Defence Minister Manohar Parrikar has scrapped a controversial Army deal worth around Rs 1,000 crore to procure 45,000 rifles amid allegations of corruption in the acquisition process.

The potential deal fell under scrutiny over the possibility of favours being given to Israeli firm, Israeli Weapons Industry, over its other rivals in the deal.

The tender for the rifles was issued in 2010 in which 44,600 close quarter carbines (rifles) were to be provided to the infantry units for combating terrorists in close fights.

Defence Minister Manohar Parrikar has scrapped a controversial Army deal worth around Rs 1,000 crore to procure 45,000 rifles amid allegations of corruption in the acquisition process

Twenty-eight companies had shown interest in the tender but ultimately after only the Israeli firm was left as ‘single vendor’ in the race for the coveted contract.

A senior Defence Ministry official told Mail Today: "The tender has been scrapped after deliberations with all stakeholders and legal advice. The Army has been asked to restart the process to buy the guns”.

“The process for acquiring the guns may have been affected but there will be zero tolerance for corruption,” the official added.

Twenty-eight companies had shown interest in the tender but ultimately after only the Israeli firm was left as ‘single vendor’ in the race for the coveted munitions contract

Though the Defence Ministry allows single vendor cases to be carried through, but it generally prefers only multi-vendor cases at the final stages to reap benefits in terms of cost due to competition.

The Ministry has now asked the Army to restart the tender under fast-track procedure, but Parrikar has made it clear that the next tender should also be a multi-vendor procedure, sources revealed.

The deal had come under cloud after Union minister Rao Inderjit Singh expressed doubts over the process of selection of the Israeli gun at the Defence Acquisition Council meeting in June.

During his stint in the Defence Ministry, the minister had also sought a CBI probe into the deal.

After objections were raised about the tender process, Parrikar had held meetings with all stakeholders including secretary, defence production, Ashok Gupta; director general, acquisition, Smitha Nagaraj; Army deputy chief Lt Gen.

The potential deal fell under scrutiny over the possibility of favours being given to Israeli firm, Israeli Weapons Industry (pictured), over its other rivals in the deal. The tender for the rifles was issued in 2010 in which 44,600 close quarter carbines (rifles) were to be provided to the infantry units for combating terrorists in close fights.

Subroto Raha and other senior officers to find out a way to go ahead with the ongoing deal, but it did not yield results.

In the initial phase of procurement, the Army had sent the Request for Information to 28 companies and after getting responses, the Request for Proposal was sent to five firms.

“At the trial stage of the competition, just two companies - Italian Beretta and Israeli Weapon Industry - were left. The Galil ACE CQB carbine was offered by IWI while Beretta had offered its ARX160 model,” the official said.

Sources said the Directorate General of Quality Assurance rejected Beretta because a safety measure on its laser sight was found unsuitable.

The night sight by Beretta, widely used in the US, was fitted with a small screw, which needed to be opened before use. This screw dropped off during trials resulting in its rejection, and subsequently the ‘single-vendor’ situation.

The Ministry has now asked the Army to restart the tender under fast-track procedure, but Parrikar has made it clear that the next tender should also be a multi-vendor procedure, sources revealed

The tender called for night-vision sights to be fitted onto the “Picatinny rail”- a standardised bracket - on the top of the barrel.

Since no munitions manufacturer makes night sights, it was suggested to keep options open.

The global tender for the carbines was issued with the option to get transfer of technology to build another 1.2 lakh such carbines by the Ordnance Factory Board.

Beretta offered its ARX160 model but it didn't work well with night vision

Defence sources said it needs to be clarified as to why such a deal was allowed to progress when several three-star and two-star rank officers were involved in supervisory role.