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Disarmed by red tape

Disarmed by red tape
The deployment of information technology in the three armed forces – army, navy and air force – might get a shot in the arm. By July this year, the ministry of defence (MoD) will revise its defence procurement manual, as it does every five years. A framework for procurement under the ministry’s revenue budget, it is expected to include a chapter on IT.

DPM and defence procurement prodedure (DPP, meant for procurement under the capital budget) have been missing IT-related provisions. This will shorten the processes and duration in the selection of vendors, which at present takes a whopping three to five years.

Defence procurement is divided in two categories: revenue, involving routine operations and salaries, and capital, involving asset creation. The former is guided by the DPM, revised in five years; the latter, guided by DPP, is revised annually.

For the guidelines to have a meaningful impact, the IT procurement clauses must be followed in both the revenue budget and the capital budget. Otherwise, existing procedures are likely to get complicated further. This is exactly what is not going to happen. A senior official with the ministry says the IT procurement-related clauses in the DPM 2014 will be mandatory for the revenue projects only. For capital projects, the changes will have to be introduced separately, which the the ministry is not even considering at present.

The movement of files among the deparments of the armed forces headquarters is infamous for inertia, slowing down further when the defence ministry comes into the picture. Several schemes, worth thousands of crores of rupees, to modernise the armed forces with the help of IT and communication tools are stuck. The decision to reform the IT procurement of only revenue projects is bound to limit efficacy of the reforms, say sources in the government and the industry.

The defence ministry has a different take. It sees the partial reform as a first step to ironing out the wrinkles that have dogged IT procurement in the three services for over two decades. The DPM’s IT chapter will have separate timelines and will fast-track the procurement process. ‘We are planning to notify the new DPM in another four to five months,’ says Shankar Aggarwal, additional secretary to the defence ministry. Given MoD’s lack of IT expertise, the ministry is considering setting up a programme management unit (PMU) to help expedite project implementation and the selection of vendors, Aggarwal says.

The management unit will include experts drawn from the industry, besides representatives from the ministry and the three armed forces. The unit will be framed along the lines of the National e-governance Division, set up by the department of electronics and IT to oversee the national e-governance plan. This will require the finance ministry’s approval, which is expected by the middle of this year, says Aggarwal.

‘These manuals were prepared to buy arms and ammunitions. They are not too conducive to procurements relating to IT, which involve services,’ says Aggarwal. He hopes that the new IT-related clauses will help in bring more clarity and expedite procurement.

The procurement of IT and communications is riddled with numerous snags. The classification of an IT project itself has been a nuisance; it is not easy to tell whether a project falls under revenue expenses or capital expenditures. The armed forces do not have a provision for a mission mode, which could fast-track the implementation of a project, says an army official.

This takes a heavy toll on industry which supplies the IT solutions and services; their payments are routinely delayed and decisions lack clarity. Industry associations have repeatedly urged the ministry to set up an empowered body with representatives from the three services and the MoD. The time for conceptualisation and selection of vendor, says a Tata Consultancy Services official, should happen in not more than 12 months, as software and hardware follow a shorter life cycle as compared to the four to five years the ministry takes to merely select a vendor.

The TCS official says that the armed services do not have a single project to benchmark speedy and successful rollout. The delay in issuing of ‘request for proposal’ and then the final selection of vendor makes the project a liability for the company because the system does not account for variations in the currency exchange market, which are critical to IT vendors. An official at the Confederation of Indian Industries (CII) says, in several meetings they have urged the ministry to review procedures and reduce in-house delays before the signing of the contract and in its execution. It has also demanded the ministry to prepare and share an integrated road map for ICT services for high value projects. As the defence services lack an integrated approach towards ICT projects, says Rama Vedashree of Nasscom, the three services should have their own overall IT roadmap for the sake of clarity and speedy operations. She suggests a shift in the selection procedure, which is at present L1T1 (lowest financial bidder past the technical round), to quality and cost-based selection (QCBS), which has been adopted for mega projects like Aadhaar.

The 2013 DPP on the MoD website gives a snapshot of the tangle that slows down IT procurement and projects. There are 17 steps related to approvals that must be followed in the selection process. This has to be done within 23 to 34 months. The file’s journey is ardous. First, it is sent to the service headquarters. From there, it is consigned to a policy committee, which then dumps it upon a committee with a name that promises delays: the service acquisition plan categorisation committee (SCAPCC). After it has cleared these obstacles, it must then submit itself to the defence acquisition council and, in special cases, to the defence minister’s scrutiny.

As soon as a project is outlined, the file begins this journey all over to be finalised. First-hand accounts cite projects that were in the works for four to five years before it was finalised. The project commenced thereafter.

By arrangement with Governance Now
Pratap Vikram

Pratap Vikram

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