Consolidate Domain Knowledge of Personnel to Execute Defence Procurement Policy 2016

In keeping up with its recognition that ‘self-reliance in defence is of vital importance for both strategic and economic reasons’, the government has released the much anticipated Defence Procurement Policy (DPP) in March 2016. The DPP gives top priority for procurement of indigenously designed, developed and manufactured equipment. Earlier too, the prime emphasis in DPP 2013 was upon categorizing every proposal as Buy (Indian) unless adequately justified to the contrary. However Indigenization hardly made headway. The analysis of pitiable performance in defence indigenisation in the past has been done numerous times by the controlling authorities and committees. One of the causes outlined in most case studies is the pitfall in implementation process. Poor implementation has always been the bane of Indian Administration and if we are able to overcome this drawback with requisite determination and honesty of purpose, there could be a ray of hope for the services¹.

Indians have not been found wanting in promulgating perfect policies. Very often, new policies get made the moment a new Commander is appointed but implementation has always seen to be tardy. That’s because execution is a different ball game and requires in depth understanding of policies, domain knowledge and whole hearted participation from people. Unless people are well trained and confident, even good policies will not produce the desired results.

The stated aim of DPP 2016 is to ensure timely procurement of military equipment, systems and platforms required by the Armed Forces through optimum utilization of budgetary resources and pursuance of self-reliance in defence equipment production and acquisition with highest degree of probity, public accountability, transparency and fair competition.

The prerequisite of involvement of private sector in the development of a Defence Industrial Base (DIB) has been very well articulated by various governments and adequately reflected in DPP 2016 as well. After all, the private sector has excelled and boosted the Indian economy in automobile engineering, communication and telecommunication, Information Technology (IT), IT Enabled Services (ITES) and service sector. It is not only globally competitive, but is also acquiring assets abroad.

However, when it comes to manufacturing of defence equipment, the private sector including the Micro, Small and Medium Enterprises (MSMEs) do not seem enthused enough to participate. Private sector has been often complained about the long wait for a securing license and absence of single window clearances. Frequent rotation of personnel at important desks frustrates the entrepreneurs the most as a new beginning has to be made time and again to resolve their queries and process the cases when new incumbents take over.

The acquisition process involves the following 12 intricate processes:-

1. Request for Information (RFI).
2. Services Qualitative Requirements (SQRs).
3. Acceptance of Necessity (AoN).
4. Solicitation of offers.
5. Evaluation of Technical offers by Technical Evaluation Committee (TEC).
6. Field Evaluation.
7. Staff Evaluation.
8. Oversight by Technical Oversight Committee (TOC).
9. Commercial negotiations by Contract Negotiation Committee (CNC).
10. Approval of the Competent Financial Authority (CFA).
11. Award of contract/Supply Order (SO).
12. Contract Administration and Post-Contract Management

To meet the stated aim and undertake the 12 elaborate processes under DPP 2016, the personnel dealing with procurement will surely require in depth knowledge and understanding of rules and regulations besides consolidation of work experience. One primary impediment to implementation of DPP in the past has been deficiency in domain knowledge of personnel dealing in defence procurement. It is a truism that the officials, whether they are in Ministry of Defence (MoD) or in Services HQs, are not trained to deal with the intricacies of defence procurement. Their expertise is built only through their own adaptability in related appointments².

In his paper ‘Operationalising DPP 2013’, Air Vice Marshal Manmohan Bahaur has said, “There is a major issue of non-availability of resident expertise in the acquisition process amongst the designated personnel, both civil and military. In the military there is no systematic cadre management of such human resource, thus, more often than not, an officer gets posted to the acquisition branch from any place, may be from a field area, without knowing anything about the intricacies of procurement. A similar situation is prevalent in the MoD, where inter-ministerial transfers are governed by career progression imperatives rather than by the yardstick of domain expertise”³.

While sufficient energy and resources have been expended to constantly revise the DPP and generate expediency, transparency and probity in defence procurement, the lack of insufficient domain knowledge of personnel dealing with procurement that has been flagged many times during its assessment has not been addressed. Quite often an acquisition process undergoes multiple cycles of expiry of one or the other approvals like AoN, Request for Proposal or the Commercial offer itself due to frequent rotation of personnel in key appointments in Service HQs, Defence Acquisition Council (DAC), TEC, CNC, Technology Perspective and Capability Roadmap (TPCR) planning office and Defence Offset Management Wing (DOMW), delaying procurement of equipment.

