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DECEMBER-2012 ISSUE
Guest Column - Force Magazine
Right Switch
There is a need to graduate from procurements to acquisitions
 
By Maj. Gen. Mrinal Suman (retd)
Ministry of defence (MoD) considers acquisitions to be synonymous with procurements. Both the terms are regularly used in a transposable manner as if they mean the same. Unfortunately, this paradox has been a major factor that has been impeding the growth of India’s defence industrial base.

Due to the complexities of the defence systems, their acquisition entails accomplishment of activities related to analysis, design, development, test, production, sustainment, modification and disposal. Further, the activities have to be carried out in a concurrent and well-synchronised manner to satisfy the users, save time and incur least expenditure. On the other hand, off-the-shelf procurement is a much simpler process.

India Has No Acquisition Procedure
Procurement, and not acquisition, has been India’s preferred method. Whereas India has a detailed Defence Procurement Procedure (DPP) which is updated at regular periodicity, it is highly incongruous that no need has ever been felt to evolve an acquisition policy and promulgate necessary procedure. Inexplicably, DPP declares that it covers all cases of capital acquisitions. Thus, most acquisitions have been reduced to simple procurements.

Proposals containing demand for new equipment are initiated by the Service Headquarters (SHQ) and are debated at length by the Categorisation Committee at the Headquarters Integrated Defence Staff (HQ IDS) to recommend the route to be adopted. Every proposal is categorised as per the projected urgency of equipment, total quantity demanded, indicative cost and nature of technology involved. The Defence Acquisition Council is the overarching authority that accords final approval as regards the route to be followed for fulfilling the demand of the services.

DPP specifies three basic routes for obtaining defence equipment, i.e. ‘Buy’, ‘Buy and Make’ and ‘Make’. Whereas ‘Buy’ means outright purchase of the complete requirement; ‘Buy and Make’ implies purchase of part requirement from a foreign vendor and production of the balance quantity under licence in India; and ‘Make’ denotes indigenous development of the equipment to meet the complete requirement. As is evident, ‘Buy’ and ‘Buy and Make’ are pure procurement mechanisms and entail purchase of off-the-shelf equipment from Indian and foreign vendors. See Illustration 1.




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