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.

 

[Dredd]

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."

what's wrong in asking for innovation in tech, How do you think USA or any western countries come up with better tech very now and then. Its a failure of DRDO to only develop things which already exists in market for 20 years and call it innovation.

 

[Akshat]

what's wrong in asking for innovation in tech, How do you think USA or any western countries come up with better tech very now and then. Its a failure of DRDO to only develop things which already exists in market for 20 years and call it innovation.

Well that can be done once you have the basics right, no? I mean, if we ask for super innovative stuff from abroad, then think of the price. And at the end, the host country will be the one benefitting from it as they will develop it at our cost and then sell it to others. And if we ask DRDO for it, we won't get anything ever.

 

[Akshat]

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.

On the contrary, they always induct junk "maal" made by the DPSUs at the cost of the private sector and foreign companies. Only at the end, when DRDO and DPSUs simply refuse to deliver anything at all, do they induct foreign "maal." They give so much concession to the local product that it's disgusting. The lives of our soldiers matter less to them than the guaranteed jobs of DRDO idiots?

 

[Avada kedavra]

On the contrary, they always induct junk "maal" made by the DPSUs at the cost of the private sector and foreign companies. Only at the end, when DRDO and DPSUs simply refuse to deliver anything at all, do they induct foreign "maal." They give so much concession to the local product that it's disgusting. The lives of our soldiers matter less to them than the guaranteed jobs of DRDO idiots?

Anyways, you didn't answer me one thing very clearly. When it comes to selecting which military hardware to be purchased, who has the final say? The military evaluators or the babus at the MoD?

 

[Avada kedavra]

Wait, what? So the air force doesn't know what parameters it needs in military hardware to win a war? They just copy-paste the parameters given out by their favorite vendor so that the vendor wins? If yes, this is absolute madness! Whatever respect I had for the military just went away.

And I am actually surprised they gave the example of Chinooks and Apaches. They are actually very good, if you believe the armchair generals.

I was expecting the S-400 to be the one guilty of favoritism since it has absolutely no real record of shooting down anything, unlike THAAD and Patriots.

Also, other Russian "junks" like the T-90, MiG-29, and others.

 

[Akshat]

Anyways, you didn't answer me one thing very clearly. When it comes to selecting which military hardware to be purchased, who has the final say? The military evaluators or the babus at the MoD?

Well I have told you many times, you just can't seem to accept it buddy. I will try once more time, probably the last time.

There is no one person who has the final say. It's a system where different people have different responsibilities. (I might use the term army and military interchangeably) The army always initiates the process. So without them, no one can initiate it. Someone else might cancel it but can't initiate it. So that power remains with them. Then, it varies based on the mode of procurement and the size. Some items can directly be purchased by the military (emergency procurements, for example), while some items have to go up the chain. If it goes up the chain, then the civil side is always in charge of approving the requirement, checking it's cost, leading the financial negotiations, ToT etc. But it is always the military who will choose which weapon they want. They test it, and give the results to the MoD. Say, Navy tested both Rafale and F18, and found them both viable, and MoD chose Rafale based on the cost. Same for MMRCA where IAF chose both Rafale and EF.

So in a nutshell, Armed forces have mostly the positive powers while MoD has the negative powers to cancel the procurement or not approving it. But without the go ahead from the military, nothing can be procured.

Having said that, the top leadership is selected by the Ministry Babus or politicians. They in turn select most of the officers below them. And also control the postings. So if a Minister or MoD babu wants something cleared, they can get it done one way or the other.

 

[Avada kedavra]

There is no one person who has the final say. It's a system where different people have different responsibilities. (I might use the term army and military interchangeably) The army always initiates the process. So without them, no one can initiate it. Someone else might cancel it but can't initiate it. So that power remains with them. Then, it varies based on the mode of procurement and the size. Some items can directly be purchased by the military (emergency procurements, for example), while some items have to go up the chain. If it goes up the chain, then the civil side is always in charge of approving the requirement, checking it's cost, leading the financial negotiations, ToT etc. But it is always the military who will choose which weapon they want. They test it, and give the results to the MoD. Say, Navy tested both Rafale and F18, and found them both viable, and MoD chose Rafale based on the cost. Same for MMRCA where IAF chose both Rafale and EF.

U didnt give such indepth explanation before.

But the babus should have no right to select the military leadership. They neither have the technical expertise nor they r the ones fighting on the frontline. Nor are they elected by the people.

Also, its only the army chief that is selected by politicians. Rest are ll selected on merit. How can those be influenced?
How does this lead to india relying on russian junk for so long.

 

[Akshat]

U didnt give such indepth explanation before.

But the babus should have no right to select the military leadership. They neither have the technical expertise nor they r the ones fighting on the frontline. Nor are they elected by the people.

Also, its only the army chief that is selected by politicians. Rest are ll selected on merit. How can those be influenced?
How does this lead to india relying on russian junk for so long.

It's a civilian run government, isn't it? The politicians are the overall masters, who select the top babus, who in turn select the lower babus. The top boss is the PM, who is elected (by the MPs), and second top boss is Minister of Defense, who is also elected or at least chosen by the people.

And yes, other officers are not directly elected by the politicians or babus. But who will be posted in the procurement department and who will be looking after the camels for the republic day parade is decided by the top leadership of MoD, no?

As for Russian junk, again I have explained it before. It was because of a number of factors. West quickly chose Pakistan as their ally as Nehru ji wasn't willing to align with them. That in turn meant little money to buy expensive western weapons. And US was particularly not willing to give us the weapons. Certain reports from the 60s tell us that US wanted to arm India after the 1962 war, but didn't wanna do it directly as it didn't wanna alienate Pakistan. So they encouraged Europe to do it. We did buy a lot of European tech in that era. That also led us to the Soviets as Europe itself wasn't enough. And then came Indira ji, who was a hard core socialist and wanted to almost be an ally of USSR. I have read reports that say IAF wanted Mirages in that era (70s and 80s) but GoI told them to buy Mig 29s instead). So it was again not just one factor but multiple factors.