So what can be done differently by the government this time to find success in implementation of the DPP 2016? In USA, through the ‘Congress mandate’, the government maintains a base level of 1,45,000 skilled work force for dealing with the defence deals and the UK has 6000 personnel trained for procurement⁴. However, in the Indian context, even permanency in postings has not been successful as experienced from the performance of Defence Research and Development Organisation (DRDO) and Defence Public Sector Units (DPSUs).

Actually, the impasse of non-availability of trained manpower is quite easy to fix as MoD personnel are well motivated to learn new skills. Once a person gets posted to a procurement related appointment he/she acquires adequate on the job training and experience. What is lacking is consolidation of the domain knowledge and work experience gained in the procurement function due to posting out of staff after a limited tenure based on a rigid belief that rotation of personnel is necessary for career progression and service requirement.

In the existing system the personnel learn the nuances of defence procurement on the job after being posted there. The postings are generally for a period of three to four years and thereafter a replacement is posted in who may also be alien to the procurement procedures at the center. The learning and experience gained by the outgoing person gets dissipated immediately as he is mostly sent to perform an entirely different task. Frequent rotation of personnel causes frequent snapping of links and inadequate maintenance of historical database leading to difficulty in benchmarking of costs that is vital for procurement of equipment. Due to lack of continuity, policies and guidelines are being regularly altered on the basis of individual assessments of the nation’s need for armed forces⁵. The procurement projects also keep getting varying degree of importance that ultimately causes either delays or a dead end. We have right people available but their placement has been flawed.

Therefore, it is recommended that the government provides opportunity to the manpower that gains experience and interest in procurement to continue working on defence procurement and not dissipate this advantage to meet other perceived important criteria like tenure and rank based postings. A competent team will gain in confidence. Once a base is created, applying single window clearance concepts in defence procurement can begin . The knowledgeable team will effectively handle the Original Equipment Manufacturers and industry bodies by virtue of domain knowledge resulting in transparency and probity in defence procurement.

To implement the suggestion an institutional mechanism will have to be created under the top leadership to curb the home biases and turf wars. A reliable team under the honorable Raksha Mantri may be formed for implementation of the new Human Resource (HR) policy to achieve the aims of DPP 2016. The Integrated Defence Staff (IDS) Headquarter (HQ) can be the nodal agency. HQ IDS is the nodal agency for jointmanship in MoD which integrates policy, doctrine, war fighting and procurement. It is an institutional framework for higher defence management and functions as principal arm and secretariat to the Chiefs of Staff committee. HQ IDS has also been involved in a lot of discussions to simplify the acquisition process.

Sufficient organizational structure exists in IDS. But it too lacks the domain knowledge in procurement due the similar constraints of continuity, lack of attitude for collaborative functioning and authority that has stymied the implementation of DPP. A competent team when formed can establish a cell for imparting education and training in defense procurement. Similar model will have to be replicated by each service HQ for meeting their requirements.

The team will be focused on directing and regulating the placement of right people for the right job. A domain knowledge qualified, confident and strong team can bring in the benefits of synergy between multiple agencies involved in defence procurement. It would be sad if we become slaves to the procedures and systems to the extent that indigenization and DPP 2016 become casualties.

The recent policies of the government like Make in India, Skill India and Digital India are good initiatives to create a defence industrial base that India can be proud of. Indigenization can get wings if the necessity of consolidation of domain knowledge in procurement is recognized. The attractiveness of the proposal to consolidate domain knowledge is wrapped in the fact that it doesn’t require any additional spending. Only an experienced, motivated and regulated team can understand and resolve the nuances of defence procurement and the much-touted offsets policy. Mutual trust and honest relationship in the defence procurement eco system will also flourish.

Endnotes

1. Gen N C Vij, Unravelling DPP 2013
2. Gen N C Vij, Unravelling DPP 2013
3. AVM Manmohan Bahadur, Operationalising DPP 2013
4. Brig Rahul Bhonsle, DPP 2013: Opportunities and Challenges
5. Brig Vinod Anand, in his paper, Private Sector as Partner in Attaining Self-Reliance

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Published Date: 12^th April 2016 Image Source: http://indiatoday.intoday.in [3]
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)