Part 3 – contd from part 2:

The Defence sector is considered the ultimate in robustness of processes followed in day-to-day operations. Rigid enforcement of discipline, turnout, maintenance and operations ensures that every part of the organisation including men and machines are fighting fit at any time of day or night. But, if every one of these actions are questioned for authority and expense by bureaucrats who have no knowledge of the operational needs of the defense forces, then there is little doubt that the Armed Force would be a demotivated and ineffective force. On the other hand, if the Armed Forces are given discretionary powers that are misused or abused, this would also be unacceptable from a bureaucratic angle. This is where a good mix of trust and powers of discretion are required in a robust system that does not leave the swords of the CVC, CAG and CBI hanging above the heads of the officers of the Forces. This appears to be the actual situation at present with no one really wanting to take any decision however small they may be at any level of authority.

Other issues that aggravate the situation are the following:

Shortages at the maintenance workshop of the Armed Forces catches somebody’s attention only when the foreign OEM stops either supply of spares or repair services due to complete obsolescence. This causes an immediate need that cannot be met by indigenisation which is a very time consuming long term solution which can take as long as 5 to 8 years in some cases. By the time the long term solution is implemented, the need itself disappears since the ageing platform (aircraft) itself is either discarded or goes through an upgrade by the foreign OEM, thus turning the indigenized item redundant.

Why does indigenisation have to take such a long time? A wide range of issues determine whether indigenisation of a durable item such as an LRU is economically viable or not. To begin with, a majority of the aircraft of the IAF are at least 30 years old in terms of design and technology. Many are as old as 50 years. Very few countries operate such obsolete aircraft not only due to lack of maintenance and spares support, but also due to their poorer performance compared to recent versions. In such a scenario, the IAF would certainly like to phase out such aircraft if only new ones were made available. But, have our Governments ever been bold enough to take these major decisions in time? In the absence of clear and timely decision making, the Armed Services can never take long term decisions on indigenisation of LRUs or sub-systems.

Within the Armed Services, indigenisation is a maze. No one knows for sure whether an LRU is to be indigenised by a DPSU or DRDO or a private sector industry. A year or more is lost in figuring this out. Then follows the issue of an informal RFI (Request for Information) or a feasibility study to be performed by prospective ‘Vendors’ registered with each Depot. A vendor cannot just assess feasibility since he has neither complete technical information nor even seen the item. He has to spend his own money to travel to the bases, dig out whatever info is made available to him (in most cases nothing), guesstimate the technology involved, time, effort and his own confidence level and then send a feasibility report with budgetary cost. This itself can take anywhere from 3 to 6 months. The Base would then study it and request the ‘Vendor’ to provide a detailed break-up of the budgetary cost estimate. Making a budgetary cost estimate for an item about which very little or nothing is known is bad enough. But, to be asked to provide a break-up is asking for the impossible. For the sake of moving the process forward, some figures are worked out in 2 or 3 months time. It is then time to release an RFQ, which is a very crucial document that has to include unambiguous technical specifications, quantities required over the next few years, method of evaluation of the lowest bidder, timelines for development of prototypes as well as production batches, etc. Since many of these details are not clearly known even to the purchasing authorities, preparation and release of RFQs themselves take 12 to 18 months, sometimes even as long as 3 years! It can be seen that it would have already taken 2 to 3 years to reach this stage from the time the need was identified.

The RFQ states that bids should be valid for a minimum of 180 days. During this time, a technical evaluation of the bid followed by commercial evaluation of those who qualified the former, is carried out. Then follows a price negotiation with the lowest bidder to beat him down further even if it was already unrealistically low. Finally a purchase order is released just a few days before the lapse of the validity of 180 days.

Now, if the RFQ was based on assessment of need for the item for the next 5 or 6 years, it can be seen that more than half that time is already consumed upto the release of the RFQ. Allowing for another 3 to 4 years for the development and certification of the item, it is little wonder that the need for the item no longer exists! So, what does the vendor get out of his efforts over 6 years? Literally nothing that can be called business gains either in the short or long term.