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Gen Naravane urged to drop L1 regime from defence procurement. That’s just one problem area

What Naravane stated publicly has been rued for years, in private, in the defence establishment.

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Army chief Gen M.M. Naravane dropped a bombshell recently. Speaking at a seminar organised by the United Services Institution, Gen Naravane called for a rethink of the L1 concept in defence procurement under which contracts are awarded only to the lowest bidder.

He did not stop at that. He also called for a “revolution in bureaucratic affairs”, arguing against the “zero error syndrome” that he thinks is contributing to lacunae in defence procurement.

The Army chief is right in seeking these changes. He stated publicly what has been rued in defence circle for years in private. His public appeal shows that the current procurement system, which is formulated by the Defence Ministry in consultation with the Services, needs drastic overhaul.

A number of projects have been stuck due to the L1. The concept of L1 is the reason why single-vendor deals are frowned upon. There are multiple clearances that need to be taken in a single vendor situation, more so in the case of a company becoming resultant single vendor.

The L1 rider also means India is denied the chance of acquiring more capable systems than a Request for Proposal (RFP) originally aims for. Such systems cannot be bought because their costs are higher than what the Services seek. The requirements are formulated years before the systems actually start coming in and, at times, the technology jumps many fold, especially when it concerns electronic warfare.

Knowing fully well that Indian procurement system is convoluted and long drawn, the Narendra Modi government last year allowed leasing of equipment by the Services. However, as I had argued in December 2020, while leasing is the easy way out, it has large-scale implications in the longer run.

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Services need to change RFI, RFP formulation

While the Army chief has called for changing of defence procurement processes, an important reform that the Services should bring in is the way they formulate their General Staff Quality Requirements (GSQR).

Defence industry insiders, both domestic as well as foreign, often speak in private of the way the Services draw up the RFP with requirements that in reality are not available in the market. Or seek too much in small quantities that does not make commercial sense for the sellers.

A classic example of how convoluted Services’ GSQRs can be is an RFP issued by the Army in 2011 for the procurement of a multi-calibre assault rifle (capable of firing both the INSAS 5.56×45 mm and AK 47’d 7.62×39 mm ammunition). This meant that different barrels would be used. The small arms industry was stunned because such rifles are used by only the elite Special Forces across the world and are considerably expensive than a regular rifle.

As was feared, the RFP did not fructify because no vendor could meet the infamous GSQRs. It is 2021 and the soldiers are still awaiting new rifles to replace the INSAS. The Army had to go for an emergency procurement of 1.42 lakh SiG 716 rifles from the US even as it awaits the finalisation of the deal for AK 203 rifles with Russia that are to be manufactured in India.

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The counter-drone saga

While there are many examples of how various RFI and RFPs are self-defeating in the long run, the most recent examples are the ones issued for anti-drone systems.

Last year, the Army’s Project Management Office (PMO) Suraj issued an RFP for 28 counter-drone systems. The plan was to distribute these among all seven Commands of the Army. While the RFP mentioned requirements for drones, it did not specify what kind. It did not mention if the counter-drone measures were for quadcopters, nano drones or the bigger kamikaze or loitering ammunition types. This is very important because there are different systems for different kinds of drones. It is basically horses for courses. While a counter-drone system for kamikaze or loitering ammunition-types can have a detention range of over 70 km, their detection capability for smaller variety may be less than 5 km.

Similarly, systems meant to detect and tackle smaller drones will not have the capability to track bigger drones and that too at larger ranges. Also, the requirements spoke only about jamming mechanism and not spoofing, which is a different capability altogether. Of course, a company with a better system would not win the contract because the one quoting the lowest bid will be chosen. Interestingly, PMO Suraj has now issued a fresh RFI seeking three systems for the mountains, giving a more detailed requirement. But what is missing again is the kind of threat they seek to counter.

Interestingly, various RFIs and RFPs issued by the Services for counter-drone measures talk about maintenance liability for equipment providers for specific years, in some cases up to 10 years. The maintenance requirement is essential when the forces are buying trucks, artillery pieces or aircraft. But in a fast-changing world of drones and counter-drones, the focus should be on upgrade timelines rather than maintenance timelines.

The Air Force has also issued a limited RFI for 10 counter-drone measures that can “detect, track, identify, designate and neutralize” hostile drones, and a Laser-DEW is essentially required as a ‘kill option’. However, laser technology is expensive and an overkill. The standard measures across the world are jamming and spoofing. So, while the current buzz is about doing away with the L1 system, besides drones and counter-drone measures, the Services will do themselves a big service if they look inwards as well.

Views are personal.

(Edited by Anurag Chaubey)

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