Picking Rafale was wrong in the first place, criticises CAG

NEW DELHI: The CAG indicted the very selection of Rafale in the original but never-finalised medium multi-role combat aircraft (MMRCA) project for 126 fighters under UPA, which in turn raises questions about why the NDA government went ahead with the Rs 59,000 crore direct acquisition of 36 of the French fighters.

The government contends the induction of at least 36 Rafale fighters was "a critical operational necessity" for the IAF and a lot of time would have been wasted if a new selection process had been launched afresh. Moreover, according to Central Vigilance Commission guidelines, negotiations could not be held with the competitor who came second in the bid, the Eurofighter Typhoon.

The deadlocked MMRCA project, under which the first 18 fighters were to come in a "flyaway condition" with the rest being licensed produced by defence PSU Hindustan Aeronautics Ltd (HAL), was formally scrapped by the NDA government in June 2015. The intergovernmental agreement with France for 36 Rafales was inked in September 2016.



In the MMRCA competition that began in 2007, the CAG report noted the higher manpower costs envisaged by HAL for production of the 108 Rafales, in fact, meant that Dassault Aviation's bid was no longer the lowest.

While the Swedish Gripen-E, Russian MiG-35 and fighters were rejected after field trials, the Rafale emerged the winner as the L-1 (lowest bidder) over Eurofighter after commercial evaluation in January 2012.

But the CAG criticised the selection of Rafale on several counts. One, Dassault was provided the opportunity to "significantly modify its technical and price bids (submitted earlier) in clear violation" of the Defence Procurement Procedure. Two, Dassault's bid was "non-compliant" on warranty and option clauses, while Rafale also failed to meet 14 ASQRs (air staff qualitative requirements) during the field trials. Three, Dassault did not submit its price bid in the prescribed format, which required cost break-up under seven heads that was crucial for price evaluation. Four, parity was not maintained on the "direct cost of acquisition" by the Contract Negotiations Committee (CNC) in evaluation of bids by Dassault and Eurofighter-manufacturer EADS, with the latter's price being "over-stated" in comparison to the former.

Dassault during the final negotiations said it would only stand performance guarantee for the first 18 flyaway jets. HAL, in turn, would be responsible for the quality of the 108 jets to be manufactured by it after transfer of technology. With the CNC insisting Dassault take full responsibility for the quality and performance of all the 126 jets, the negotiations became deadlocked.