

David Raja Marpaung. Associate

Lecture University of Indonesia,
 Cases of Acquisition in Indonesian MOD

NO CONTRACT BUDGET STATE CASES OWNER REMARKS

1. Scorpion Tanks £159.984.607 Britain Mark up Army New
100 units
2. Battle Ship 39 USD 466 Germany Mark up Navy Ex –
units unefficien Germany
cy
3. Air Fighter USD 192,2 Rusian Avionik Air force New
Sukhoi
2 units
4. Mi-2 Helicopter US $ 11,176 Rusian Unclear Navy New
16 units Suplier

5. Mi-17 Helicopter USD 21,6 Jt Rusian Corruption Army New

4 units

David Raja Marpaung. Associate

Lecture University of Indonesia,
TECHNOLOGY AND DEFENCE ACQUISITION
Implication of New Technology:

weapon platform that big and clear  sensitive and high

cost
 Rise of utilizing small unit
 Rise of interest to no become target
 Warfare continue
 Needs of logistic will change
 Base and logistic support that big and permanen which not
protect become sensitive
 Increasing surprise attact
 Increasing requirement and programming total defence
 Increasing cost of military system
 Increasing capability of terrorism
David Raja Marpaung.
Associate Lecture University of
Influence Toward Unit In Operation

 DEPLOYMENT OF TROOPS
 MOVE
 COMMUNICATION
 HIDDEN
 ATTACK
 DEFENCE

David Raja Marpaung. Associate

Lecture University of Indonesia,
Technology Acquisition

• Planning
• Accurate information
• Selection criteria
• Structured process
• Vendor–client relation
• Top management support
• Communication
• Balanced team
• User involvement
• Use of consultant
David Raja Marpaung. Associate
• Clear goals and objectives.
Lecture University of Indonesia,
Technology Implementation

• Project Management
• Process redesign
• User training
• Technological
• infrastructure
• Change management
• Risk management.
• Top management support
• User involvement
• Use of consultant

David Raja Marpaung. Associate

Lecture University of Indonesia,
Future Joint Logistic Vision 2010
Joint logistics of the Indonesian national defence
force is an integrated actions of:
 Indonesia national defence HQs
 Government
 Ministry of Defence
 National Defence Industry
 Private Company

It’s aimed in the framework of strength

management and strength utilization program
of TNI David Raja Marpaung. Associate
Lecture University of Indonesia,
Strategic Investment
Priorities

 Affordability
 Dual Use
 Accelerated Transition
 A Strong Technology Base

David Raja Marpaung. Associate

Lecture University of Indonesia,
Acquisition Objectives
 Information Superiority
 Precision Force
 Combat Identification
 Joint Theater Missile Defense
 Military Operations in Urban Terrain
 Joint Readiness
 Joint Countermine
 Chemical/Biological Agent Detection
 Real-Time Logistics Control
 Counter proliferation

David Raja Marpaung. Associate

Lecture University of Indonesia,
 Future Integrated Equipment

Communication
Equipment

Radar/Censor

Mission
and
Objective
Central Commando David Raja Marpaung. Associate Operation Field
Lecture University of Indonesia,
Conclusion and Recommendation
• MoD and logistic staff is responsible for TNI
logistic, including the arrangement of planning,
material procurement, and other logistics
support required by service.
• The procurement must be linear with Indonesia
defence policy
• Indonesia procurement still dependence to
another country. There are still less support
from national strategic industry.

David Raja Marpaung. Associate

Lecture University of Indonesia,
• National defence industry and private company
assist TNI in material and special equipment
procurement
• Defence acquisition needs more budget
support to develop TNI capability.
• MoD need to develop new acquisition system
in order to reduce corruption and fraud.
• Joint logistic vision in 2010 is very important to
enhance the TNI capability in the future.

David Raja Marpaung. Associate

Lecture University of Indonesia,
References
Asian Defence Journal (various issues)
Armed Forces Journal International
Asian Military Review
Friedman, George, and Friedman, Meredith, The
Future of War (New York: Crown, 1996)
Ganesan, N, Bilateral Tensions Among the
ASEAN States (Singapore: Institute of
Southeast Asian Studies, 2000)
Indonesia White Papers 2008. Indonesia MOD,
Jakarta, 2008
David Raja Marpaung. Associate
Lecture University of Indonesia,
Indonesia Defence Strategy. Indonesia MOD,
Jakarta, 2008
Indonesia Defence Doctrine. Indonesia MOD,
Jakarta, 2008
Buletin Balitbang Dephan
Jakarta Post
www.kompas.com
www.detik.com
www.suaramerdeka.com
www.tempointeraktif.com

David Raja Marpaung. Associate

Lecture University of Indonesia,