Hard Landing

So you are entrusted with the task of procuring the new helicopter fleet for the VVIP (the actual phrase used in the report) of India.

Firstly, who are the VVIP – essentially it is the President, Vice President and Prime Minister of India.

Perhaps McLeod Governance is naive but one would have assumed that if you are seeking to procure anything for that small but important constituency you would make all efforts to not only get it right but be seen to get it right.

Alas the Auditor General of India in a recent report thought otherwise:

It was observed that the entire process of acquisition of VVIP helicopters right from framing of Services Qualitative Requirements (SQRs) to the conclusion of contract deviated from the laid down procedures.

The process of framing and revision of SQRs not only limited the number of successful bidders but also resulted in operational disadvantage due to lowering of mandatory service ceiling. Even with the revision of the SQRs, the acquisition process again led to a resultant single vendor situation. The shortlisted helicopters were evaluated following different methodologies which did not give the desired assurance that equal opportunity was provided to the shortlisted vendors.

Field Evaluation Trials (FET) were conducted abroad on representative helicopters and not on the actual helicopter (AW-101) of AgustaWestland. Even at the stage of the FET, the helicopter offered by the company was still in its developmental phase.

Further, benchmarked cost was unrealistic and had no correlation with the estimated cost and the offered cost and thus could not provide a realistic basis for obtaining an assurance about the reasonableness of cost of procurement of AW-101 helicopters.

It was also observed that the past trend of low utilization levels of the existing fleet over a period of 11 years did not lend credence to the Ministry’s justification for additional procurement of four helicopters. Due to inordinate delay in finalizing the acquisition process, the Indian Air Force continued to face operational disadvantage with the existing helicopters.

In addition, it was observed that offsets were allowed in violation of the DPP.

The entire process of acquisition thus poses serious questions on accountability and lack of transparency in the finalization of contract, which need to be addressed.

And to put things in cost perspective – the acquisition project was worth 0.5billion euro.

This is a very well written but an incredibly damning report.

How could anyone seek to go about the procurement process in the way that is described on such an expensive and high profile project and not expect to be heavily critiqued is beyond our imagination.

But therein lies the beauty and the challenge of the career that we have all dedicated ourselves.

Why do none of us think that this is the last time we will see a report of this nature written?

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