Why the Indian military needs a “bureaucratic overhaul” to compete with China in the New Age war?
The Indian Chief of Staff, General MM Naravane, recently criticized the country’s defense procurement procedure, last revised less than a year ago, stressing that the needs of the war of the information age “cannot be hampered by the procedures of the industrial age”.
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General Naravane was speaking during a webinar hosted by the Delhi-based United Services Institution on August 3, 2021,
Stating the obvious, he said, the armed forces cannot hope to fight and win the next war with legacy structures that have hampered faster decision-making. He also mocked the “zero error syndrome”, built around the bureaucratic network of checks and balances, which delays the acquisition of required military capabilities.
His comments on the intricacies of the procurement process were not out of place, but it is surprising that the criticism came from the head of the organization who was fully involved in the year-long deliberations leading up to the promulgation of the Defense Acquisition Procedure 2020 (DAP 2020) in October of last year.
It is inexplicable why these deliberations have failed to address the gaps unless these have crept in in the year since the enactment of DAP 2020, which would also reflect poorly on the competence of the DAP 2020. high-level committee of 11 members set up by the Ministry of Defense under the chairmanship of the Director General (Procurement), and several sub-committees set up under his auspices, to review the procurement procedure.
If the procedure continues to be – or has become rapidly over the past year – as dysfunctional as General Naravane has pointed out, the only conclusion that can be drawn is that these committees and other stakeholders – services , think tanks and industry – lacked the foresight and imagination to develop an effective procedure, or the Department of Defense (MoD) was unwilling to accept the suggested changes that would have made the procedure efficient and user-friendly.
Are the rules eclipsing the supply?
Anyway, leaving no room for doubt, the army chief denounced the “authoritarian character of the rules” which, according to him, gives more importance to the process than to the actual reception of material by. the armed forces.
He called for a “revolution in bureaucratic affairs,” helpfully adding that perhaps the time had come to do away with the system of purchasing equipment from bidder L1 (lowest bidder), or L1.
The idea of a bureaucratic revolution is enticing, but in the absence of a post-revolutionary plan to restore order, it can create more instability and chaos. It is not known if General Naravane presented an alternative during the webinar, which could replace the existing dysfunctional supply regime.
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That would have been more constructive than the speech on the procedural problems which are moreover well known.
Some of these issues, however, are the result of prejudice and the lack of a calm dialogue on some of the more controversial ones such as whether to follow the L1 system in defense acquisitions.
The imagery associated with this system is that the rules require that departments necessarily purchase the cheapest equipment available on the market, whether or not it meets their requirements. This image has no relation to reality.
Departments are free to define the Quality of Service Requirements (SQRs), or specifications, of the equipment that they believe would meet their operational needs in as much detail as they wish.
Subsequently, suppliers offering equipment that fully meets the specified requirements are pre-selected by departments through a rigorous process of field and staff assessments. The L1 system only requires that, among suppliers who fully meet the service requirements, the lowest bidder is awarded the contract.
The Army Chief’s criticism of the L1 system also overlooks the fact that the Enhanced Performance Parameters (EPP) system, incorporated in the Defense Procurement Procedure 2016 (DPP 2016), allows the purchase of equipment. technologically superior which may not be the cheapest. It is not known to what extent this provision has been used by the services.
However, if the EPP system does not perform as well, it cannot be attributed to L1 syndrome. In fact, whatever shortcomings have hampered the PPE procedure, the situation should have been remedied during the revision of the 2016 DPP with a view to the enactment of the DAP 2020 so that the desired results can be achieved in the future. .
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The criticism of the L1 system is even more surprising as military equipment is frequently purchased from overseas as well as from domestic industry, but for most public sector companies, on a single source basis.
There is no N1 supplier in cases where there is no other competing tenderer. Purchases of equipment and platforms from Russia as well as the United States – in the latter case through the Foreign Military Sales program – fall into this category.
Even the Rafale Multi-Role Combat Aircraft contract was not awarded on the basis of the L1 system. India ended up acquiring the most dominant fighter jet available on the market in addition to cementing ties with a powerful ally with UN veto power – France.
“Problems” can always be solved
In any case, if the L1 system is as desperate a system as it is claimed and deserves to be abolished as General Naravane suggests, an alternative system must be worked out by those who argue that it must be thrown out. .
In fact, this should have been done during the DPP 2016 review as well, as the L1 system has been around for ages. Even now, it is not too late.
General Naravane gave an example, centered on a hypothetical purchase of skis, to illustrate how the purchase process is not very user-friendly. He questioned why the procedure should require that the proposal be rejected if the skis offered by a seller – presumably the lowest – weighed 1.6 kg while the Indian Army (IA) had requested skis that weighed in between. and four kilograms.
Lighter skis, he said, would be better for the troops after all. He’s absolutely right on this point, but this example makes for an interesting case study.
Normally, such a situation should not occur. The prescribed procedure requires that a Request for Information (RFI) be issued before initiating a procurement proposal to determine what type of products are available in the market or can be manufactured within the specified time frame, which meet operational requirements.
In the example given by the chief of the army, it would have emerged from the response of the potential bidders that a ski weighing 1.6 kg or so is available, in which case it is inexplicable why it was specified in the Request for Proposal (RFP) that skis must weigh between two and four kilograms.
Alternatively, a wider range could be specified in the DP or, better yet, no range should have been specified if the AI felt that the lighter the skis, the better for users. At best, a lower weight limit could be specified.
The IA could also stipulate that the weight in determining the lowest bid would be given to sellers for skis that weighed less than the range stipulated in the RFP, treating the lower weight as a PPE.
This would have made it possible to purchase skis of less weight but at a higher price than that proposed by the lowest bidder. Not having exercised any of these options available under the existing procurement procedure, the Executing Agency adhered to the weight specifications mentioned in the RFP.
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Having specified the weight of the skis in the RFP, it would not have been wise to relax the requirement. This procedural requirement is not without reason. Such relaxation of specifications, or other terms and conditions, may give rise to complaints from other sellers who did not respond to the tender because the product they had was lighter than the specified weight.
They can complain that they would have also submitted their bid and entered the competition if they had known that lighter skis were also acceptable.
One of the fundamental principles of public procurement is the fair treatment of all potential bidders. This principle cannot be neglected to remedy any act of omission or commission when formulating the SQRs and defining the terms and conditions of the RFP.
A certain discipline is essential in the treatment of public money. It cannot be ridiculed as a bureaucratic network of checks and balances.
No ‘revolution in bureaucratic affairs’ can do away with rules and procedures, but these can certainly be made simpler and more logical, which is precisely what the government claimed to have done when DAP-2020 was enacted. Last year. These assertions run counter to General Naravane’s harsh criticisms of the existing procedures.
(Amit Cowshish is a former Financial Advisor (Acquisition), Ministry of Defense. He was associated as a Distinguished Fellow with the Institute for Defense Studies and Analyzes, New Delhi, and as a partner with Dua Associates, Advocates and Solicitors. He writes regularly on financial management issues in defense, purchasing policy and procedures, budget, planning and other related matters.)