Responding to Rahul Gandhi’s accusation that she was lying about procurement orders worth Rs 1 lakh crore for HAL, Nirmala Sitharaman had said that contracts worth Rs 73,000 crore were in pipeline and those worth Rs 26,570 crore already placed

The contracts worth Rs 73,000 crore are for 200 Kamov 226T choppers for the Indian Air Force and army, 83 LCA Mk 1A aircraft for the IAF and 15 light combat aircraft for the IAF and the army

Big-ticket military orders worth around Rs 73,000 crore to Hindustan Aeronautics Limited (HAL) that have been at the centre of a battle between Congress president Rahul Gandhi and defence minister Nirmala Sitharaman are in an early stage.

Responding to Gandhi’s accusation that she was lying about procurement orders worth Rs 1 lakh crore for aerospace major HAL, Sitharaman said on Sunday that contracts worth Rs 73,000 crore were in the pipeline and those worth Rs 26,570 crore, already placed.

The minister clarified that the contracts worth Rs 73,000 crore were at the technical evaluation stage. The technical evaluation stage is the first step in the weapons procurement process after the request for proposals, said two defence ministry officials on condition of anonymity. According to the defence procurement procedure, six more critical stages have to be crossed before a contract is finally awarded.

The contracts worth Rs 73,000 crore are for 200 Kamov Ka-226T choppers for the Indian Air Force and army, 83 TEJAS Mk1A aircraft for the IAF and 15 light combat aircraft for the IAF and the army. Currently, the technical offers submitted by HAL for these aircraft are being evaluated by the defence ministry’s technical evaluation committee (TEC).

The TEC report should ideally be completed with 10 weeks as prescribed under government rules, and it has to be accepted by the Director General (Acquisition) in another four weeks. Field trials of the equipment can begin only after the TEC report has been accepted. The Defence Procurement Procedure dictates that the field evaluation by the user service on the basis of standard operating procedures has to be completed in 16 to 24 weeks. The field trial team confirms if the platform that meets the service’s requirements.

“If you go strictly by the timelines under the rules, a contract should be signed in two to three years. But pick up any military procurement and you will find no contracts are signed in the prescribed time frame. There are delays at every stage,” said a senior IAF officer who did not wish to be identified. Delays are often attributed to cumbersome rules, services changing their requirements and paucity of funds even when contracts are to be awarded to public sector firms.

Field trials will be followed by staff evaluation that should ideally take only four weeks. The staff evaluation analyses the field evaluation results and recommends the equipment for induction into the armed forces. The next critical stage of acquisition is scrutiny by the technical oversight committee (TOC), constituted by the defence secretary. The TOC is expected to take four more weeks to scrutinise the procedure and ensure that trials were done according to prescribed rules. Commercial negotiations kick in after the technical oversight is over.

The timeline for finalisation of the contract negotiation committee (CNC) is 18 to 26 weeks, according to rules. The CNC, headed by joint secretary-rank acquisition managers, recommends conclusion of a contract at a negotiated price. However, commercial negotiations can take much longer. After the cost is settled, approval has to be sought from the competent financial authority, a stage that should ideally take four to 16 weeks. This would pave the way for the signing of a final contract. The contracts worth Rs 26,570 crore that HAL has won in the last five years include orders of Dornier-228 planes, helicopter and aircraft engines. These orders are in different stages of execution and deliveries are expected to be completed between 2019 and 2022.