Defence council lays down guidelines for aircraft buy

The switchboard of the Indian Air Force (IAF) headquarters was jammed with overseas calls today: Had the government finally spelt out the technical, policy and other requirements that would allow some of the biggest defence aviation companies in the world to offer fighter aircraft to India, a deal worth $9 billion or more?

As representatives prepared to cancel their summer holidays, they were told there was no hurry: When the document "" Request For Proposals (RFP) "" was ready, they would know.

The Defence Acquisition Council (DAC) today met and laid down guidelines for the RFP: a tome that will dictate the commercial, technical and other features of the 126 Medium Multi Role Combat Aircraft that India is to buy. "The RFP is planned to be issued in the near future," a government release said.

The DAC discussed how to frame the RFP in terms of transfer of technology, licensed production and life-time maintenance support for the aircraft.

The government has decided in principle that given the size of the order, it is a buyer's market. So, the offset policy lays down that 30 per cent of the value of the contract must be bought from Indian companies and vendors, it is likely to be closer to 50 per cent in case of the 126 aircraft. The DAC is learnt to have okayed this proposal and it will be included in the RFP.

The DAC also endorsed that the selection of the final MMRCA should be from among some of the best combat aircraft offered by American, Russian and European companies. For this, an exhaustive evaluation process, as detailed in the Defence Procurement Procedures-2006, would be followed.

Apart from technical requirements, extensive field trials will evaluate the performance of aircraft. The RFP will be finalised after the commercial proposals of vendors are compared following technical and field evaluation.

The DAC felt that as the aircraft are likely to be in service for over 40 years, vendors will be required to provide lifetime support and performance based warranty. As a majority of the aircraft will be produced in India through transfer of technology, offset contracts would provide a technological and economic boost to indigenous defence industries. Clauses to this effect must be included in the RFP, the DAC felt.

The press release said the guiding principles for the procurement scheme would include, that the operational requirements of the IAF are met, "selection process should be competitive, fair and transparent and Indian defence industries should get an opportunity to grow to a global scale".

This means that the RFP, pending for the last two years, could take anything from two months to a year to materialise.