Defence Acquisition

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.

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.

The slowdown in economic growth not only seems to have cast its shadow on the allocation of the defence budget for 2020-21 but has also compounded the challenges for the country’s first CDS.

Considering that the defence capital expenditure already accounts for a very high share in the central government’s overall capital spend, any substantial hike in the former’s share looks less likely. This is more so given the government’s priority to spend on infrastructure and other non-defence capital assets to revive the economic growth.

There is a need to evolve a protocol for contract administration and post-contract management of all capital and revenue contracts awarded by various departments of the defence ministry and the armed forces.

The government’s decision to allow the private sector to undertake the development of complex defence equipment is a step in the right direction. It will help forge a larger innovation system to meet the diverse requirements of national security. However, caution may be required to avoid duplication of efforts and prevent indirect import.

The agile acquisition or C2D2 model currently under adoption by the US for its F-35 aircraft is likely to become a necessity for acquisitions in future, as disruptive defence technologies will continue to affect military systems across the world.

Implementing the outlined 27 reform measures in four broad areas – Planning, Defence Budget, Acquisition and Make in India – would strengthen defence preparedness and build a credible defence industrial base.

While the purpose of the Fall Clause, a price safety mechanism in rate contracts, is indubitable, some issues concerning its applicability and implications, both for the buyer and the seller, merit a review.