Military Intelligence paid hundreds of crores of rupees for outdated software, documents obtained by “The Hindu” show

The Indian Army's imagery interpretation capabilities, critical to providing information on the locations of enemy troops and their military assets, have been compromised by flawed contracts placed with a company that has failed to provide critical software upgrades, an investigation by The Hindu has found.

Documents obtained by The Hindu from the Ministry of Defence show that the firm responsible for supplying and integrating software used in critical image intelligence analysis was relieved of its responsibility to provide free upgrades in 2008 — and is now on the verge of receiving a Rs.165-crore contract for the supply of software it may no longer have licensing rights for.

MI17 — the super-secret military intelligence department that analyses data provided by India's spy satellites — relies on software provided by global software giants Intergraph, Oracle, and Bentley.

Rolta, an Indian company, supplied photogrammetry and geographical information system software licensed from these firms to the Army in 1996, integrating them into a single package to meet MI17's specific needs. From then to 2008, things went well — when a new contract for 14 photogrammetry and geographical information system packages came up to be signed.

The earlier contract bound Rolta to provide software “updates and upgrades” free of cost, as part of a maintenance contract. In 2008, though, the phrasing was changed to just “updates”— freeing Rolta of the obligation to provide the most recent software released by the original equipment manufacturer.

Rolta was paid Rs.506.45 crore for equipment purchased between 1998 and 2008. In addition, it received annual maintenance contracts for equipment purchased during this period; as of December 2008, their cumulative value was Rs. 40.66 crore per annum.

But by early this year, highly-placed military sources said, MI17's image-processing speeds had fallen to just a seventh of those being obtained by the National Technical Research Organisation, which also analyses the same data using similar software with the latest upgrades, Intergraph-Erdas.

Dubious negotiations

The records of the contract negotiation committee, or CNC, show a series of questionable decisions led to this outcome. In the fourth meeting of the CNC, one member noted that an odd change had been made to the name of the software being supplied to MI17: “the vendor,” he observed, “had added [the] company name ‘Rolta' in all the software being provided by him.” The change of name implied that the equipment being supplied was not the same as was purchased in 1996, which would have necessitated fresh acquisition procedures to be initiated.

Atul Tayal, Rolta's representative, responded in the fifth meeting of the CNC that only the brand name was changing — not the equipment itself. During Rolta's “association with the Indian Armed Forces over more than one decade,” he said, “the company had developed a number of customised modules specifically designed to address the needs of the Military Intelligence Directorate.”

“These customised modules,” he wrote, “are integrated with the basic equipment and supplied to the user. Due to this the company has decided to supply these equipments [sic.] under the brand name of Rolta India Limited after the necessary approval of M/S Intergraph, USA, and other parties.”

The CNC guarded its flanks, the minutes of its fourth meeting show, with its chairman insisting that “a certificate from the vendor be obtained certifying that software offered in the present and previous contract are the same.” It was further directed, the minutes record, “that adequate provisions will be made in the contract to confirm the fact at PDI [pre-delivery inspection] and ATP [acceptance test procedures] stage.”

In a September 2010 letter, Rolta certified it would “have full guarantee and warranty from Intergraph Corporation with respect to the goods sourced from them for IIT [imagery interpretation team] equipment under replacement.” The certificate was signed by Brigadier Anjum Shahab, the Regional Director of Defence Sales for Rolta – and the same individual who, as Deputy Director General of Military Intelligence in 2008, served on the controversial CNC.

The actual “full guarantee and warranty” from Intergraph was never provided, for the simple reason that the 2008 contract did not call on Rolta to hand it over. From other documents, however, it seems apparent that no such guarantee actually exists. In a letter to the Defence Secretary, written on July 8, 2011, Intergraph said it had “reliably learnt from a number of Ministry of Defence officers that the Indian Army may have been supplied Intergraph GIS software under a different name.”

It asserted that Intergraph had at no point authorised anyone “to customise any of the products and/or to sell the Products under the name and/or branding of the Distributor or any other company.” Put simply, that meant Rolta had no rights to license Intergraph software to the Army — and that Intergraph would not, therefore, supply the periodic upgrades that came with the package.

Nonetheless, the Indian Army is now firming up plans to purchase another Rs.165 crore worth of equipment from Rolta. MI17 sources said no fresh procurement procedure will have to be carried out because the vendor continues to be Rolta — even though its elements are likely to be assembled from modules supplied by a Canada-based software company, PCI Geomatics.

More than half the cost of the new order, sources said, is made up of software giving capabilities that MI17 would have had anyway, if upgrades had been obtained since 2008. Documents available with The Hindu also reveal that the Planning Officer of the Directorate of Planning and Coordination, Department of Defence Procurement, had written a letter on November 17, 2009, recommending that fresh “equipment may be procured through competitive bidding.”

Indian Army officials declined to discuss the contract on record, or to discuss specifics. However, a high military official who briefed The Hindu on condition of anonymity said that while he was aware of complaints about Rolta, they were “being made to malign the operational efficiency of the Army.” He noted that Rolta was not obligated to give upgrades, but did not explain why the 2008 contract, and subsequent ones, had relieved it of its earlier obligation to provide them. For its part, Rolta also pointed out that it had met its contractual obligations. In an e-mail to The Hindu, Rolta said it had “provided all deliverables it has been contracted to under various agreements with MoD.” In response to a question on whether they had permission to supply Intergraph software, Rolta said the equipment it had supplied was delivered “in line with their respective end-user licences.” Mr. Atul Tayal told The Hindu that the allegations “are absolutely baseless and seem to have been made with mala fide and motivated”.