Procurement procedure does not allow latest equipment for the services

Procurement procedure does not allow latest equipment for the services

Major General Mrinal Suman

As it is not possible for any nation to equip its military fully with the latest equipment, all militaries strive for a well-balanced equipment profile based on a mix of futuristic, contemporary and vintage technologies – a mix of 30:40:30 is  considered acceptable. It implies that 30 percent of equipment must always be based on the state of the art technologies to equip a military to gain ascendancy over its potential adversaries. Similarly, 30 percent equipment could be nearing obsolescence. With the passage of time equipment of latest category becomes contemporary and the contemporary equipment becomes obsolescent.

Modernisation of the armed forces entails induction of modern equipment at regular periodicity to ensure that the proportion of the latest equipment does not fall below the threshold of 30 percent. Therefore, modernisation has to be a regular and not a sporadic process. Unfortunately, India has never learnt the criticality of regular induction of modern equipment. Resultantly, most of the current inventory of the Indian armed forces consists of outdated equipment. Less than 15 percent equipment can be considered to be of the modern genre while over 85 percent is close to the end of its useful life.

The above state of affairs is a cause of major worry for all those who are associated with the national security concerns. At the current foot-dragging pace of modernisation, it is likely to take India over 15 years to bridge the existing gap. Disappointingly, instead of taking emergent steps to cover this huge deficit, India has formulated a procurement procedure that effectively denies latest technology to the services with the result that the deficit would continue to increase. Three aspects need to be highlighted here.

Formulation of Qualitative Requirements

Based on the envisaged operational exploitation of the equipment, the services spell out essential functional characteristics. These are translated into Services Qualitative Requirements (SQR) to lay down minimum performance attributes of the equipment being sought.

India’s Defence Procurement Procedure (DPP) stipulates that SQR should be of “contemporary technology widely available in the world/indigenous market”. Contemporary technology which is widely available in the world/indigenous market can neither be exclusive nor top-end. It implies that the services cannot seek cutting edge technology but will have to remain satisfied with second-rung technology which is commonly available. Perhaps no other nation lays down such restrictions which are so very detrimental to national interests.

More importantly, DPP lays down that in case a single vendor emerges SQR-compliant after paper evaluation of technical proposals, the whole case has to be retracted and fresh Request for Proposal (RFP) issued with reformulated SQR. Thus, the services are forced to pitch SQR at such base levels that multiple vendors can participate. Competition is certainly desirable but cannot be at the cost of denying latest equipment to the services.

The L1 Syndrome

DPP considers all vendors meeting SQR at par. Superior performance is of no consequence and earns no extra credit. Any equipment that meets SQR has to be acceptable to the services.  The services can neither indicate their preference nor can demand better performing equipment. The lowest bidder (L1) is selected for signing the contract.  

Performance is a function of level of technology incorporated and enhanced performance is achieved through technological advancements. High end technology will invariably be more expensive than a mediocre one and can never be L1. In the recent past, a major helicopter manufacturer declined to participate in the bidding process stating that it was unfair to pitch its state-of-the-art machine against ordinary helicopters. Thus, the current policy of equating all SQR-compliant vendors and buying the cheapest equipment effectively saddles the services with the commonplace technology.     

Procedural Delays Compound the Problem

In the case of major weapon systems, time lag between the formulation of SQR and signing of the contract varies between three to six years. Some proposals take up to 10 years to fructify. Thereafter, vendors take another two years to commence deliveries. Induction of the complete quantity may take up to eight to ten years. By the time the services receive the entire quantity, the erstwhile ‘contemporary technology’ gets close to becoming obsolescent.

All nations encourage their services to seek futuristic technologies which are close to getting productionised. This is to ensure that equipment retains its cutting edge at the time of induction. Although the Indian procurement procedure is far more sluggish and time consuming, the aspect of time lag is totally overlooked. SQR which are based on ‘widely available contemporary technology’ lose relevance by the time the services get the equipment. Thus, the services get forced to accept equipment which is at the end of its useful service life. In some cases, proposals for upgradation of the newly acquired equipment have to be initiated soon after their induction to keep them operationally effective.    

Conclusion

Understandably, the Government wants to generate competition. However, the solution does not lie in buying commonplace equipment. Depriving the latest technology to the services for the sake of promoting competition is not a very prudent policy. The solution lies in rectifying the current infirmities of the procurement procedure.

The system of procuring equipment on the basis of minimum performance parameters should be replaced by spelling out a performance range. The lower end of the range should indicate minimum inescapable performance standard and the upper end should specify maximum acceptable limit. Due credit should be accorded to better performing equipment through a well formulated system of assigning differential weightage to each parameter. The criteria should be included in RFP itself so that all vendors are aware of it at the very outset.

Importance of technology in warfare is well recognised. Service life of major weapon platforms extends up to 30 years. It is essential that equipment procured for induction is of the latest genre of technology so that it does not become obsolete prematurely. The current dispensation is loaded in favour of mediocre equipment and common-place technology. India must make its procurement procedure more responsive to the needs of the services as regards the need for cutting edge technology.