Q. Novom Chauhan asked : As compare to other countries like US, China, Israel, how effective is our Defense Procurement Procedure 2016 and which best practices can India imbibe in order to make the system more efficient? please explain.
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Replied by VIF : Defence Procurement in India
  1. The defence procurement philosophy of any country gets defined or evolves depending on the nature of political system, the economic growth, the level of technological self-reliance and the type of threat it faces.
  2. The Defence Procurement Procedure (DPP) was formulated in 2006 to move beyond General Financial Rules (GFR) and the previous capital acquisition process and to lay down a comprehensive process suited to defence capital acquisitions with suitable planning, approval, execution and oversight mechanisms. While refinements in 2011, 2013 & 2016 have largely improved the procedures, it is still highly cumbersome, prone to delays and victim of bureaucratic & political interference.
  3. Some recommendations to further refine the process:

a. Permanent Defence Acquisition Organization within services, with specialist personnel from services who would be inducted after 8 to 10 years of field service. These officers will bring in the required field experience to provide the suitable interface with industry and scientific community.

b. Special training for officers involved in procurement.

c. Refinement is process defining QRs(Qualitative Requirements) and conducting trials, especially wrt all terrain suitability.

d. Implement L1T1( L1- Lowest bidder, T-1-Best in Technology) concept instead of GSQR(General Staff Qualitative Requirement) threshold & L1 system in vogue, to get better value for the money.

e. Reduce the multiple and layers for approval and oversight, a balance needs to be maintained between efficiency and audit, for speedy and timely processing of cases.

f. Increasing participation of private industry with technology induction from foreign technology giants.

g. Performance audit and review of role of OFB(Ordinance factory board) and DPSUs(Defence Public Sector units).

Posted on December 26, 2018

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