If the Industrial Co-operation Contract is breached

If a foreign supplier does not fulfil their obligation for industrial co-operation it can lead to penalties and blacklisting. 

  • Updated 12. October 2023

Penalties for acquisition contracts 

For Industrial Co-operation Contracts in relation to an acquisition contract with the Danish Defence Acquisition and Logistics Organisation, a milestone for 50 and 100 per cent fulfilment of the obligation is set.

If the foreign supplier does not reach the milestones, the supplier must pay a penalty. The penalty equals 15 % of the difference between the value of the approved fulfilment activities and the value of the milestone. 

Penalties for framework contracts 

For framework contracts with the Danish Defence Acquisition and Logistics Organisation, the contract value can be updated throughout the duration of the contract. Hence, it is not possible to set a milestone for 20 per cent fulfilment. Therefore, the penalty in connection with an Industrial Co-operation Contract in relation to a framework contract is linked to the time of the conclusion of the Industrial Co-operation contract. 

The penalty is set as 20 per cent of the amount, which has not been fulfilled three years after the termination of the framework contract with the Ministry of Defence.

Blacklisting of foreign suppliers

If the foreign supplier fails to fulfil their obligation, the Danish Business Authority can blacklist the foreign supplier as specified by the Industrial Co-operation Contract. That means that the foreign supplier cannot enter new contracts with the Danish Ministry of Defence Acquisition and Logistics Organisation. 

If the foreign supplier fulfils their outstanding obligation later, the Danish Business Authority can lift the blacklisting.