india

Updated: Feb 14, 2019 11:53 IST

If a cat has nine lives, the Rafale jets deal has at least seven.

The aircraft manufactured by Dassault Aviation came dangerously close to being ejected from the Indian Air Force’s (IAF) fighter jet competition on multiple occasions during technical and price evaluation stages between 2004 and 2015, according to an audit report on capital acquisitions by IAF, only to claw its way back each time.

The technical evaluation committee (TEC) first rejected the Rafale aircraft in May 2008 after it could not meet nine Air Staff Qualitative Requirements (ASQRs) laid down in the tender for 126 jets and the French plane maker did not furnish data on engineering support package and the manufacturer recommended list of spares, the Comptroller and Auditor General (CAG) said in a report tabled in Parliament on Wednesday.

Of the six jets evaluated, only the MiG-35 met all technical parameters. The other four aircraft in the fray — F-18, F-16, Gripen and Eurofighter -- had one or two deviations.

At this stage, the Technical Manager (Air) , or TM (Air), which oversees technical aspects of air acquisitions, raised questions on non-compliance of various aircraft with the ASQRs and asked TEC to review its evaluation. After obtaining clarifications from the vendors, the committee, in March 2009, upheld its technical evaluation and rejected Rafale for a second time, the CAG report said.

Watch: Two Rafale jets arrive in Bengaluru for Aero India show

Later that month, TM (Air) sought further clarifications on the warranty and option clauses of the bids submitted by the foreign military contractors. After the vendors gave their explanations, TEC reviewed its report and upheld its decision to reject the bid of Dassault for the third time on March 25, 2009, the auditor said.

It was at this point that Dassault offered to make modifications to its plane to meet six of the nine parameters it failed to qualify on, and also proposed to submit an additional commercial proposal to make the changes, the report noted. The firm said the Rafale was made to NATO specifications and had to be customised to meet IAF’s needs. The CAG report said though the Rafale jets could not meet three of the qualitative requirements, Dassault agreed to supply the manufacturer-recommended list of spares data and engineering support package.

“However, it still did not comply with the warranty and option clauses specified in the RFP,” the report said. This led to the ministry rejecting Dassault’s technical bid for the fourth time. Simultaneously, a case was put up before the defence minister for a waiver of some non-compliance with the ASQR in the bids of European Aeronautic Defence and Space Company (Eurofighter), Lockheed Martin (F-16), Boeing (F-18) and Saab (Gripen).

Four lives gone, but Rafale was still in the game.

Read more| CAG report on Rafale highlights the flawed process

The following month, in April 2009, the ministry received a suo motu representation from Dassault for the reconsideration of its proposal, stressing that it was willing to modify the aircraft to meet all the qualitative and RFP requirements. On May 13, 2009, TEC recommended that the revised technical proposal of Dassault met the RFP requirements.

The audit found that the opportunity provided to Dassault to significantly modify its technical and price bids violated the defence procurement procedure (DPP), even though the ministry said it was approved by the defence acquisition council. “Dassault was allowed to bring about enhancements of 14 parameters …Hence, Dassault was treated preferentially,” the report said, adding that this was a violation of procedure.

It further said that the acceptance of commercial proposal after bid submission date for capabilities was “unprecedented and against the canons of financial propriety.”

More was to come.

During field evaluation trials, Eurofighter and Rafale were cleared based on their presentation in the lab as to how they proposed to meet the entire set of ASQR, the report said. “Therefore, the aircraft were technically accepted without evaluating the significant enhancements made on them”. They shouldn’t have been, so this techniocally counts as a fifth life.

The remaining four planes were rejected.

Read more| CAG points to flaws in defence procurement

CAG report said the commercial offers of Rafale and Eurofighter -- the bids were opened in 2011 -- were non-compliant with the RFP and liable for rejection as non-responsive bids during price evaluation. It said the prices offered by the two vendors were not “firm and fixed” and were subject to escalation. “It was specifically mentioned in the RFP that the submission of bids in incomplete format would render the offer liable for rejection,” the report said. Both bids should have been rejected but neither was; this was Rafale’s sixth life.

Experts maintained, however, that the Rafale and Eurofighter jets were better than the others in the fray. “There may have been technical and pricing issues at different stages but Rafale and Eurofighter are of new generation jets and superior in capabilities to the other planes that took part in the contest,” said former Western Air Command chief Air Marshal PS Ahluwalia (retd).

According to CAG, the defence ministry set up a panel in June 2012 to examine different aspects of the deal. In its report submitted on March 27, 2015, the panel said Dassault was non-compliant with the RFP and its proposal should have been rejected at the TEC stage. It added that Dassault’s price bid was non-compliant and the determination of L1 (lowest bidder) was faulty. It said Dassault wasn’t L1 and the contract could not be concluded with it.

The audit found Dassault’s bid wanting on several counts – it did have the cost breakdown of the seven mandatory components to determine life-cycle cost and did not quote capital expenditure for licensed production of fighters in India. “Parity was not maintained in evaluation of Dassault and EADS bids on the element of direct cost of acquisition,” the report said.

This was the seventh life.

A month later, India and France announced the government to government deal wherein the former would buy 36 fighters in flyaway condition. The aircraft chosen was the Rafale.

Read more| Basic jet price same in both NDA, UPA deals