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Institute for Defence Studies and AnalysesNo.1, Development Enclave, Rao Tula Ram Marg

Delhi Cantonment, New Delhi-110010

Journal of Defence StudiesPublication details, including instructions for authors and subscriptioninformation:http://www.idsa.in/journalofdefencestudies

Reinventing Defence Procurement in India: Lessons from OtherCountries and An Integrative FrameworkVandana Kumar

To cite this article: Vandana Kumar (2013): Reinventing Defence Procurement in India: Lessons from Other Countries andAn Integrative Framework, Journal of Defence Studies, Vol-7, Issue-3. pp- 11-42

URLhttp://idsa.in/jds/7_3_2013_ReinventingDefenceProcurementinIndia_vkumar

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* The author is IFA Western Naval Command, currently on study leave to pursue PhDat Gujarat University. She is also an afliated doctoral ellow at the India InnovationInstitute at the University o Toronto.

ISSN 0976-1004 print

2013 Institute or Deence Studies and Analyses

Journal o Deence Studies, Vol. 7, No. 3, JulySeptember 2013, pp. 1142

Reinventing Defence Procurement in IndiaLessons from Other Countries and An Integrative Framework

Vandana Kumar*

Over the past decade, defence capital acquisition reforms have enhancedstandardization, transparency and bigger acquisition budgets. Yet thesystem grapples with delays, cost escalations and gaps in operational

preparedness. This article explores the structure, process and culturaldimensions of the acquisition system, unpacking the underlying linkagesbetween policy, planning, budgeting, strategic direction, and outcome-focused analytical decision-makingfactors that inuence effectivenessof the procurement system. The author makes a comparative study ofthe defence acquisition system of six countries, learning from the reformsand relentless pursuit of efciency and effectiveness in USA, UK andFrance and the evolving systems of Australia, Brazil and Canada. Thearticle seeks to steer the reforms debate beyond procurement proceduresto performance management, strategic planning and risk management,towards delivering a culture of professionalism, innovation and outcome-focused decision-making to establish an acquisition system that best suitsIndias defence needs.

IntroductIon

The deence procurement system in any country is o great nationalimportance as it has an impact on preparedness o national deence andeven its ability to preserve its sovereignty and way o lie. As expenditureon deence procurement is immense, it is important not only to the


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12 Journal of Defence Studies

industry and the taxpayer, its eectiveness determines whether a countrywill be able to equip the service users with capability and reliability theyneed in a cost eective manner, consistent within the available budget.1Despite rigorous reorm in its deence procurement system during the lastdecade, India continues to struggle with timely materialization o deencerequirements, which impacts its deence preparedness. This articleanalyses key challenges in Indias deence capital procurement system;examines deence acquisition systems o other notable deence spenders,

drawing lessons rom them; and suggests a ramework or an eectiveprocurement system or India. The objective is to steer the discussion ondeence procurement reorms beyond reorms in procurement procedureand to recognize that an eective procurement system lies within the cuspo a structure and processes and is culturally aligned towards acheving thedened objectives. Finally, it is about nding ways to build the deencecapital procurement system that best serves the needs o the men andwomen in our armed orces and the citizens they deend.

ProblemsInthe IndIan defence caPItalacquIsItIon system

Practitioners, researchers, oversight agencies alike have lamented the delays

in deence procurement in India and their impact on deence preparednessacross the Army, Navy and Air Force. According to the Comptroller andAuditor Generals (C&AG) report o 201112, the ailure o the Army indening the requirement o specic gun system had deprived its Artillery,or over a decade, rom obtaining guns o contemporary technology orreplacing the existing obsolete orce level with guns o 45 caliber lengthin service. Army HQ took more than our years rom April 1997 to July2001 in deciding the actual requirement o guns...and the Army spentnearly ve years in trial evaluation o a gun under development instead oa proven gun system.2

