Our acquisition philosophy is flawed
21 Jun 2012 3:20 AM GMT
Major General (retd) I S Chaturvedi served as Technical Manager (Land Systems), Acquisition Wing, Ministry of Defence from 2007-2009, where he was closely associated with formulation of Defence Procurement Policy – 2008. He talks about India’s defence modernisation, which is an area of concern in light of the problems in our defence acquisition policy, with S K Chatterji. Excerpts:
Of late there has been considerable debate about our defence preparedness with slippages in equipment induction and resultant slow modernisation being identified as cause for concern. What in your assessment is the overall state of affairs in these areas?
There is no reason to disagree with the persisting shortcomings and areas of concern that the Chief of the Army Staff (COAS) has pointed out in his confidential ‘leaked’ letter to the prime minister. There are two dimensions to the aspect of shortcomings. Firstly, deficiencies in the already introduced and sanctioned in-service stocks of various items like the Konkurs and Invar missiles. Secondly, replacement of obsolete/near obsolete/vintage equipment as also introduction of new type/family of equipment by induction of current state-of- art technology – what we normally refer to as modernisation. To the best of my knowledge, our shortcomings in night fighting capabilities, air defence, artillery modernisation, army aviation capabilities, capabilities of special forces and that of the infantry soldier need focussed and urgent attention.
The Defence Procurement Procedure (DPP) 2011 is now the basic document laying out the details of procedures to be followed for induction of equipment. Is the methodology outlined conducive to efficient functioning with timelines being shortened and chances of malpractices, taken care of?
Defence acquisition is a very complex issue. DPP is still evolving with inputs from various stake holders being factored in at each revision stage, the DPP 2011 being the current one. Given our legacies in defence acquisition, the emphasis in this evolutionary process have been on transparency, probity, maximum and fair competition for all vendors, whether Indian or foreign, and expeditious procurement. In my opinion, while the first three objectives are largely being met, the fourth one i.e. expeditious procurement leaves much to be desired. Beginning with a modest start, greater emphasis is being brought in with regard to enhancing indigenous manufacturing capabilities. Die hard critics of the procedure are often dismissive of the DPP.
While still being in an evolving stage, it has successfully brought to its near logical conclusion the ‘mother of all deals’ – Medium Multi-Role Combat Aircraft (MMRCA) acquisition of Indian Air Force (IAF) within a reasonable time frame with the Request for Proposal (RFP) having been issued sometime in mid 2008 under DPP 2008.
There appears to have been a very high degree of sincerity and commitment by all the stakeholders to abide by the DPP in this scheme providing enough strength to even withstand all types of international pressures exerted at the highest echelons.
Once the contract is signed, it will be a great tribute to this evolving procedure. But having said that, I think, no amount of refinement will take us close enough to a desired level of national military capability within a reasonable time.
Why do you say that?
To begin with, I think our entire acquisition philosophy is fundamentally flawed – it approaches defence acquisition in a manner one would approach one time purchase of fast moving consumer goods like televisions, refrigerators, washing machines and so on where one looks for lowest cost with maximum numbers of features available. One then tries to balance out the two in arriving at a decision. In acquisition of defence equipment, the fundamental issue is, whether it will match or be superior to the equipment it is likely to face in combat. Resorting to qualitative requirements (QR) formulation etc. really acquires significance when an equipment is planned to be developed. In a situation like ours where we are more or less compelled to source the equipment from foreign vendors, we have to select from what is available in the world market. Since we are also in dire need of technology acquisition, transfer of technology has to be a key consideration. There are only two sources of technology in the world in this field with major emphasis on research and development – the US and Russia – with Europe being a limited independent source.
Historically, we have seldom encountered such inordinate delays in our acquisitions and modernisation quest when we had only one source for acquisition, as we face today. Look at our acquisitions of MiG series of aircrafts, MI series of helicopters, T series of tanks, various surface to air missiles, Mirage 2000, various naval crafts including the submarines and aircraft carriers. They were all acquired without being subjected to QR scrutiny and competitive trials. Perhaps, the only consideration that took centrestage with the services and other decision makers was whether they could outclass the equipment possessed by our likely adversaries. Even our formidable T – 90 tanks, inducted during ‘Operation Parakram’, fall in this category. All these have been major decisions without being weighed down by QR compliance and L1 quotes. These decisions have gone well for the country. Even now, most of the equipment we have sourced from the US is based on this philosophy. The scandals start the moment competitive bid-ding kicks in – look at acquisition schemes of Jaguars, HDW submarines and Bofors – the process becomes vulnerable to delays and corruption at various levels.
The existing agencies do not seem to be able handle the complexity of the issues concerned. Do you think the National Security Council (NSC) could possibly be a lead player in strategising acquisitions?
I think in a matter of such major strategic significance – defence acquisition philosophy – National Security Council must play a guiding role. In the words of the doyen of Indian strategic thinkers, late K Subrahmanyam devising ways and means to expediting our arms acquisition with minimum vulnerability to corruption is a matter of national security strategy of highest priority and has to be handled by the NSC. It should issue directives to the ministry on the broad framework of a strategy to acquire modern defence equipment and up-to-date defence technology and associated strategic partnerships with leading military powers.
But you just spoke about the DPP in a positive light. Isn’t there a contradiction here ?
