CAG points to flaws in defence procurement
The Comptroller and Auditor General of India (CAG) report on 11 purchases by the Indian Air Force (IAF) is in the news for what it says about the Rafale deal, but pertinently, it has highlighted several issues in the procurement process followed by India to buy weapons and systems including heavy-lift helicopters, attack choppers and trainer aircraft, and asked the government to change the process to cut delays and keep the military operationally ready.
The audit of a deal for radars highlights how defence acquisition is beset with delays. The report found that IAF took 96 months to buy 11 Doppler weather radars in contrast to the Indian Meteorological Department, which made the same purchase in just 11 months.
In a 141-page report tabled in Parliament on Wednesday, the CAG said the IAF’s qualitative requirements for heavy-lift helicopters were aligned to the features of US defence firm Boeing’s CH-47F Chinook choppers.
The Chinook edged out Russian firm Rostvertol’s Mi-26 helicopters to win the $1.18 billion deal for 15 choppers. IAF has been operating Mi-26 choppers since 1987.
“The max payload capacity was reduced to 11,000 kg as against the 20,000 kg of Mi-26 helicopters. Seating capacity was also reduced to 45 troops as against the 82 troops of Mi-26s. The max under slung load was reduced to 10,000 kg as against 20,000 kg of Mi-26. The revised ASQR parameters matched those of Chinook helicopter,” the report said.
Air Staff Quality Requirements (ASQRs) are the specifications put out by the air force for the equipment it needs.
On the Chinook purchase, the defence ministry said broad ASQRs were necessary for multi-vendor bids, a contention rejected by the auditor. CAG said contrary to the ministry’s claim, the ASQR did not broaden the competition. The request for proposal was issued to six foreign military contractors in May 2009, but only two responded. India ordered 15 Chinook helicopters in September 2015, of which four arrived this week.
CAG also found that ASQRs were revised five times between 2006 and 2009 based on what vendors had to offer rather than what IAF really needed. The requirement for chaff and flares — defensive countermeasures deployed by military aircraft — was missing in the May 2009 RFP, which was amended in September 2009.
“This highlights the lack of professionalism in fixing ASQRs in the defence acquisition process,” the report said. CAG highlighted delays at different stages of acquisition including contract negotiation and approval by the competent financial authority (CFA).
“While the contract negotiating committee took a considerable period of 27 months as against one-and-a-half months prescribed in DPP-2008 (Defence Procurement Procedure), it achieved a price reduction of 2.17%,” the audit found. Also, CFA approval took 10 months instead of the prescribed four.
Unrealistic benchmarking of costs, delays in price evaluation, incorrect framing of ASQRs and poor post-contract management are the common thread of several air force acquisitions in recent years, CAG found.
Scrutinising the $ 1.1-billion Apache helicopter deal inked with Boeing in September 2015, CAG said that ASQRs were changed based on the advice of the US firm.
“While revising the ASQRs in 2009, IAF deleted three parameters and diluted one operational parameter based on the suo moto suggestion of Boeing though AgustaWestland was able to meet those parameters,” the report said. The ministry, however, said that the parameters were modified based on information from different sources and not merely one company.
The report said preparing ASQRs with inputs from a few vendors posed the risk of aligning the parameters to their platforms. “The ASQR parameters which could not be met were changed/deleted and fresh tendering was done. If these parameters were not needed and they should not have been included in the first place,” the CAG said.
It found that the defence ministry also bought missiles that were past their shelf life as part of the same deal. It said the US government was supplying missiles whose normal life of 10 years had expired and the ones to be fitted on the attack helicopters would be 14 to 16 years old at the time of delivery.
The report revealed that a simulator for C-130J pilots was installed in December 2012 but training began on it only in November 2016 due to a pending usage rate contract with Lockheed Martin. CAG said according to an IAF probe report, one of the reasons for the March 2014 C-130J crash was “inadequate experience and training” of the crew. The five-man crew was killed in that crash near Gwalior.
CAG’s observations are based on the fact that personnel involved in acquisition, whether in the ministry or the services, have not undergone defence acquisition training, said Air Vice-Marshal Manmohan Bahadur (retd), additional director general, Centre for Air Power Studies.
“In all advanced countries, such training is mandatory. The US, for instance, has a defence acquisition university that trains people involved in the procurement cycle. Without doubt, we need to fix our procurement procedure,” Bahadur said. He added that service and operational matters should be left to the services.
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