Review Defence Procurement Procedure

The process of procurement of urgently required military hardware including weapon systems and combat aircraft as laid down by the DPP, certainly needs a fresh look

Issue: 4 / 2019By Air Marshal B.K. Pandey (Retd)Illustration(s): By Anoop Kamath

The exercise to induct 126 medium multi-role combat aircraft (MMRCA) through a global tender, to retain the operational status of the combat fleet of the Indian Air Force (IAF), had been initiated in the year 2000. As the sizeable fleet of MiG-21 aircraft whose induction had begun in the mid 1960s, was scheduled to be phased out within a decade or so, the need to procure its replacement was indeed urgent. Unfortunately, despite the debilitating erosion in the operational capability of the IAF owing to the rapid depletion in the strength of the combat fleet and the implications of delay in procurement for national security, the attempt to procure the 126 MMRCA through the Defence Procurement Procedure (DPP), turned out to be a failed mission eight years after the tender was floated and 15 years since the move was initiated. The NDA government headed by Prime Minister Narendra Modi, on a desperate appeal by the IAF, then opted for emergency procurement of 36 Rafale jets through a government-to-government (G-to-G) deal. Delivery of the 36 Rafale jets is expected to commence in September this year and is scheduled to be completed by September 2022. The ongoing political slugfest over this deal notwithstanding, the IAF is optimistic about induction of the Rafale jets on schedule, providing it at least partial relief.

The experience of the IAF in the aborted MMRCA tender, brings into focus the choice between the two options for procurement i.e. through the DPP of the G-to-G route. Since the mid 1960s in the days of the bi-polar world, the nation was tethered to the then Soviet Union and later to Russia for the procurement of military hardware through the G-to-G route. The last major procurement under this option was that of the fleet of 272 Su-30 MKI air superiority fighters selected by the IAF and concluded in two batches, the first in 1996 and the second in 2000, directly with the original equipment manufacturer (OEM) without going in for a global tender. With the end of the bi-polar world and with the intention to give the Indian Armed Forces a wider range of weapons systems and OEMs across the world to choose from as also to ensure probity and transparency in the procurement process, the government instituted a Defence Procurement Policy under which was promulgated a Defence Procurement Procedure (DPP).

However, the experience of the IAF to procure a large fleet of fourth-generation combat platform to restore its operational edge over the adversaries through the MMRCA tender floated in conformity with the DPP, has not been very inspiring. In fact, the experience has shattered the confidence of the IAF in the DPP. Given the frustrating experience with the failed MMRCA tender, the IAF is bound to be gripped with serious apprehensions about the chances of success of the tender for 114 MMRCA that is expected to be floated in the near future. Seven global aerospace majors have already responded on July 7, 2018 with their initial inputs about the platform each of the companies has to offer against the Request for Information (RFI) floated on April 6, 2018. The question that plagues the mind of many both in and outside the IAF, is whether the DPP in its present form, is at all structured to facilitate speedy acquisition of urgently needed military hardware for the Indian Armed Forces and in turn is conducive to the preservation of national security.

Responses from a total of seven global aerospace and defence majors have been received against the RFI for 114 MMRCA for the IAF. Six of these companies had participated in the now cancelled tender for the MMRCA floated in August 2007. These companies have now offered updated and upgraded versions of the platforms that have already been evaluated by the IAF. The seventh firm that has joined the race for the new contract is Sukhoi of United Aircraft Corporation of Russia with their offer of the Su-35 Flanker-E which is an improvement on the Su-30 MKI. The major concern that looms large over this fresh tender dubbed as MMRCA 2.0, is whether this will also go the way of the previous tender. The disastrous impact of this possibility on national security needs no elaboration.

From the preceding discussion it should be evident that the process of procurement of urgently required military hardware including weapon systems and combat aircraft as laid down by the DPP, certainly needs a fresh look. While probity and transparency in any deal related to procurement of military hardware for the Indian Armed Forces are undoubtedly important, these considerations must not be allowed to impede or obstruct the procurement of military hardware whose requirement is critical to preventing any compromise to national security. It is in this context that the alternative process of procurement of military hardware through the G-to-G route assumes greater relevance. Unless under the prevailing circumstances, the G-to-G route is followed for the procurement of 114 combat platforms selected by the IAF, the service will in all probability, continue to remain deprived of the capability to effectively contribute to the maintenance of national security.