No. There is no contradiction. I speak positively of the DPP in the context of a ‘FMCG syndrome’ driven acquisition philosophy already having been adopted by us. Within that adopted philosophy DPP, I think is a good and workable instrument provided all the stake holders display a uniformly high level of sincerity and commitment as is visible in the case of MMRCA deal of the IAF.
Of late there has been considerable debate about our defence preparedness with slippages in equipment induction and resultant slow modernisation being identified as cause for concern. What in your assessment is the overall state of affairs in these areas?
There is no reason to disagree with the persisting shortcomings and areas of concern that the Chief of the Army Staff (COAS) has pointed out in his confidential ‘leaked’ letter to the prime minister. There are two dimensions to the aspect of shortcomings. Firstly, deficiencies in the already introduced and sanctioned in-service stocks of various items like the Konkurs and Invar missiles. Secondly, replacement of obsolete/near obsolete/vintage equipment as also introduction of new type/family of equipment by induction of current state-of- art technology – what we normally refer to as modernisation. To the best of my knowledge, our shortcomings in night fighting capabilities, air defence, artillery modernisation, army aviation capabilities, capabilities of special forces and that of the infantry soldier need focussed and urgent attention.
The Defence Procurement Procedure (DPP) 2011 is now the basic document laying out the details of procedures to be followed for induction of equipment. Is the methodology outlined conducive to efficient functioning with timelines being shortened and chances of malpractices, taken care of?
Defence acquisition is a very complex issue. DPP is still evolving with inputs from various stake holders being factored in at each revision stage, the DPP 2011 being the current one. Given our legacies in defence acquisition, the emphasis in this evolutionary process have been on transparency, probity, maximum and fair competition for all vendors, whether Indian or foreign, and expeditious procurement. In my opinion, while the first three objectives are largely being met, the fourth one i.e. expeditious procurement leaves much to be desired. Beginning with a modest start, greater emphasis is being brought in with regard to enhancing indigenous manufacturing capabilities. Die hard critics of the procedure are often dismissive of the DPP.
While still being in an evolving stage, it has successfully brought to its near logical conclusion the ‘mother of all deals’ – Medium Multi-Role Combat Aircraft (MMRCA) acquisition of Indian Air Force (IAF) within a reasonable time frame with the Request for Proposal (RFP) having been issued sometime in mid 2008 under DPP 2008.
There appears to have been a very high degree of sincerity and commitment by all the stakeholders to abide by the DPP in this scheme providing enough strength to even withstand all types of international pressures exerted at the highest echelons.
Once the contract is signed, it will be a great tribute to this evolving procedure. But having said that, I think, no amount of refinement will take us close enough to a desired level of national military capability within a reasonable time.
Why do you say that?
To begin with, I think our entire acquisition philosophy is fundamentally flawed – it approaches defence acquisition in a manner one would approach one time purchase of fast moving consumer goods like televisions, refrigerators, washing machines and so on where one looks for lowest cost with maximum numbers of features available. One then tries to balance out the two in arriving at a decision. In acquisition of defence equipment, the fundamental issue is, whether it will match or be superior to the equipment it is likely to face in combat. Resorting to qualitative requirements (QR) formulation etc. really acquires significance when an equipment is planned to be developed. In a situation like ours where we are more or less compelled to source the equipment from foreign vendors, we have to select from what is available in the world market. Since we are also in dire need of technology acquisition, transfer of technology has to be a key consideration. There are only two sources of technology in the world in this field with major emphasis on research and development – the US and Russia – with Europe being a limited independent source.
Historically, we have seldom encountered such inordinate delays in our acquisitions and modernisation quest when we had only one source for acquisition, as we face today. Look at our acquisitions of MiG series of aircrafts, MI series of helicopters, T series of tanks, various surface to air missiles, Mirage 2000, various naval crafts including the submarines and aircraft carriers. They were all acquired without being subjected to QR scrutiny and competitive trials. Perhaps, the only consideration that took centrestage with the services and other decision makers was whether they could outclass the equipment possessed by our likely adversaries. Even our formidable T – 90 tanks, inducted during ‘Operation Parakram’, fall in this category. All these have been major decisions without being weighed down by QR compliance and L1 quotes. These decisions have gone well for the country. Even now, most of the equipment we have sourced from the US is based on this philosophy. The scandals start the moment competitive bid-ding kicks in – look at acquisition schemes of Jaguars, HDW submarines and Bofors – the process becomes vulnerable to delays and corruption at various levels.
The existing agencies do not seem to be able handle the complexity of the issues concerned. Do you think the National Security Council (NSC) could possibly be a lead player in strategising acquisitions?
I think in a matter of such major strategic significance – defence acquisition philosophy – National Security Council must play a guiding role. In the words of the doyen of Indian strategic thinkers, late K Subrahmanyam devising ways and means to expediting our arms acquisition with minimum vulnerability to corruption is a matter of national security strategy of highest priority and has to be handled by the NSC. It should issue directives to the ministry on the broad framework of a strategy to acquire modern defence equipment and up-to-date defence technology and associated strategic partnerships with leading military powers.
But you just spoke about the DPP in a positive light. Isn’t there a contradiction here ?
No. There is no contradiction. I speak positively of the DPP in the context of a ‘FMCG syndrome’ driven acquisition philosophy already having been adopted by us. Within that adopted philosophy DPP, I think is a good and workable instrument provided all the stake holders display a uniformly high level of sincerity and commitment as is visible in the case of MMRCA deal of the IAF.
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