The Deence Procurement Procedure (DPP) 2011 stipulates thatprocesses rom issue o Request or Proposal (RFP) to contract signing

should be completed within 74137 weeks. However, according tothe Deence Secretarys statement beore the Parliamentary StandingCommittee on Deence (SCD) or its 2012 report, or Army procurements,RFP ormulation takes nine months as against the stipulated our weeks;technical evaluation (TEC) takes six months against the stipulated 12weeks; and General Sta (GS) evaluation 18 months against laid down 2854 weeks taking the total time taken ar beyond the laid down schedule.3


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Reinventing Defence Procurement in India 13

Commenting on the unctioning o the aviation arm o the IndianNavy, the C&AG in its perormance audit report o 201011 reported:

The feet being operated by the Indian Navy, at present, is criticallyshort in terms o numbers and even ater potential inductionsduring the period 200712, the Aviation Arm is likely to achieveonly 26, 33 and 63 per cent o the orce levels required in respecto long range reconnaissance, combat and antisubmarine warareaircrat respectively. Indian Navys air combat capabilities have been

drastically reduced owing to availability o only one carrier, whichis almost hal a century old and is to be decommissioned in 2012.The Wing is also characterised by ageing and obsolescent assets.

Attack capabilities o the already depleted aircrat feet onboard thecarrier has been restricted in the absence o ully unctional radar andlimited ring o practice missiles.4

In its report o April 2012, the SCD has noted with concern theshortages o ammunition, aircrats, armament and artillery with theservices. It has also raised a red fag on the Air Force being 11 ghtersquadrons short o its required levels. It also pointed out that the Air Forcewill be able to reach the requisite level o 42 squadrons only by the end oourteenth plan (2027), even as it grapples with obsolescence and agingfeet and induction not keeping pace with de-induction. The SCD hasurged the Ministry o Deence (MoD) to take urgent steps to put aircratprocurements on the ast track and simpliy procurement procedures toexpedite other procurements.5

The Augusta Westland VVIP helicopters deal, which has once againshaken the country, also points to the time capital procurements take.The RFP or the choppers was rst foated in 2002 and the contract wasnally awarded in 2010 ater revisions in height specications and a re-tender in 2006.6

Oten the bureaucratic system o decision-making has been blamed orthe delays in procurement, attendant cost overruns and gaps in operational

preparedness. The Economist recently made a telling commentary onIndias deence procurement system:

The absence o a strategic culture and the distrust between civilian-run ministries and the armed orces has undermined militaryeectiveness in another wayby contributing to a procurementsystem even more dysunctional than those o other countries.7


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Keychallenges

Over the last decade the MoD has attempted to develop and stream linea comprehensive procurement system or Indian deence with the statedobjective o ensuring expeditious procurement within the specied timerame by optimally utilizing the allocated budgetary resources whiledemonstrating the highest degree o probity, public accountability, andtransparency in operations, ree competition and impartiality. 8

For capital procurements, a hierarchical procurement structure has

been established with our pillars: the Deence Procurement Board,Deence R&D Board, Deence Production Board and the DeenceAcquisition Council. Over the years, the DPP has evolved to standardizeprocedures towards greater transparency and air play but it begs thequestion: has the new system built capacity or timely procurements required

or deence preparedness and best value or money?Over our decades ago, Niskanen suggested that the perormance

o dierent organizations diers essentially due to dierences in theirstructure and incentives to their managers.9 The deence reorms o thelast decade have been largely ocused on establishing a structure and ne-tuning processes. But, these reorms have ailed to make systemic changes

necessary or an eective procurement system severely challenged bycomplex structures, labyrinthine processes, and a culture o compliance.

Structure

Each case o capital procurement has to meander through variouscommittees comprising o various ocials among several departments andagencies, namely, the respective service headquarters (SHQ), the IntegratedDeence Service Headquarters (HQIDS), Director General o QualityAssurance (DGQA), Deence Research Development Organization(DRDO), the Acquisition Wing, MoD and MoD (Finance) at variousstages o acquisition. There are several layers within which decisions haveto be made and since so many individuals unction individually and in a

collegiate manner across various organizations, and les go back and orthbetween them, leading to dispersed accountability that is hard to x.

