The report of CAG Audit into Capital Acquisition in Indian Air Force was tabled in the Parliament today 13th February 2019. The Audit examined 11 contracts of capital acquisition signed between 2012-13 and 2017-18 with a total value of approximately INR 95,000 Crores. Volume II of the report pertains to the procurement process of 36 MMRCA through an Inter-Governmental Agreement with the Government of France.
The CAG Report Executive Summary holds a few gems, often repeated by this author in many previous writings pertaining to our defence procurement process. Those who have the stomach for the full CAG report can read it at leisure. For others, I will attempt to put few underlying issues on the table, flagging relevant extracts of the CAG report.
The first step for any capital acquisition programme is framing of staff requirements (SRs). This is also the first step where we often falter. And the services need no help from bureaucrats or ministers in this department. Despite elaborate guidelines that prescribe broad-based SRs to ensure maximum participation and wider choices, we continue to write SRs that finally become epitaphs on the tombstone of dead cases. CAG has hit the bull’s eye with this statement in the summary:
IAF should improve its process of formulation of ASQRs to ensure that they correctly reflect the users functional parameters. Exhaustive ASQRs with detailed technical or design specifications should be avoided, unless they are functionally necessary.
This is equally applicable to all services. Having toiled in the monkey-infested corridors of IHQ MoD (Navy), I can attest that this malaise cuts across services. Every case is shaped by a long chain of big and small decisions. There is unrelenting pressure to ‘push’ cases. Wide capability gaps exist and the system has become such that nothing, repeat nothing, happens without ‘file-chasing’ and ‘approval-seeking’ through multi-layered mechanisms in MoD that have full authority but zero accountability. Officers holding key desks have to move on posting and often the baton slips. Some succumb to fatalistic ‘there’s no point’ attitude while some reel under hubris and professional arrogance. Yet when you look back at the trail of unsuccessful RFPs, no single person or entity can be named. What lessons have we learnt?.
Involvement of Professionals
Sadly, even as indigenous programs take to the skies, India continues to be one of the biggest importers of defence hardware. Capital acquisition and developmental projects are two different things, requiring different skill sets and attitude. Developmental projects have a certain learning curve. Often mid-course corrections may be called-in and lessons ploughed back to improve the product. There is room to stop, review and revive.
Capital acquisition on the other hand is a veritable minefield, full of cul de sacs, policy changes, potential for corruption, lobbying and many such devils. Hence the need to enlist the support of subject matter experts other than those in uniform so that we don’t walk into traps blindly. The CAG has duly noted this point and it begs a substantial answer from the mandarins in MoD.
The services have for the longest time defended their ‘Whitehall Filing System’ as being the epitome of debate and consensus. Well, if that isn’t working, something needs to change. It has come to place too much reliance on idiosyncrasies and pet peeves. It also loads our officers in uniform with too much responsibility and too little authority. If IHQ was SpaceX and Raksha Mantri was Elon Musk, what would we have done differently? Think about it.
For instance, how can a Joint Director-level officer chasing a case at CNC stage stand up to a foreign OEM and their battery of contract / legal experts while simultaneously firefighting umpteen other cases at various other stages? One mistake and poof! it’s back to square one.
Read the CAG’s observation very carefully:
In the process of acquisition, involvement of academic experts, in relevant fields, such as aerospace engineering is advisable in the view of the fact that latest and most complex technologies, evolving rapidly, are being used in almost all defence systems and weapons. It would be impractical to expect that in service officers, doing full time jobs, can keep up with the rapid development to the extent that academicians, devoted to that subject, might.
Think of the MMRCA as an empty flat rather than a fully-serviced apartment. Every platform – warship, helicopter or fifth-generation fighter – will need to be equipped with multitude sub & sub-sub systems dictated by the service or some joint service requirement. Some of these could be customer-furnished, some customer-nominated. No aircraft manufacturer makes engines, avionics, sensors or weapons that adorns the final rollout. Hundreds of sub-contractors and thousands of vendors are involved, with each of whom the aircraft supplier has to negotiate price and sign sub-contracts.
Then there is DRDO, HAL, BEL and other PSUs who want their products also up on the Christmas tree (and why not?). Pricing is at best nebulous. Indian labour is cheap; so is our time and penchant for U-turns. Yet a multiplication factor of 2.7 was applied to HAL manhours versus Dassault Aviation’s French manhours. How many such metaphoric ‘improvised explosive devices’ are hidden in contracts, nobody can completely fathom. It is so easy to nitpick these details and make a ‘scam’ out of it in hindsight.
While the military is entitled to their ‘country-specific’ mods, some balance has to be drawn between science and science fiction. That’s another area where, as CAG notes, subject matter experts and academicians can come in. Also, in our present scheme of things, great is the enemy of good. Do we want a basic capability that can be upscaled / upgraded and comes on time, or do we want the perfect dream machine that is stupidly expensive, impossible to get within timelines, with a potential scam-value to boot? You decide.
I am afraid I do not have experience of handling bureaucrats and ministers. But with my limited experience of having partaken in staff duties and field trials, this much I can vouch for. The shenanigans of South & North Blocks come much later in the game. Most of the crucial work, viz. laying down SRs, drafting RFPs, conducting technical evaluation, field trials and reporting on each of these, is very much under the control of individual service. Except for an odd case like the VVIP helicopter, where MHA/SPG/PMO etc may have to be consulted for specific reasons, there is ample room for free & fair, honest-to-god groundwork by service officials. Let us get that right before laying the blame elsewhere. Bureaucrats and politicians have many skills; deep understanding of military hardware and specifications is not one of them. If the services do not complete their homework, some minister or babu will surely run away with your assignment. Then whom should we blame?
Stop the Scam Mongering
This one is for our leaders. Social media is afire with Rafale and such other scam-mongering. If there is any mischief that has been played by any party, it must be investigated and set right. But politicising each and every defence acquisition for narrow political ends will seriously erode our military preparedness. PM Modi will do well to take the mike and address the nation on this issue. If opposition leaders routinely cry scam and make private participation in defence sound like entry of women in Sabarimala, our aviation industry will remain celibate. One must not forget that during UPA’s 10-year watch, then defence minister AK Antony sat like a Buddha through thousands of meetings that ultimately got the armed forces only the mirage of an MMRCA. Blame must be shared.
Lastly, a word about the CAG itself. Is there a single acquisition project, arm or service that has escaped the CAG’s circumspection? Are we living in a perfect world full of perfect people? Anybody can be put under a scanner and made to look foolish. That doesn’t get us helicopters or fighters.
Good intent must be differentiated from bad intent. But in today’s surcharged and vitiated atmosphere, even a honest man’s enthusiasm or initiative can be given a political hue. It is a grave mistake to galvanize military leaders into this or the other party (pro-BJP / pro-Congress etc). Those veterans taking political positions on such matters are thus doing grave disservice to the uniform they wore and troops they commanded.
Remember, it is our armed forces that will ultimately win this race to the bottom.
©KP Sanjeev Kumar, 2019. All rights reserved. I can be reached at email@example.com. Views are personal. Cover photo courtesy AFP.
This story was republished by The Quint on 14 Feb 19. Read it here.