Defence acquisition is no supermarket purchase

Defence acquisition is no supermarket purchase, say former Secretaries

Dr Vijayalakshmy K Gupta Shobhana Joshi Gargi Kaul

Defence procurement is a complex process involving multiple agencies, multiple requirements and elaborate procedures. This process often consumes a significant amount of time and leads to cumulative capability deficiencies and cost escalation. In addition, acquisitions are prioritised on the basis of operational requirements and budgetary constraints. Several examples could be cited to illustrate this situation, including India’s prestigious Light Combat Aircraft project Tejas, indigenous aircraft carrier, IAF fighter replacement, among many others.

SAILORS & WARRIORS spoke to three distinguished and highly accomplished personalities who earlier occupied the crucial post of Secretary, Defence Finance, to seek their views on this matter of prime national importance. Dr Vijayalakshmy Gupta (VKG), Ms Shobhana Joshi (SJ) and and Ms Gargi Kaul (GK) explain the scenario and offer their perspectives on the procurement process.

India’s defence procurement is often in the news for the wrong reasons, mainly related to the long delays involved in the process. Moreover, delay in procurement from foreign manufacturers leads to cost escalation. As a person having a deep knowledge as well as experience on the matter, could you explain why procurement is such a time-consuming affair?

VKG

The first issue which needs to be understood is that defence acquisition is distinct from buying off-theshelf products from the market. As it concerns national security, the end use is an important aspect. It is imperative to check how various parameters stack up against the known adversaries and meet the tactical requirements. So, these factors definitely add to the timeline.

SJ

Another important aspect is that defence acquisition actually promotes modernisation and therefore highend and futuristic technology is an important component. Many vendors are known to overstate their capabilities and therefore the technology offered has to be assessed and consequently the technical evaluation and trials tend to take a long time.

GK

An important point to note is that development of weapons and systems under ‘Make’ category will in anyway have a long gestation period because any new technology development has a certain time cycle and the platform has to be proven through robust trial and testing. Incidentally, even in developed countries development and productionizing of new systems is a long-drawn process.

What are your suggestions to speed up the procurement process?

VKG

The introduction of different categories in Defence Procurement Procedure was done precisely for the purpose of allowing the Services a faster route to procure what was needed in a faster timeframe through ‘Buy’ and ‘Buy and Make’ route. Unfortunately, over time, this distinction got blurred and more categories added but that has not helped in speeding up the process.

SJ

In a bid to leverage high-value

procurements to bring in high technology and help the domestic industry, offsets were introduced in Defence acquisition in 2005. However, offsets also added to the time required to process cases with no visible advantage to the buyer. The offset clause has now been removed from certain categories and should make a difference to the timeline.

GK

The pipeline of procurement cases at any given point of time includes a substantial cushion to cater for delays or closure of cases in the process. Therefore, it is essential to prioritize cases so that those high on the list can be fast-tracked and finalised. This will ensure movement and finalisation of critical equipment.

The Government of India recently announced the Defence Procurement Procedure (DPP) 2020, now renamed as Defence Acquisition Procedure (DAP) and other decisions on acquisitions. What are your views on these proposals?

VKG

The first DPP was issued in 2002 as part of a package of measures to implement the recommendations of a Group of Ministers to reform the national security system. The document has evolved through several iterations over 18 years. In the initial years, the reviews took place quite frequently, but now that it has matured, such frequent reviews are not warranted. A periodic review every five years is adequate and will allow stability in the system.

SJ

I would like to add that the DPP has over the years also achieved in setting a framework for defence acquisition which include the longterm, medium-term and short-term perspectives. A linkage between the planning process and acquisition was established which was missing in the earlier regime. The DAP 2020 continues with this philosophy but with some modulation in that the 15-year LongTerm Integrated Perspective Plan (LTIPP) has been replaced by a 10-year Integrated Capability Development Plan.

GK

Given the prevailing situation on ground and forecasts for the future, urgent fast-track procurement of force multipliers such as UAVs, Electro-Optics and modern small arms needs to be fully supported. Much of these equipment can be easily sourced from Indian manufacturers on competitive prices in line with the call for Atma Nirbhar Raksha Utpadan as per the DAP 2020.

DAP has introduced a new chapter on procurement of ICT systems which will prove useful for requirements in the cyber domain including electronic warfare and communication systems. Leasing of equipment is another new category which can be fully leveraged to achieve force modernisation and overcome obsolescence challenges at lower costs. A separate chapter on Post Contract Management will also provide better clarity to all stakeholders.

Currently, the domestic procurement in the defence sector amounts to around Rs 70,000 crore which the Government is planning to double by 2025. However, some experts point out that without adequate funding and a bigger involvement of the private industry, the target would be difficult to achieve. What is your reaction?

VKG

India has always been a country which gives great importance to maintaining an indigenous domestic industrial base for the Defence sector. No doubt in the initial years, being a strategic sector, greater primacy was given to the public sector but in recent years private sector has been encouraged to participate and together they should be up for the challenge.

SJ

The statement signals a specific intent on the part of the Indian government to give an opportunity to the domestic industry. The negative list of 101 weapons and equipment which have been banned for import over next seven years reinforces this intent with specific systems and platforms now reserved for domestic manufacture.

GK

There is no doubt that domestic defence production has a cost and in the initial years the equipment manufactured in the country will be more expensive. But that is a short-term view which is offset by creation of employment opportunities in the country and reduction in lifecycle cost with spares manufactured by domestic industry.