Of Matters Military. Mrinal Suman
from/for a particular product or service and must result in procurement of the items that best meet the requirements of the forces.
It may not be viable for all vendors to produce a complex and costly equipment precisely customised for unique requirements, within limited time and in limited numbers, for assessment and evaluation at Field Evaluation Trial (FET) stage. Hence, SQR parameters have been further sub-classified as Essential Parameters–A and Essential Parameters–B. This aspect has been discussed at length subsequently.
Short-listing of Vendors
Once SQR have been finalised, the sources of procurement of the weapon system/stores shall be ascertained and short-listing of the prospective manufacturers/suppliers carried out by SHQ. The short-listed vendors will be OEM or authorised vendors or export agencies authorised/sponsored by foreign governments. Technical Managers may increase the short-listed vendor base, based on vendor capability. Keeping the security and other relevant aspects in view, appropriate publicity may be given to the proposed procurement with a view to generate maximum competition.
Acceptance of Necessity
For obtaining Acceptance of Necessity (AoN), SHQ would prepare a Statement of Case (SoC) and draft Request for Proposals (RFP). SoC will include assessment of the acquisition category against the specified defining attributes. SoC will specify total quantities required, break-up based on five years plans and the quantity that is required to be procured in the next two years. SoC, with comments of all agencies, would be placed for consideration of the Categorisation Committees, who will submit its recommendations to the AoN according authority.
Cases in which ToT is being sought, the appropriate production agency would be approved by the AoN according authority based on the recommendations of the Categorisation Committee. The production agency could be selected from any of the public/private firms including a joint venture company.
Cases in which the total requirement of equipment/weapon system is spread over two or more plan periods, AoN will be processed for the entire quantity, clearly indicating the quantities sought during various periods/ stages. AoN once accorded will be deemed to be valid for the subsequent procurements also; however, quantity vetting would be done at each subsequent stage.
RFP
RFP will be a self-contained document that will enable vendors to make their offer after consideration of full requirements of the acquisition. In cases where ToT is involved, the RFP would include the requirement for indigenous manufacturing as well. RFP should spell out the requirements of ToT in scope, range and depth of the technology required.
Solicitation of offers will be as per ‘Single Stage – Two Bid System’. It will imply that a single RFP would be issued soliciting both the technical and commercial bids together, but in two separate and sealed envelopes. Bids/ responses shall be accepted only from those to whom RFP has been issued.
Technical Evaluation
A Technical Evaluation Committee (TEC) will be constituted by SHQ for paper evaluation of the technical bids received in response to RFP. It will include representatives of the user service, maintenance agency and representatives of quality assurance. TEC will examine the extent of variations/differences, if any, in the characteristics of the equipment offered by various vendors with reference to SQR and prepare a Compliance Statement. Non-compliance of vendors to any of the required provisions would lead to rejection of the bid at this stage. TEC may invite the vendors for technical presentations/clarifications on technical issues. The Acquisition Wing will formally accept the report of TEC.
Trials
After the acceptance of TEC Report by the Acquisition Wing, all selected vendors would be asked to provide their equipment for trials in India, except when trials are to be conducted at vendor premises. FET will be conducted by the user service on the basis of the trial methodology given in RFP. Methodology for evaluation of each parameter should be clearly detailed in the RFP, so that the vendors fully understand its implications. FET will normally be conducted on ‘No Cost No Commitment’ basis.
Staff Evaluation
Staff Evaluation will analyse FET results and shortlist equipment recommended for introduction into the services. Staff Evaluation Report will be approved by SHQ and forwarded to the Acquisition Wing for acceptance. In case no vendor meets SQR, the case would be foreclosed and a fresh RFP issued after reformulating SQR. Vendors will be informed about the results of trials and evaluation, along with reasons for disqualification.
In a case where bids had been submitted by more than one bidder in a competitive manner and the Staff Evaluation after trials shortlists only one equipment for introduction into service, it would not be considered as a single vendor situation. For, as the techno-commercial offers were received before the trials, the commercial bids were competitive in nature. In other words, bidders had submitted their offers in an open competition and were not aware of any single bidder getting approved after the trials.
Technical Oversight Committee
For expert oversight over the technical evaluation process, the Acquisition Wing will constitute a Technical Oversight Committee (TOC) for all acquisition proposals in excess of Rs 300 crores and for any other special case. TOC will comprise of three members drawn from a standing panel of specialists. It will be tasked to see whether the trials, trial evaluations, compliance to SQR and selection of vendors were done according to the prescribed procedures. It will have to give its observations and recommendations, based on a majority decision, within 30 days, which may be extended by a maximum period of 15 days, with the consent of the Defence Secretary.
Commercial Negotiation Committee
After the acceptance of Staff Evaluation Report and TOC Report (where applicable), a Commercial Negotiation Committee (CNC) will be constituted. Initial activities of CNC shall include establishing a benchmark for the reasonableness of price in an internal meeting before opening the commercial offer. The sealed commercial offers of the technically accepted vendors shall be opened by CNC at a predetermined date and time under intimation to vendors, permitting such vendors or their authorised representatives to be present.
A Compliance Statement incorporating the commercial terms offered in RFP and those sought by the vendor(s), analysis of the discordance and the impact of the same will be prepared. A similar statement would be prepared in regard to deviations noticed in the delivery schedules, performance-cum-warranty and guarantee provisions, acceptance criteria and Engineering Support Package.
CNC would prepare a Comparative Statement of Tenders with a view to evaluate the technically acceptable offers and determine the lowest acceptable offer (L1 vendor). Once the commercial offers are opened and the quote of L1 vendor is found to be within the benchmark fixed in the internal meeting, there should be no need to carry out any further price negotiations.
CNC Report, along with the summary of recommendations, would be processed by the Acquisition Manager for obtaining expenditure clearance and CFA approval. Consequent to the approval of CFA, the contract would be signed by the Acquisition Manager/Director (Procurement) concerned in the Acquisition Wing. While responsibility for contract administration and management would be that of SHQ concerned, post-contract monitoring would be conducted by the Acquisition Wing.
Major Changes
Whereas the basic format of making defence procurements remains unchanged, a number of major changes have been made with a view to promote indigenous industry, in line with the government’s mission ‘Make in India’. The important ones have been recapitulated here.
New Category of Buy (Indian-IDDM)
First priority in all future defence procurements will be accorded to the products that have been designed, developed and manufactured indigenously. The product must meet the laid down criteria of IC. However, the onus of proving that the equipment design is indigenous rests with the vendor and such vendor claims will be verified by a committee comprising