Defence Industry

Defence Procurements: Need for Accountability Audit
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Issue Vol 25.2 Apr-Jun2010 | Date : 10 Jan , 2011

Sluggish modernisation of the Indian armed forces has been a cause of serious concern to all who are concerned with national security. Whereas the process of modernisation is lagging behind by 10 years, the defence procurement mechanism continues to remain mired in delays and controversies. Despite the fact that India put in place a dedicated organisation to handle defence procurements in 2001 and promulgated a comprehensive procurement procedure in 2002, there has been little discernible improvement on ground. Experience over the last nine years has exposed India’s inability to conclude major defence deals in open competition. All reforms have failed to deliver and the drift continues.

The current procurement regime, consisting of the Defence Acquisition Council, the Defence Procurement Board and the Acquisition Wing, is well structured. Similarly, the defence procurement procedure has been fine-tuned through four revisions. Yet, defence procurements continue to suffer from a number of serious infirmities and are in news for all wrong reasons.

Accountability implies liability for ones acts of omission and commission in the performance of designated duties. It is a multi-dimensional concept covering disciplinary, administrative and ethical facets

Even the Defence Minister has been expressing his exasperation with the current state of affairs. A number of reasons have been advanced for the failure of the procurement mechanism.Unfortunately, the main reason i.e. a total lack of accountability has been completely overlooked.

Accountability implies liability for one’s acts of omission and commission in the performance of designated duties. It is a multi-dimensional concept covering disciplinary, administrative and ethical facets. Accountability is generally considered synonymous with answerability. It is an obligation to perform as per well established norms, conventions and charter of duties. In government service, it also refers to the obligations imposed by service rules to perform in the designated manner and deliver results accordingly.

In bureaucratic parlance, accountability and responsibility are used loosely to indicate official compulsions. However, there is a distinct difference between the two. Whereas responsibility implies obligation to act, accountability means obligation to answer for a course of action adopted. Thus, accountability is a much wider term and covers both activity and inactivity (acts of commission and omission). Additionally, accountability has an associated system of rewards and censures. Therefore, accountability is performance-centric. An official can be held accountable both for non-performance and inappropriateness of actions taken. As stated earlier, a total lack of accountability is the bane of Indian defence procurement regime. Most of the ills afflicting defence procurements can be attributed to this single factor.

Indian procurement process consists of the following critical stages:

“¦accountability is a much wider term and covers both activity and inactivity (acts of commission and omission)”¦ An official can be held accountable both for non-performance and inappropriateness of actions taken.

  • Formulation of Services Qualitative Requirements (SQR).
  • Issuance of Request for Proposals (RFP).
  • Technical evaluation.
  • Commercial evaluation and contract negotiations.

Formulation of SQR

SQR refer to the essential characteristics of proposed military equipment projected against a specific time period to counter an estimated enemy threat or to fill other operational voids. SQR are defined as the minimum essential military requirements, corresponding to the task or tasks to be performed by the system. The defence forces formulate these to achieve full operational exploitation of the equipment being procured. Evolution of SQR is the start point and the entire procurement process is directed towards getting the equipment which satisfies the laid down SQR.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Maj Gen Mrinal Suman

is India’s foremost expert in defence procurement procedures and offsets. He heads Defence Technical Assessment and Advisory Services Group of CII.

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