Friday, May 26, 2023
Support Our Journalism
HomeDefenceDassault was not the lowest bidder — CAG report contradicts Modi govt...

Dassault was not the lowest bidder — CAG report contradicts Modi govt on Rafale

CAG says a defence ministry panel report stated in March 2015 that Dassault was not L1 in the original bidding process for 126 jets, and so a contract could not be signed with it.

Text Size:

New Delhi: The CAG report on the Rafale deal tabled in Parliament Wednesday has revealed that a month before Prime Minister Narendra Modi announced India’s intention to buy the 36 fighter jets, a Ministry of Defence panel had found that Dassault Aviation was not the lowest bidder in 2012, and therefore a contract could not be signed with it.

This contradicts one of the main reasons given by the Modi government all along for selecting Rafale and not its competitors.

The Modi government and Defence Minister Nirmala Sitharaman have insisted that the deal was signed as an emergency purchase because Dassault had emerged as L1 (lowest bidder) in the UPA government’s Medium Multi-Role Combat Aircraft (MMRCA) tender.

Sources in the MoD, however, sought to explain the contradiction by saying that the deal for 36 Rafales was a government-to-government contract, and L1 or any other company does not come into play.

However, they did not explain why the government had in the past highlighted that Rafale was chosen as L1 in the UPA era whenever the opposition has questioned the 2016 contract.

Key report

After the determination of the L1 vendor in 2012, there were several complaints alleging irregularity in the price evaluation process, including some filed by Members of Parliament, the CAG report said.

Then defence minister A.K. Antony had, in June that year, set up a team of ministry officials to re-examine the process, to “derive complete assurance of the integrity of the procurement”, it said.

The CAG report stated that the team, in its report submitted on 27 March 2015, said Dassault Aviation was “not the L-1 and therefore contract (MMRCA) cannot be concluded with them”.

The panel also found that the bid of EADS, the consortium that makes the Eurofighter Typhoon, was also not in accordance with the Indian Air Force’s requirements. EADS had even offered a discount of 20 per cent to the government on 5 July 2014, but the government did not entertain it, saying it was a violation of the Defence Procurement Procedure (DPP).

The panel recommended the cancellation of the ongoing procurement programme (126 MMRCA), which the government did in July 2015.

However, PM Modi had already made the announcement for 36 Rafales in Paris in April 2015, a month after the panel filed its report.

Also read: BJP strategy to fight Rafale accusations — ‘talk extensively’ about CAG report & SC order

Rafale would still have been cheaper, say MoD sources

MoD sources said that Hindustan Aeronautics Limited had sought 2.7 times the ‘man hour’ cost quoted by Dassault for the manufacture of 108 planes under the UPA term proposal, and “just” this addition would have made the Rafale costlier than EADS’ Eurofighter Typhoon.

They added that since HAL had never got into any negotiations with EADS, it would be wrong to presume that the price quoted by the European firm would not have gone up.

“Irrespective of the above, since the comparison of 36 Rafales under IGA (inter-government agreement) is with 18 Rafales in MMRCA, Rafale will be the L1 as there is no impact of the cost calculations on flyaway aircraft,” a source said.

Rafale technically flawed

The CAG, while going into the proposed UPA-era deal for 126 aircraft, also said the technical selection of the Rafale was flawed because the aircraft had failed to fully meet the prescribed requirements (Air Staff Quality Requirement).

“The aircraft should have been rejected at the technical evaluation stage (before field evaluation) itself,” the CAG report said, citing the MoD panel’s report.

Lacunae in process 

The CAG audit of the MMRCA tendering has also highlighted various lacunae in the process.

Talking about the multiple concessions given to Dassault, the CAG noted “that the opportunity provided to M/s Dassault Aviation to significantly modify its technical and price bid was in violation of DPP”.

The ministry, in its reply, stated it was not a violation of the DPP, and that it was approved by the highest decision making body, the Defence Acquisition Council. However, Para 35 of the DPP allows for only minor deviations which do not affect the basic character of the bid, or materially change the bid.

“But M/s DA was allowed to bring about enhancements of 14 parameters which, ultimately was to cost over ‘XX’ million € [price redacted]. Hence, M/s DA was treated preferentially. The firm attributed these modifications to the unique requirements of the IAF and called them Indian Specific Enhancements (sic),” the CAG report said.

“However, Audit noted that the Indian requirements, while they might not have been available in Rafale, were not unique because most of these features were available in the other 5 aircraft that were evaluated. For instance, Helmet Mounted Display was available in all modern fighter aircraft including Eurofighter.”

Also read: NDA Rafale deal cheaper by 2.86% but price could have been cut further: CAG report

Subscribe to our channels on YouTube & Telegram

Support Our Journalism

India needs fair, non-hyphenated and questioning journalism, packed with on-ground reporting. ThePrint – with exceptional reporters, columnists and editors – is doing just that.

Sustaining this needs support from wonderful readers like you.

Whether you live in India or overseas, you can take a paid subscription by clicking here.

Support Our Journalism


  1. Everyone knows feku is anti national though he calls all people opposing him are.Whatever major decision he took cost India dearly.

  2. This is irrelevant for two reasons. First of all you are accusing Modi Govt of paying over and above what you suggest UPA Govt had agreed. So the fact that you are comparing the two deals must mean that we are past choosing between Dassault and other vendors. Secondly that is because our Air Force has made it very clear that they wanted this aircraft. Period! The debate of the brand chosen is not longer relevant. So do not try to divert attention just to keep the pretence of a controversy going.

  3. Who knows, maybe Rajiv Mehrishi has read Munshi Premchand’s Hindi short story, PUNCH-PARMESHWAR which essentially says, “God speaks through a jurist”. Let Ranjan Gogoi also read that story.

  4. The ISEs appear to be a bit of a red herring. They simply bring the Rafale to the requirements of the original RFP. 2. Since the emergency purchase was for only 36 aircraft and the IAF’s requirement since 2001 has been for about 126, it would have been widely known that a follow on order would have to be placed. Presumably, by following a normal tender route, in which Dassault would be eligible to participate. 2. The cost of developing these ISEs – some observers have said this is now standard stuff – is being borne by the IAF. Strictly speaking, IPR belongs to the IAF. While Dassault would likely use this technology in aircraft supplied to France, Egypt, Qatar, at least if it sells any more jets to India, this item of cost should be clearly excluded from its pricing. If not done already, a supplementary protocol could be entered into with Dassault or the other supplier, clarifying this aspect. Any participation by them in a future bid should incorporate this condition.

  5. Wow, you people are determined to create a controversy where there is none, just because the current government does not suit your ideology. I do not see a whiff of corruption by the Modi govt. The only thing I see is a sense of urgency to get the much needed planes to the desperate Indian Air Force. The government did what it needed to do for national security, unlike the previous government that did nothing. You guys are hoping that the Indian voters are ignorant and foolish to fall for your Goebbelsian propaganda.

Comments are closed.

Most Popular