Amit Cowshish is a former Financial Advisor (Acquisition), Ministry of Defence and a former Distinguished Fellow, Institute for Defence Studies and Analyses (IDSA), New Delhi. Click here for Detailed Profile
It is important to pay greater attention to the system of costing followed by the MoD given that costing errors could result in the sanctioning of an unaffordable procurement programme, contract being awarded at a higher price, cost and time overruns, and default on contractual commitments.
Mutual and shared interests between India and the US must form the basis of an enduring solution to the quandary presented by the provisions of the Countering America’s Adversaries through Sanctions Act.
The Cell will remain hamstrung if its powers are not clearly defined, especially in regard to securing budgetary support which is to be provided by the Director General of Quality Assurance.
Objectives and resources have to be in sync with each other and if adequate resources cannot be provided objectives have to be suitably recalibrated and alternative ways found to achieve them.
The challenge lies in demonstrating to potential importers that India, currently the world’s largest arms importer, has the capacity to manufacture and export the equipment required by their armed forces.
The promises contained in the recently released draft are so intertwined that a comprehensive action plan would be required to implement all of them almost simultaneously for achieving the policy objective.
The new system of classifying enterprises based on annual turnover will be more reliable, transparent and objective as the qualifying criteria will be verifiable with reference to the data available in the Goods and Services Tax network.
The benchmark price could be different from the initial cost estimate because, in many cases, the negotiation stage is reached several years after in-principle approval.
The Thirty-first Report of the Standing Committee on Defence (SCoD)1 was submitted to Parliament on 9 March 2017. The report examined the capital outlay for the defence services for the year 2017–18, procurement policy of the Ministry of Defence (MoD) and defence planning. A glance through the report showed that, apart from a rather sketchy analysis of these issues, the committee has only ended up making hackneyed observations and recommendations that have been made repeatedly in the past without much success.
Issues in Defence Costing
It is important to pay greater attention to the system of costing followed by the MoD given that costing errors could result in the sanctioning of an unaffordable procurement programme, contract being awarded at a higher price, cost and time overruns, and default on contractual commitments.