Israeli Defense Ministry CEO Seeks to Regulate Fierce Competition Among Domestic Arms Firms
The historic defense deal between Israel and Greece highlights the strong global demand for Israeli-made military systems, which has intensified head-to-head competition between two major local defense companies under tough conditions. A notable example is the 2023 Finnish air defense tender, where Rafael and Israel Aerospace Industries (IAI) competed directly, with Rafael ultimately winning a contract worth approximately 317 million euros for the David's Sling system.
Amid this escalating rivalry, Amir Baram, CEO of the Israeli Ministry of Defense and a retired general, has taken steps to impose order on the internal competition. According to data from the Defense Export Administration, Israeli defense exports reached a record $19.2 billion last year, with about $10 billion stemming from government-to-government deals and the remaining $9.2 billion from direct company business without ministry involvement. This marks a significant increase from $9.3 billion total exports in 2020.
In response to this growth and intensifying competition, Baram recently issued an ethical code to defense companies aimed at regulating competitive conduct. The code acknowledges that business competition drives growth but insists it must be conducted with fairness, professional integrity, and national responsibility. It emphasizes the utmost importance of safeguarding state secrets and intellectual property, forbidding the misuse of insider information for unfair advantage.
The code also calls for fairness and prohibits defamation among companies. It stresses the need for accurate representation of technological maturity, warning that marketing unready capabilities as operational could damage Israel’s national credibility with international clients. The initiative is partly motivated by personal tensions between key industry figures, such as Boaz Levy, chairman of IAI, and Yoav Turgeman, CEO of Rafael, who share a complicated professional history.
This is not the first time the Defense Ministry has sought to regulate fair competition. In 2010, then-CEO Udi Shani intervened to prevent contract cancellation with Elbit Systems in Colombia after allegations surfaced about the tender process, which were traced back to IAI, the losing bidder. The ministry continues to promote ethical conduct to maintain Israel’s defense industry reputation worldwide.