Process

A capital procurement decision in India goes through various stages:the ormulation o sta qualitative requirements (SQR), acceptance onecessity approval (AON), ormulation and sending o RFP, TEC, andtrials and contract negotiation (CNC). While this process should take


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rom 74137 weeks, depending upon the complexity and number ovendors participating in the process, it actually takes much longer thanthe timeline stipulated by the DPP.

The renement o DPP over the years has led to the evolution o astep-by-step guideo what needs to be done with a prescription or dierentsituations, articulating the situations and the response to each situation.It even gives drat RFP, compliance table, ormat or commercial oer,TEC and contract documents, among others, which makes it incumbent

upon ocers associated with procurement to ollow the proceduresin toto. While this approach lends uniormity o procedure and easeo compliance, does this approach not rob the ocers responsible or the

procurements o the creativity and responsibility or achieving the outcomesthey set out to achieve? In the absence o any perormance measurementramework, the mantra or the procurement teams today isollow thebook and the laid down procedure irrespective o the time the processtakes, irrespective o the opportunity costs o not taking timely decisions,security implications, and eventual cost escalations and avoidable cost tothe exchequer in the longer term. Ocers avoid deviation rom the rulebook as it is a recipe or inviting criticism or avoritism and corruption.Even i they tweak a provision to acilitate a decision and outcome in thebest long-term interest o the state, explanations are sought.

Although the deence capital procurement budget today accountsor 42 per cent o the deence budget, having grown rapidly in the lastdecade10, there is no systematic measurement o its eectiveness. There isalso no assessment o how an increase in deence budget contributes toan increase in national security, and no studies which quantitatively orqualitatively measure eectiveness and eciency o the way the deenceprocurement system has evolved over the last decade.11

Besides, the Indian oversight system places very signicant emphasison adherence to procedures in a narrow sense, even at the cost o outcomes.A senior Central Vigilance Commission (CVC) ocial has unpacked the

issue o adherence to rules succinctly:Rules and procedures prescribe actions aimed at maintaining certainprinciples like integrity, value or money, objectivity, air play andcompetition. Thereore principles are more important than the rulesand i principles are upheld even at the cost o rules, there shouldbe no issues. However, in the Indian system, the procurementprocedures and rules stipulate only the operative part and do nothighlight the underlying principles.... Rules ormulated in the ormo dos and donts leave very little operational reedom to managers.12


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Culture

Deence acquisition-related decision-making in India is characterized byocus on compliance o procedures, risk avoidance and mistrust. India isoten said to be impeded by its caution and bureaucratic inertia13, and aculture which has become synonymous with lack o initiative, excessiveadherence to rules and routine, and ineciency. Several o the culturalchallenges can be linked with processes and the way structures are aligned,and they seem to drive each other.

Although databases exist in dierent ormats based on individualorganizations initiative, size and IT enablement, there is no systematicanalysis o data on past procurements and how those procurements areaiding productivity improvement or enhancing operational preparedness.

The lack o trust in sound business judgment o individuals has givenrise to numerous checks and balances, and an emphasis on adherenceto strait-jacketed procedures instead o broad guiding principles and ahierarchical structure with diused responsibility. The oversight systemurther reinorces this culture and the comprehensive body o rules andregulations leave little room or procurement ocials and teams to showcreativity and take ownership or bold decisions, thereby encouraging risk

avoidance behaviour. Irrespective o time, the decisions taken and coststhey entail, the deence capital procurement system has placed premiumon ollowing the procedures. This also restricts the procurement ocialsrom recognizing that there are trade-os between perormance, cost andtime; the time taken in decision-making matters; and that risks need tobe identied and managed.

Lack o reliance on data and analytical tools contributes to lack ounderstanding o or sensitivity to some o the undamental concepts,which have a bearing on outcomes. The ocus on procedures makesprocurement executives ocus on going by the rule book instead olearning new tools and techniques that are required in acquisition, whichis global in nature and driven by international regulations and requires

sound understanding o the industry, engineering appreciation, lie cyclecosts, market indices, and innovative nancial models.

defence Procurement acrossthe globe

Researchers in India have created a credible body o work on Indias needor a responsive, outcome-oriented procurement system, and it is nowtime to start thinking o how such a system could be built. It is worth


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looking beyond our own borders and examining systems o other notabledeence spenders. There is plenty to learn both rom countries with largedeence spending and those which have smaller deence budgets withsecurity scenarios much dierent rom that o India.

