Indian Defence Review

Sub-Optimal Quality of Acquisition Staff

Indifferent quality of acquisition staff is the single most important reason for delays in procurements. Officials who perform acquisition functions are drawn from the civil services, defence forces and the defence finance. No one is selected for any special flair for the job. For most of them it is just another routine assignment. Their approach continues to be entrenched in bureaucratic mediocrity and procedural quagmire.

No training in acquisition functions is ever provided to them. They are expected to identify, trial evaluate and negotiate import of defence equipment worth millions of dollars using their commonsense and basic intelligence. It is a very unfair and tall order.

The Services

The services are the biggest defaulters. They pay no attention to the selection of acquisition staff, although all procurement proposals are initiated by them and they are the most affected party. They have qualitative requirements spelt out for a host of other lesser appointments but none whatsoever for functionaries dealing with acquisitions that affect their war potential. Any officer can be posted to these appointments. Such an apathetic approach results in faulty preparation of qualitative requirements, tardy field trials and flawed staff evaluation.

Civil Officials

All expert committees have so far concentrated only on reforms in structures and procedures. No dispassionate, objective and holistic exercise has ever been carried out to identify the underlying reasons for inordinate delays which continue to dog the system.

Civil officials of the Ministry of Defence (MoD) accord approval to procurement proposals, issue Requests for Proposals (RFP), accept technical evaluation to shortlist vendors to be called for field trials, approve staff evaluation, open commercial bids and negotiate contracts with the lowest bidder. As can be seen, their span encompasses almost all procurement activities. Their role is of utmost importance and has a direct bearing on the success of any procurement programme.

They need to handle functions which involve intimate knowledge of military’s functioning, defence equipment, technologies involved and commercial negotiations. However, their selection is done in a routine manner without consideration of any demonstrated flair or proficiency. No training is imparted to them. Additionally, their short tenures preclude acquisition of on-the-job expertise.

Defence Finance

No procurement proposal can fructify unless Defence Finance functionaries concur with it at all stages from acceptance of necessity to closing the deal. Most importantly, they actively participate in all facets of commercial evaluation and negotiation of contract.

Despite the fact that they are mandated to ensure financial propriety, they are ill equipped for the task. They are neither qualified nor trained for defence economic advisory functions. Most of them are unable to grasp intricacies of international trade including application of Discounted Cash Flow and Exchange Rate Variation techniques.

Preparation of faulty contract documents can be directly attributed to their inability to understand implications of various provisions, resulting in nearly all subsequent arbitrations going against India’s interests.

And finally, Defence Finance takes fiscal orders from Ministry of Finance (MoF). Many feel that no major proposal is cleared till they get a green signal from MoF. This is done primarily to keep Central Government’s overall expenditure under control and force MoD to surrender funds to reduce deficit. This amounts to withdrawing funds allocated to MoD for its capital procurements, thereby adversely affecting the planned modernisation schedule.

Procedural Glitches

Indifferent quality of acquisition staff is the single most important reason for delays in procurements. Officials who perform acquisition functions are drawn from the civil services, defence forces and the defence finance. No one is selected for any special flair for the job.