Chandigarh: The Ministry of Defence (MoD) is adept at resorting to the fabled Indian rope trick by frequently announcing approvals for the acquisition of new military equipment and force modernisation, via its periodic Defence Acquisition Council or DAC meetings, cleverly blurring the chasm between perception and reality.
But, little beknown to most, all that the DAC, headed presently by defence minister Rajnath Singh, does is to merely accord Acceptance of Necessity (AoN) to materiel procurements and defence-related projects; simply translated, it means that the concerned acquisition or programme has ‘in principal’ been accepted. Nothing more.
“The AoN is a mere formality, albeit one mandated by the MoD,” says Amit Cowshish, former defence ministry financial advisor on acquisitions. The real accident-prone adventurous journey begins thereafter, as the acquisition or project tender can fall through thereafter for innumerable
reasons, he adds.
In late 2019, the MoD informed Parliamentary Standing Committee on Defence (SCoD) that it had approved 218 AoNs worth Rs 4 trillion over the previous five years to promote domestic manufacturing, but did not provide further details. In response, industry officials said that over the years almost all these AoN approvals had lapsed, since no requests for approval (RfPs) or tender were subsequently issued for many.
Most people, however, assume on the basis of AoNs that the concerned equipment has either been acquired, or the project concluded, or at least nearing fruition, and the services modernising at a furious pace. But nothing could be further from reality, as it is only afterwards that the heavy lifting, spread over 11 complex stages begins, to complete the acquisition process, each one of which has the potential to interminably delay or derail the entire project.
A long and convoluted process of acquisition
Consequently, the entire procurement process can, and often does, take twice, or at times even three times, as long as 74 – 118 weeks mandated in the successive Defence Procurement manuals to complete after the AoN is granted. “A large proportion of AoNs routinely fade into oblivion, with just a handful being subsequently revived,” say a two-star Indian Army officer, declining to be identified. Securing AoNs, he adds, is no more than a “bureaucratic manoeuvre” by the MoD to show its intent. An AoNs validity is 6 – 12 months, depending on the category of procurement, and is subject to renewal if a request for proposal or RfP or tender has not been issued in the intervening period.
The MoD, for its part, too is disingenuous, doing little or nothing to dispel this myth of instant gratification with regard to AoNs. In fact, by its purposeful silence it appears to perpetuate the fable of military modernisation, when in reality the AoNs continue meandering through numerous military and civil departments, tangled in complex bureaucratic procedures. Over years, these processes have earned exasperating and legendary notoriety in the global arms bazaar for their convolution, rigidity and above all, inexplicability.
Even the run up to the AoN is not without hurdles and time-consuming obstacles, fabricated collectively over decades by the three services themselves. The services kickstart the acquisition processes by issuing either a domestic or global request for information (RfI) to elicit information required for formulating the eventual qualitative requirements (QRs) or specs for the concerned equipment or project. Though seemingly straightforward, this too takes an age, as in their bid to demonstrate diligence, service officers collate all available literature and information on the proposed kit, with the aim of including as many features as possible, irrespective of either their practicality or, at times, even their necessity in India’s operational environment.
The draft then travels up the chain of military command, gathering supplementary parameters; each officer concerned feels compelled to suggest additional accompaniments in an endeavour at displaying industry. The ball remains in play till the QRs are approved by the service-specific equipment policy committees, headed by the respective deputy or vice chiefs of staff after an inordinate amount of time.
A retired two-star army officer associated with such activity and also responsible for fashioning the MoD’s now diluted offset guidelines in 2005 say rarely were deletions ever made to QR specifications. In many instances, he avers, what eventually emerged was a ‘well-complied wish list of utopian dimensions’. The officer also confesses that poorly conceived, formulated, and drafted QRs have ended up creating confusion, resulting in the entire acquisition being either delayed or aborted, or in some cases even both.
