The performance audit report of the Comptroller and Auditor General of India on capital acquisition in the Indian Air Force pertaining to the purchase of 36 Rafale aircraft by the Indian government from the France government, was tabled at last in the Parliament on Wednesday. The executive summary of the report noted at the outset that the Rafale negotiation panel of the Ministry of Defence "failed" in estimating a benchmark for pricing, making it difficult for the CAG to establish "the reasonability of price".
The report came out in two volumes, with the first volume entirely devoted to discussing the systematic issues prevalent in the acquisition process, with the examples of 10 acquisition contracts.
In the second volume, the controversial pricing angle of the medium multi-role combat aircraft has been examined. The report, however, does not contain the actual prices. A press statement released by the office of the CAG said this was "based on the insistence of the Ministry of Defence citing the Indo-French Agreement of 2008 and the provisions of Inter Government Agreement (IGA)."
In the summary at the beginning of the report, it was noted that the defence ministry's Contract Negotiations Committee's failure to estimate a benchmark price also caused a delay in price evaluation and contract negotiations."The model used for calculating the life cycle cost of acquisitions had several deficiencies and needs to be fine-tuned and improved further," the report noted.
The audit report also asked questions on the efficacy of the Indian Air Force's Air Staff Qualitative Requirements (ASQRs) parameters in truly reflecting the users' functional need. It also pointed out the IAF's inability to delineate the requirements, something which impeded the whole process of procurement."IAF did not define the ASQRs properly.As a result none of the vendors could fully meet the ASQRs. ASQRs were changed repeatedly during the procurement process. This created difficulties during technical and price evaluation and affected the integrity of competitive tendering. It was also one of the main reasons for delays in acquisition process. The objectivity, equity and consistency of the technical evaluation process was not evident in the Technical Evaluation Report," the report noted.
The audit also noted that the vendor response to solicitation of offers was low, which restricted competition. The number of vendors who responded to the request for proposal (RFP) was far fewer than the number of vendors who were invited to bid.The acquisition process under which the IAF was functioning also saw delays at various stages, the report noted.
13/02/19 First Post
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The report came out in two volumes, with the first volume entirely devoted to discussing the systematic issues prevalent in the acquisition process, with the examples of 10 acquisition contracts.
In the second volume, the controversial pricing angle of the medium multi-role combat aircraft has been examined. The report, however, does not contain the actual prices. A press statement released by the office of the CAG said this was "based on the insistence of the Ministry of Defence citing the Indo-French Agreement of 2008 and the provisions of Inter Government Agreement (IGA)."
In the summary at the beginning of the report, it was noted that the defence ministry's Contract Negotiations Committee's failure to estimate a benchmark price also caused a delay in price evaluation and contract negotiations."The model used for calculating the life cycle cost of acquisitions had several deficiencies and needs to be fine-tuned and improved further," the report noted.
The audit report also asked questions on the efficacy of the Indian Air Force's Air Staff Qualitative Requirements (ASQRs) parameters in truly reflecting the users' functional need. It also pointed out the IAF's inability to delineate the requirements, something which impeded the whole process of procurement."IAF did not define the ASQRs properly.As a result none of the vendors could fully meet the ASQRs. ASQRs were changed repeatedly during the procurement process. This created difficulties during technical and price evaluation and affected the integrity of competitive tendering. It was also one of the main reasons for delays in acquisition process. The objectivity, equity and consistency of the technical evaluation process was not evident in the Technical Evaluation Report," the report noted.
The audit also noted that the vendor response to solicitation of offers was low, which restricted competition. The number of vendors who responded to the request for proposal (RFP) was far fewer than the number of vendors who were invited to bid.The acquisition process under which the IAF was functioning also saw delays at various stages, the report noted.
13/02/19 First Post
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