Simplify procurement process for the IAF to support its modernisation: CAG

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Published: February 13, 2019 6:56:21 PM

The auditor in its report has examined the system of capital acquisition has stated that for procuring highly technical products, use of the Best Value method or a quantitative assessment method may ensure better value for money.

Ministry of Defence, Life Cycle Cost , Air Staff Qualitative Requirements , CAG, indian air force, defence news, Lowest Price Technically Acceptable, Technical Evaluation Report,It has noted the IAF did not define the ASQRs properly, thus making it impossible for the vendors to fully meet the ASQRs which were constantly changed during the procurement process.

The Comptroller and Auditor General of India (CAG) has called for a simplified process of acquisition for the armed forces. The CAG report which was tabled in the Parliament today, while pointing out that the acquisition system is not able to effectively support the modernisation and operational preparedness of the Indian Air Force (IAF), has recommended that the IAF should improve its process of formation of Air Staff Qualitative Requirements (ASQR) to ensure that they correctly reflect the user’s functional parameters.

According to CAG, the Ministry of Defence (MoD) faced problems in realistically estimating the benchmark price, making it difficult to establish the reasonability of price. “This also caused delay in price evaluation and contract negotiations. The model used for calculating the Life Cycle Cost of acquisition had several deficiencies and needs to be fine-tuned and improved further,” it said.

The CAG also said there were several delays at various stages of the acquisition process. Against three years envisaged in Defence Procurement Process (DPP), four cases took more than three years and seven cases took more than five years to reach the contract conclusion stage.

According to the top auditor of the country the present Lowest Price Technically Acceptable (LPTA) method of bid evaluation wherein the contract is awarded to the lowest priced offer which is technically acceptable needs reconsideration.

The auditor in its report has examined the system of capital acquisition has stated that for procuring highly technical products, use of the Best Value method or a quantitative assessment method may ensure better value for money.

Also, to acquire the right product at the right price, it is essential that the qualitative requirement truly reflects the user’s functional need; maximum possible competition is generated, and technical and price evaluation is done objectively.

It has noted the IAF did not define the ASQRs properly, thus making it impossible for the vendors to fully meet the ASQRs which were constantly changed during the procurement process. “This created difficulties during technical and price evaluation and affected the integrity of competitive tendering which was also one of the major reasons for delays in acquisition process.”

“The objectivity, the equality and consistency of the technical evaluation process was not evident in the Technical Evaluation Report,” the CAG said.

Somehow the vendor response to solicitation of offers was low, which restricted competition, according to the report the number of vendors who responded to the Request for Proposal (RFP) was far less than those invited to bid. The Auditor has suggested to the Ministry of Defence (MoD) to revisit the entire process of acquisition to weed out redundant activities and simply the process. The acquisition wing, headed by Director General (Acquisition), was envisaged as an integrated defence organisation.

“Delays in acquisition were essentially due to a complex and multi-level approval process where objections could be raised at any stage,” the report said.

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