CAG Audit Finds Flaws in IAF's Procurement Procedure, Highlighting Bias Towards Specific Vendors Citing Apache and Chinook Deals

A recent audit conducted by the Comptroller and Auditor General (CAG) of India has revealed concerning irregularities in the Indian Air Force's (IAF) procurement process, particularly in the formulation of Aircraft and Systems Qualitative Requirements (ASQRs).

The audit report, which was recently presented to Parliament, suggests that the IAF has been tailoring ASQRs to favor specific vendors, compromising the principles of transparency and competition enshrined in the Defence Procurement Procedure (DPP).

The CAG audit discovered that instead of defining ASQRs based on operational needs and broad specifications, the IAF has been directly incorporating technical specifications of existing products readily available in the market.

Furthermore, these specifications often appear to be derived from inputs provided by select vendors during the Request for Information (RFI) stage.

"The RFI process was frequently used as a means to engage in selective consultations with one or two vendors, subsequently modifying the ASQRs to match their specific products," the CAG report states. This practice effectively narrows down the competition, limiting the IAF's options and potentially inflating costs for the taxpayer.

The audit highlighted the procurement of Apache Attack Helicopters and Chinook Heavy Lift Helicopters as prime examples where ASQRs were seemingly aligned with the products of a particular vendor.

In the case of the Chinook helicopters, the CAG noted that the ASQRs were revised multiple times between 2006 and 2009, ultimately mirroring the specifications of the Boeing CH-47F Chinook. This resulted in the exclusion of the Russian Mi-26 helicopter, despite its higher payload capacity and troop carrying ability.

This practice of tailoring ASQRs not only stifles competition but also raises concerns about potential bias and favoritism in the procurement process. The CAG report emphasizes the need for the IAF to adhere to the DPP guidelines, which advocate for open competition and transparency in defence acquisitions.

It recommends that ASQRs be formulated based on operational requirements rather than market availability, and that RFIs be used to gather a wide range of information instead of selectively consulting with specific vendors.

The IAF and the Ministry of Defence are yet to issue a formal response to the CAG's findings. However, this audit is expected to trigger a review of existing procurement procedures and potentially lead to reforms aimed at ensuring greater competition, transparency, and value for money in defence acquisitions.

 

[Rajesh]

That the case always.
choose vendors before and create spec as per his products.

 

[Anant]

Well, while this isn't exactly a good thing to do, it is better to do this than to follow the older policy of "Draft your requirements based on technology that won't exist for another 20 years."

 

[Abs29]

Wow it took an audit to reveal procurement favoring certain vendors? A cursory glance at RFI/RFP should be more than enough for industry observers to realize that the RFI/RFP has been intentionally so designed to favor a specific party.

 

[Aayush Pratap]

What would be the purpose of setting ASQRs that don't exist?

 

[Kira]

Well, while this isn't exactly a good thing to do, it is better to do this than to follow the older policy of "Draft your requirements based on technology that won't exist for another 20 years."

I was thinking the same exact thing, at least the services are not demanding star wars type scifi hardware.
Naturally, requirements would be around the options available in the market.

 

[Enforcer]

So basically Air Force is choosing what they want? Huh? isn't that typically what all air forces do anyways? At least the aircrafts they have chosen are high quality and proven platforms.

If I had to pick a car between Tesla and Lada, i think i would pick tesla everytime too. And especially if they cost around the same.

 

[Dr]

Even after following such policies, it takes years for our armed forces to decide. What will happen if the armed forces send their own requirements? It will still delay procurement by years. It is noted that after trials, armed forces do ask vendors to add or improve on certain things. If we take the example of Poland, they have started receiving their placed orders, but our procedural practices are such that we cannot finalize orders even in that much time.

 

[Bhishma]

They are fudging the specs to favor imports vs. homegrown. That is the point of this article. When they say we need x-KN or y-altitude, it's not coming from necessity, research, or facts. It's just that the foreign product beats the local product in that particular spec metric. They conveniently use that metric to disregard the local product.

 

[Deepak Hegde]

So basically Air Force is choosing what they want? Huh? isn't that typically what all air forces do anyways? At least the aircrafts they have chosen are high quality and proven platforms.

If I had to pick a car between Tesla and Lada, i think i would pick tesla everytime too. And especially if they cost around the same.

This is exactly the problem! Rather than relying on and accepting the common-sense approach you mentioned, the bureaucracy wants to focus on the process to an extent that the expected outcome is totally neglected and timelines are indefinitely delayed! No wonder every single critical procurement item is delayed by decades, be it fighters, AWACS, refuelers, or submarines! The whole process of procurement needs to be shaken up to focus on the desired outcome if anything is to be actually achieved on time!

 

[Arvind Sharma1]

Qualitative requirements are based on the technologies available in a segment. Post-finalization, the vendor is asked to incorporate specific enhancements.If the IAF needs Chinook, obviously, QSR will be similar to the existing equipment in the market.Actually, auditors should be assigned for scientific innovations because then everything will be by book and logic, except that nothing will be produced/invented ever.Those who faced the audits in the service are well aware of auditors: of their tantrums and illogical observations.