Pricing

Delivery

Gaurantee

Technical evaluation

About CAG

(With agency inputs)

Read the story in Bengali

Read this report in Marathi

* The inter-governmental contract for Rafale was 2.86 per cent lower than the earlier aligned price.* The CAG rejected defence ministry's argument that 2016 contracted price of 36 basic flyaway aircraft was 9 per cent lower than the price offered in 2007.* The contract for Rafale consisted of six different packages with a total of 14 items. The contracted price of seven items was higher than the aligned price, the price at which the contract should have been signed.* Three items, including basic aircraft, were procured at the same price. Four items were purchased at lower than the aligned price.* The delivery of the aircraft would be faster by a month in the current IGA as compared to what the timelines could have been if the old contract was signed. In the 2007 offer, India specific enhancements were to be integrated on the delivered aircraft and would have been ready in 72 months while in the 2016 contract, it would be ready in 71 months.* In the 2007 offer, 18 aircraft were to be delivered by 50th month of signing the contract. The next 18 were to be licensed produced in HAL and to be delivered from 49 to 72 months of the contract signing. However, in the 2016 contract, the first 18 aircraft would be delivered between 36 to 53 months after signing of IGA and the remaining 18 to be delivered by 67 months.* On the advice of the law ministry, the MoD had sought sovereign guarantee from the French government. However, the French government gave only a 'Letter of Comfort'.* The MoD had sought opening of an Escrow account to manage the payments as a measure of safeguard. However, the French side did not agree.* CAG said in the previous offer of 2007, Dassault Aviation had provided performance and financial guarantees which was about 25 per cent of the total value of the contract.* The vendor had embedded the cost in its bid price. But in the 2016 contract there are no such guarantees or warranty. This led to saving for Dassault Aviation which was not passed on to India.* Four of the Indian specific enhancements were not needed at all because in the technical evaluation of 2010, the IAF had pointed out these were not needed.* However, they got included in the scope, despite IAF making several attempts to reduce these items.* IAF did not define the Air Staff Qualitative Requirements (ASQRs) properly. As a result none of the vendors could fully meet ASQRs.* ASQRs were changed repeatedly during the procurement process which created difficulties during technical and price evaluation, and affected the integrity of competitive tendering.* It was also one of the main reasons for delays in the acquisition process.* The objectivity, equity and consistency of technical evaluation process was not evident in the technical evaluation report.* The vendor response to solicitation of offers was low, which restricted competition.* The federal auditor has taken more than a year-and-a-half to review the Rafale deal and has gone into its pricing, request for proposal received from competitors, and also analysed comparative pricing of other fighter jets available globally.* The CAG's is a standalone one on all offset deals of the MoD of the past five years, a draft report of which has already been sent to the government for its response. However, the report may not be finalised before the general elections.* The report on the offset deals, being prepared separately, includes the review of offset agreements in the Rafale deal where the opposition had raised objections of favouring Reliance of the Anil Ambani group, which is a key offset partner of Dassault Aviation in the Rafale deal.