Amit Cowshish is a former Financial Advisor (Acquisition), Ministry of Defence and Consultant, Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Click here for Detailed Profile
Although the new measures announced to fast-track the defence sector are significant, they do not add up to a comprehensive and overarching reforms package.
Inclusion of new clauses in the draft DPP-2020 and changes made in some of the existing ones are intended to make the SCD more comprehensive. However, there is a scope for bringing about textual clarity in the new as well as some of the existing clauses of the SCD, especially those which have been modified.
Redrafting the chapter on post-contract management, expatiating the concept of contract operating officers and clearly defining their role and responsibilities vis-à-vis the other agencies, could go a long way in serving its purpose.
It would be advisable to review the proposed offset guidelines keeping in view the feedback from the industry, especially the foreign vendors who carry the primary obligation to execute the offset contract, as also the legacy issues.
Given the rapidly rising pension liability in India and the concern expressed by the CDS, the experiences of the US and the UK could be useful in carrying out pension reforms in India.
Considering the impending financial crunch due to the Covid-19 pandemic and uncertainty about allocations in the coming years, it is unlikely that the MoD will be able to launch many new procurement programmes under the new DPP any time soon.
The present crisis is as much of a challenge as an opportunity to infuse financial realism in defence planning and bring about concomitant reforms in the quickest possible timeframe.
Draft DPP-2020 marks a paradigm shift from the past in many respects. It contains several new features intended to hasten the procurement process and provide a further fillip to the Make in India initiative in defence.
There is a need to act quickly on the issue of force majeure to scotch all speculations about how the MoD is going to deal with the inevitable delay in performance of contracts and instil confidence among the vendors.
Expediting Negotiation in Defence Contracts
Finetuning negotiation protocols and limiting the scope of negotiations could result in rapid conclusion of negotiations and contract finalisation.