Washington shows how big purchases can be done in a transparent manner

The United States on Tuesday announced the contract for building the next generation long-range strike bombers at a whopping $55 billion (Rs.3,57,500 crore), providing a stunning contrast to the way India has gone about concluding the purchase of Rafale fighters from France.

Pentagon selected the U.S. defence major Northrop Grumman to build a fleet of stealth bombers that can strike deep inside enemy territory with nuclear bombs, and will replace the fabled B-52s, B-1s and B-2s. It is the biggest military contract anywhere in the world, and will result in the building of 100 new-age bombers that will begin entering service from 2020.

The way U.S. military authorities went about selecting the new generation bombers is an instructive manual for the way big spending military purchases are carried out in a transparent system. And it provides comparative frames to understand why the proposal to purchase 36 Rafale fighters from France, announced by Prime Minister Narendra Modi when he was in Paris in April, has not fully satisfied any of the players involved in the deal.

The IAF says the numbers are not enough, and many in the force also foresee the possibility of the two Rafale squadrons ending up being a heavy burden on the budget of the Air Force. The French side feels the Indian bargain to give the same rates they quoted for MMRCA — the original contract for 126 fighters — and a 50 per cent offset in an off-the-shelf purchase, are not justifiable.

The very announcement of the 36 Rafale purchase in Paris was almost abrupt, and the Air Force was left with a fait accompli, according to several sources. “The projection was for 126 fighters, the present number was thrust upon the IAF,” one senior officer, who had been involved in formulating the entire MMRCA proposal for 126 fighters, said. IAF chief Arup Raha admitted as much in recent weeks. “I cannot say I only want Rafale. I want the capability of Rafale-type aircraft. So, the government will have a look at it and based on urgency and the type of contract signed with Dassault Aviation, further decisions may be taken by the government. I cannot predict,” Air Chief Marshal Raha said, admitting that the IAF needed much more than just 36 fighters.

Another source said that the government did not “pay much attention to the customer’s (IAF) requirements.” He said the move could have long term repercussions—on the mix of fighters IAF would have for decades to come, expenses involved in maintaining the fleet, and ambitions about developing an indigenous aerospace industrial base.

The U.S. contract for the 100 bombers was awarded to a domestic company, ensuring that the technology and investment stayed within the national boundary, while protecting the classified nature of the programme. The selection came after a fierce competition between Northrop Grumman on the one side and a joint proposal from Boeing and Lockheed Martin.

Details of how Pentagon ensured that the programme remained within the budget and timeframe and met the requirements of the user provide valuable lessons for India. And a telling commentary on how to conclude a big ticket military contract.

The U.S. Air Force had a special team of acquisition officials, called the Rapid Capabilities Office that handled the programme. They ensured that new requirements do not creep in occasionally and unnecessarily balloon the cost and timeline. The B-2 bomber had itself reflected many of those failures—originally, the projected requirement was 132, but the Pentagon ended up buying just 21.

The project team also worked closely with the industry to finalise the design and other requirements.

One of the most noticeable aspects is that the future bomber would integrate several existing technologies, so as to reduce the cost and time needed to complete the project. Officials also made it public that the fleet was designed in such a way that it could be upgraded to keep up as threats evolved and technology changed.

“We have wavered so much in our strategy to acquire an MMRCA. What started as a proposal to buy more Mirage-2000 emerged into MMRCA contract for 126 fighters, but has now ended up being just 36 fighters,” one Indian officer summed up. “In some sense, I get a feeling that we are back to doing something like the Mirage-2000 deal,” another officer who was involved in the Mirage-2000 acquisition in the 1980s, said.