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465 Pages·2013·14.86 MB·English

DEFENCE
ACQUISITION
International Best Practices

DEFENCE
ACQUISITION
International Best Practices
Edited by
Laxman Kumar Behera
Group Captain (Retd) Vinay Kaushal
INSTITUTE FOR DEFENCE STUDIES & ANALYSES
NEW DELHI
PENTAGON PRESS
First Published in 2013
Copyright © Institute for Defence Studies and Analyses, New Delhi
ISBN 978-81-8274-711-1
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without first obtaining written permission of
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Disclaimer: The views expressed in this book are those of the author and do not
necessarily reflect those of the Institute for Defence Studies and Analyses, or the
Government of India.
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Contents
Foreword ix
Keynote Address xi
Acknowledgements xiii
List of Contributors xv
Introduction xvii
1. Categorisation Options: User’s Dilemma 1
A.K. Nagalia
2. Challenges of Commercial Evaluation 12
Harish Masand
3. Cost Estimation for Determining Reasonable Price in Capital
Acquisitions: MoD Experience 26
Rajnish Kumar
4. Towards an Optimal Procedural Framework: The Indian Experience 41
R.K. Ghose
5. Fine Tuning Procedural Framework to Achieve Balance in Defence
Acquisitions 55
Alina Arora and Yohan J. Balan
6. Defence Acquisition: Indian Army’s Perspective 76
Viney Handa
7. Challenges of Defence Procurement: A User Perspective 88
Aftab Khan and HS Jhajj
8. Perspective of the Indian Air Force on Key Issues of Defence
Acquisition and the Reform Measures: Needed to Expedite
Defence Procurements 99
S.K. Jha
9. A Critique of the US Defense Acquisition Process 110
Terrence Elemendorf
vi Defence Acquisition: International Best Practices
10. Complex Programme Management in Defence 124
Michael Christie
11. Indian Experience in Contracting/Post Contract Implementation
and Project Management Challenges 132
R.K. Arora
12. Logistics Management: The French Experience 147
Alain Costes
13. Harnessing the ‘PPP’ Model in Defence Acquisition and Construction
Works to be a Catalyst for Participation of the Private Sector 163
Vinay Kaushal
14. Perspectives on Performance Based Logistics 187
Shobhana Joshi
15. Review of International Offset Experience 198
Thomas Mathew
16. International Offset Experiences and Policy Prescription 216
Kogila Balakrishnan
17. Impact of India’s Offset Policy on Military Industrial Capability
and Self-Reliance 231
S.N. Misra
18. Explaining China’s Improving Defence Industrial and Innovation
Capabilities 250
Tai Ming Cheung
19. Self-Reliance Through Smart Acquisition 262
Prahlada
20. Indian Ordnance Factories: An Agenda for Change 271
Anuradha Prasad
21. Defence Acquisition: A Shipyard Perspective 289
PR Raghunath
22. FDI in Indian Defence Industry 301
Laxman Kumar Behera
23. Transparency and Oversight in UK Defence Acquisition 317
Tim Banfield
24. The Indian Defence Acquisition System: Improving Oversight
and the System 340
K Subramaniam
Contents vii
25. Defence Acquisition Systems: A Look at Selected Nations 354
Mrinal Suman
26. Organisational Structure and Procedural Framework for Defence
Acquisition in Brazil: The Challenge of Technology Transfer 375
William de Sousa Moreira
27. Capacity Building for Defence Technology Acquisition and
Oversight 389
Ravinder Pal Singh
28. Defense Acquisition Workforce Management in the United States 403
Greg Beckham
29. Best Practices in U.S. Defence Procurement 412
Richard P. Rector and Dionis M. Gauvin
Index 426

Foreword
The international seminar on defence acquisition (held at IDSA in July 2011)
aimed at examining the best practices in defence acquisitions. It was a platform
to bring together functionaries from the MoD, the Armed Forces, and the
industry of major developed and developing countries and experts on the
subject for a three day long discussion.
It was indeed a proud day for IDSA and we had an overwhelming response
and participation for the first ever international seminar devoted to the myriad
facets of defence acquisitions. The Honourable Defence Minister Sh AK Antony’s
presence for the inaugural session and his candid address set the sense of the
purpose and professional focus for the deliberations over the 3 day period.
To our good fortune, we were able to bring together a significant number
of highly accomplished speakers and chairpersons for the ten working sessions
for this seminar. Together, they brought to the forum some unmatched, cross-
country experiences and insights into the key concerns and policy dimensions
in the realm of defence acquisition. The seminar offered unprecedented
opportunity to India in particular and indeed equally to stakeholders and
practitioners from all the countries represented for enhancing the effectiveness
of policies, precepts and practices in this vital national empowerment effort.
The major issues that were discussed included: technical requirements and
capability definitions; technical and commercial evaluation challenges; structural
elements for efficient acquisition; contract and project management; IT
opportunities in defence acquisition; empowering the defence industrial and
R&D base; role of offsets in acquisition, and efficient logistics management.
The presentations made by the distinguished speakers exposed the
participants to the need of having a mechanism for quick disposal of frivolous
complaints and DPP deviations and the setting up of an Ombudsman or a
regulatory authority to oversee the entire gamut of defence procurement. The
technical and operational evaluation of a weapon system is a demanding exercise
for all stakeholders and is best achieved through planning, discipline, rule-based
execution and expertise. The importance of team composition and size for a
time-bound evaluation campaign where the buyer and seller should designate
respective team leader with the full responsibility, were highlighted for a
successful conduct of evaluation. The discussions clarified that most cost growth
occurs early in the development, although increases continue until the end of