Implausible quality controls delay the procurement
Several reports by successive parliamentary committees and the Comptroller and Auditor General too had castigated the withdrawal or termination of diverse tenders due to implausible QRs. Even late Defence Minister Manohar Parrikar had mocked the services at a public function in Delhi in 2015 for fashioning fanciful and implausible QRs which he claimed were based on ‘Marvel comic books’.
Once the QRs are finalised and the RfP based on them issued, technical evaluation of the responses by vendors follow by the concerned service. This is succeeded by field evaluation trials of the equipment on a ‘no cost no commitment basis’ in which rival sellers invariably end up spending vast sums to transport their equipment and personnel accompanying it to and within India, often to different locations, where the trials are executed by a multi-disciplinary team.
The six competitors, for instance, who fielded their platforms for the Indian Air Force’s (IAFs) requirement for 126 medium multi-role combat aircraft (MMRCA) in 2007-8 are believed to have spent upwards of $300 million each for trials across varied terrain lasting almost two years, during which the platforms were tested on some 600-odd operational parameters.
All equipment trials by the Indian military are lengthy, at times taking several years. This is especially so for the army that tests most of its kit like small arms and howitzers in assorted terrain and environments like the northern Punjab plains, western Rajasthan desert regions and in Himalayan heights in Kashmir and Ladakh.
Staff evaluation by the respective services comes next, after which, in select cases, the technical oversight committee presents its report to ensure that all equipment parameters are in consonance with the stipulated QRs. This too is arduous and can take long, as the scope for ‘subjective’ evaluation is vast, said industry officials. It also elicits a flurry of objections from rival contenders with complaints over ‘unduly favouring’ rival systems.
Once the equipment has cleared all these hurdles, a Contract Negotiation Committee or CNC is constituted to discuss the cost and delivery schedules, after which the proposal has to be approved by the ‘competent financial authority’, or CFA which, depending on its value could either be the respective service deputy or vice chiefs, the defence minister or the finance minister. All purchases exceeding Rs 3,000 crore, however, have to be cleared by the Cabinet Committee on Security or CCS headed by the prime minister. It’s only then that the contract is finally inked.
Nascent steps towards an overhaul
Meanwhile, the 681-page DAP-2020 magnum opus does in no manner simplify or render less cumbersome these arduous processes. It also completely ignores one of its own committees that submitted its report in early 2016 on fast-tracking procurements. This report had recommended the establishment of a semi-independent body to streamline and accelerate material procurements away from New Delhi’s security zone, where access to officials is tightly controlled.
It had advocated the establishment of a Defence Capability Acquisition Authority (DCAA) to manage all aspects of defence equipment procurement with around 900-members to work outside the MoD- but under its overarching control—in order to mitigate cumbersome and time-consuming procurement procedures, internecine rivalries and corruption scandals. Headed by Dr Pritam Singh, formerly of the Indian Institute of Management in Lucknow, the eight-member committee included serving and retired two and three-star service officers, financial and technical experts.
Over seven months the committee interacted with defence procurement officials from France, South Korea, the United Kingdom, and the US as well as the Indian military, the Headquarters Integrated Defence Staff and the Indian Coast Guard. Specialists from local think tanks, industry associations and the state-run Defence Research and Development Organisation (DRDO) too were consulted.
Its eventual and practical suggestions included dividing the DCAA into seven ‘vertical’ units dealing with land, air, maritime, science and technology, industrial collaborations, and commercial and legal issues. It has further stressed the importance of instituting integrated project management teams (IPMTs) for assorted programmes with strict financial and completion deadlines, in order to reduce dependency on imported materiel and to augment self-reliance or Atamnirbhar.
In short, the Authority was conceived as an independent body manned by a cadre of technical and military professionals with domain knowledge, as well as accountability and flexibility in augmenting India’s military capabilities. Most importantly, the DCAA was also projected to have overarching responsibility for formulating equipment QRs, issuing RfIs and RfPs overseeing trials, conducting price negotiations, and even managing offset obligations, but to no avail.
The MoD, it seems, remains determined to grossly underestimate its ignorance and to perpetuate its existing inefficiencies.