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CAG finds flaws in acquisition of Apache, Chinook helicopters

The Comptroller and Auditor General (CAG) has found certain flaws in the acquisition of Apache Attack helicopters for which the US supplied life-expire missiles and the heavy lift helicopter-Chinook in September 2015.

On the Apache attack helicopter, the Audit found that Request for Proposals (RFP) was issued to seven vendors and only three responded.

“All of them could not meet the full set of Air Staff Qualitative Requirements (ASQRs). The tender process was cancelled. The ASQR parameters which could not be met were charged/deleted and fresh tendering was done.

“If these ASQR parameters were not needed, they should not have been included in the first place,” it said.

After re-tendering, the vendors could not still meet the RFP requirements and the Defence Ministry was contemplating re-tendering for a second time. However, after much deliberation, it was approved with deviations. This took 36 weeks against the prescribed four weeks.

The report said the ASQRs were changed based on the advice of Boeing. Contract was finally awarded to Boeing for Apache helicopters.

The RFP required the vendor to offer transfer of technology for maintenance of helicopters. A separate contract was to be signed for maintenance.

Before signing the contract, Boeing convinced the Defence Ministry that transfer of technology and maintenance in India would not be cost effective in view of the small quantity of helicopters.

The Ministry agreed, said the CAG. This amounted to changing the terms of tendering during the process. Moreover, IAF would now be dependent on Boeing for repair and maintenance.

It said missiles for the attack helicopters were to be supplied by the US government under an Inter Government Agreement (IGA). The US government supplied life-expired missiles.

On Chinook heavy-lift helicopters, the national auditor observed that the ASQRs were prepared such that it were aligned with the features of Chinook helicopters.

Two helicopters, namely Chinook and MiG 26, were technically qualified. Chinook has a capacity of carrying 11 tonnes of load with a seating capacity of 45 troops. MiG 26 has a capacity of 20 tonnes and 82 troops.

“IAF ended up comparing the price of two helicopters with widely varying technical characteristics. Chinook being cheaper was selected.

“When IAF was preparing the ASQRs, Army desired that the helicopter should be able to carry artillery guns inside the cabin. IAF did not include this requirement of the Army on the grounds that if this would include only one vendor would qualify,” it said.

On the acquisition of basic trainer aircraft, Pilatus, in May 2012, the CAG said equity was not maintained in price evaluation.

In its price bid, M/s Pilatus had stated the price of two items to be exclusive of its bid price. However, after opening the bid and before the determination L1, M/s Pilatus was allowed to change the price bid to make the two items inclusive of the total bid price.

Against the requirement of spare of five years, Pilatus supplied spares for only three years. This does not rule out the possibility that Pilatus under-quoted for the spare.

According to the contract, Pilatus was to provide transfer of technology for maintenance, within three years of signing of the procurement contract. Technology was to be transferred to HAL. The contract for maintenance, ToT could not be signed between Pilatus and HAL because the offer of Pilatus was incomplete.

HAL also could not create the required facilities for maintenance. The responsibility for maintenance was, therefore, given to IAF instead of HAL. Contract for maintenance is yet to be signed. As a result, a substantial portion of the fleet of 75 aircraft delivered n 2015 remained grounded as on May 2018, the CAG observed.



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