Indian Defence Review

Upping the Indigenous Content (IC)

In a bid to encourage more and more use of indigenous products, the DAP has enhanced the IC % in some categories. This includes the Buy IDDM where the IC % has gone up from 40 to 50% and Buy Indian where the IC % now required is 50% when the design is Indian and 60% if it is not. Even for the new category of Buy (Global- Manufacture in India) the IC% requirement is 50%. All this will come as boon to domestic industry, where by default, opportunities will knock to provide indigenous components to meet IC criterion.

From Innovations to Products

There used to be a time when innovation activity was a stand-alone spark. It had no one-on-one connection with the acquisition cycle. The DAP has tried to forge this connection. There is now a provision for the procurement of prototypes produced as innovation projects and take them further on the product route. These innovations could either originate from initiatives like iDEX (Innovation for Defence Excellence) launched by the Govt in 2018 to promote the spirit of innovation and technology in the defence and aerospace sector, or through the Technology Development Fund set up by the Govt to enhance self-reliance in defence technology. It could also come from stand-alone events like competitions or contests organized by public/private sector (for instance Dare to Dream 2.0 by DRDO) or internal service organisations etc. In essence, an effort has been made to build a road from innovative ideas to real products.

Public Sector Products.

DRDO, DPSUs or OFB are public sector bodies which carry very huge upfront investments from the Govt. It is imperative that the products designed and developed by them do find their way into the user hands.

A separate Chapter in the DAP deals with the acquisition of such items (assumed that these are GSQR driven and developed through contracts won in an open competition). The procedures for acquisition have been simplified and an attempt has been made to dwarf timelines through a single-stage trial procedure.

Enabling provisions for development of new products through ideas like ‘spiral’ development have also been included (spiral development implies development of a whole by successive development of parts duly vetted and endorsed by user/developer/stakeholder at each stage). This is especially relevant for huge and complex systems involving multiple assemblies and multiple functions.

User side facilitation.

To facilitate the user side and allow them to procure certain essential items quickly, a new Chapter has been added titled ‘Other Capital Procurement Procedure’. This Chapter includes a simplified procedure to procure essential items in a time bound manner.

Nomination – totally a history.

The erstwhile provisions of allocation of contracts to public sector through a process of nomination are totally a history now. Not only that, following provisions in the DAP should alsocome as delight to the private players:-

•  For high value acquisition serials, the price variation clause has been allowed. This will end the erstwhile practice (read compulsion) of the sellers to give initially inflated quotes (in a hope to make good the price variation years down the line when it will be time to realize and supply the product.

•  In a bid to cut short the delays in release of payments to the vendors, provisions like parallel processing by the users and finance authorities has been included.

•  There is a provision to reward the vendors for using higher and higher indigenous material, indigenous software and so on.

Some New Chapters/Sections.

Besides the ones mentioned earlier there are some more new Chapters/sections etc. It clearly shows that a lot of experience related points have gone into evolving the DAP 2020. Some examples:-

•  Equipment related to information and communication technology (ICT) has peculiar requirement. In fact, between these two verticals (information and communication) lie about 60-70 % of all acquisitions. Besides the security aspects of data leak through dormant bugs, there are issues of inter-operability, compatibility and interference with other equipment, built-in upgradability, obsolescence and so on. All these aspects have been included in a new Chapter.

•  There is a new chapter on leasing which has been included as another category for acquisition in addition to the existing ones on Buy and Make.

Leasing will provide the option of possessing and using the asset without having to own it. Besides saving huge capital outlays, it will also cut down the time to start using the asset in response to an operational necessity. Leasing will particularly suit cases where the asset is required for a short time window or in small numbers (without having to spend administrative/maintenance cost on the same.

•  Likewise, there are separate Chapters on Post Contract Management dealing with all the aspects such as inspections, liquidated damages, contract amendments and so on

So much for the DAP 2020.

Points of Caution

This portion could appropriately be called ‘points of apprehension’ as implementation of what is desired will prove to be a tall order demanding much from the stakeholders. Some points:-

•  DAP 2020 – an intense document.

Out to simplify the procurement procedures, cut out delays and drive in multiple reforms, DAP 2020 has actually become very intense, very detailed and a multi-faceted document.

One more reason for this end-state has been the desire to pack in all the corrections garnered through decades of past experience, as also, to build new chapters and new provisions that relate to the new realities of ‘Atmanirbhar Bharat’, ‘make-in-India’ and finally, ‘an arrived private sector’.

All the above has made it a 681 page document ( DPP 2013-351 pages) What could be the implications? Probably the following:-

• • The document will demand a thorough reading and comprehension of the fine print. Suffice to say that it will be NO GO in the hands of non-experts, the uninitiated or the ‘cursorily aware’ types.
  • Lack of knowledge and awareness became one of the reason for non-exploitation of many an enabling parameters of DPP 2016 (Essential parameters A and B, Enhanced Performance Parameters or EPPs in GSQRs, flexibility provisions in offset parameters, to name a few). Similar if not greater danger of a ‘repeat,’ lurks in DAP 2020.
  • Many a proposed goodies could become traps/encumbrances if not properly thought through and ruthlessly executed (PMU, TAC, enforcing new trial provisions, steamrolling through corporatization) etc.

•  Grant of Waivers.

There is always an easy way out to push out a tough and an unforgiving provision out of the window. It is the grant of waiver. The same looks dwarfed in its menace if granted on a ‘case-to-case’ basis.

This prevalent practice so often subscribed to by various echelons in the MoD/acquisition stakeholders is a sure kill of the goodness that has been built with such painstaking effort in the DAP. The same must be avoided as far as possible while dealing with the new document.

•  On Fixing accountability and responsibility

This point has been flogged many times in the past. Inactions /wrongdoings (may be unintentional)/inordinate delays etc. continue to perpetuate and reoccur frequently (sic) simply because these are allowed to go unaccounted.

The litmus test of the DAP’s success will depend on the capability of the system to fix accountability and responsibility and take such remedial action which makes the re-occurrence of the same fault, a remote possibility (not carried further)

That the above points will remain ‘points of caution’ alone and not become points of ‘apprehension and undoing’ is the hope of the author.