This article examines some o the notable deence spending countriesamong the top 15 in the world:

1. United States o America: largest spender.2. United Kingdom and France: spend more than India and have

well-developed deence industrial base and acquisition systems.3. Australia, Brazil and Canada: spend less than India and, like

India, still depend on imports.

Another reason or selecting these particular countries is that theyshare same democratic traditions where the military is subordinate tocivilian authority, and also because o the relative transparency in theirsystems and availability o credible inormation and an existing body oresearch.

To understand the acquisition systems o these countries relative toIndias, it is important to get a sense o the magnitude o their spendingon acquisition (see Table 1). While in India most o the modernizationand capability building gets covered under capital expenditure, thesecountries dier in the categorization and nomenclature o their acquisitionexpenditure. For instance, in the USA, capital acquisitions get coveredunder procurement, research development, testing and evaluation(RDTE). It caters separately or military construction and amilyaccommodation. In India, capital caters to not only modernization butalso capital works, which include construction activity.

Table 1 Defence Expenditure of Select Countries

Country 1988 1990 1995 2000 2005 2010 2011

USA 540.42 511.00 399.04 382.06 562.04 698.28 689.59

France 65.27 65.77 60.58 57.62 60.73 59.10 58.24

UK 53.75 54.30 44.66 44.31 53.68 58.10 57.88

India 16.71 17.58 18.33 25.84 33.69 46.09 44.28

Brazil 19.90 46.54 20.38 22.46 23.68 34.38 31.58

Canada 19.34 19.22 16.27 14.62 16.64 23.11 23.08

Australia 13.23 13.18 14.03 15.47 18.41 23.22 22.96

Source: SIPRI Yearbook 2012; all gures are in in US$ billion at 2010 constant pricesand exchange rates.


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Table 1 indicates the deence expenditure o the selected countriesrom 19882011. The United States, the worlds largest deence spenderaccounting or over 40 per cent o worlds deence spending, under itsprocurement head caters or US $124.7 billion in its budget or 2012and makes separate provisions o $70.4 billion on research development,testing and evaluation (RDTE), and about $16 billion towards militaryconstruction and amily accommodation.14 Most other countries underdiscussion spend a raction o the USs budget on their acquisitions.

For instance, in the case o the UK, the annual budget o its acquisitionagency Deence Equipment, Support and Technology is 15 billion or alittle over $23 billion.15 France, out o its 32 billion budget or 2010,spent 14 Billion on procurement.16 Australia allocated US$9.1 billionon acquisition and through lie support in its 2012-13 budgets. 17 In itsdeence policy o 2008, Brazil committed to re-equipping its military andin 2012 it sought BRL 8 billion ($4.38 billion) or procurement. 18 Inits Canada First Deence Strategy ormulated in 2008, Canada cateredor US$490 billion over 20 years. It has developed its strategy aroundour pillars: personnel, equipment, readiness and inrastructure, andproposes to spend $60 billion towards equipment over this period.19Indias acquisition budget lies somewhere between the higher spendingUnited States and UK, and the lower spending Australia, Brazil andCanadaduring the year 201213, India provided or $12.95 billion orthe same.20

The US, UK and France have built strong deence industries, whichis evident rom the act that the US, Russia, Germany, France and UKaccounted or 78 per cent o all arms exports between 2004 and 2008. 21From the data presented in Table 1, it may be inerred that the spending inrespect o USA, UK, France and Canada, deence spending declined in thedecade rom 19902000 as a result o the end o the Cold War. However,signicant reinvestments can be observed in the next decade (200111),which have coincided with or resulted rom events like 9/11 and the North

Atlantic Treaty Organizations (NATO) engagement in Aghanistan, andthe Second Gul War. In recent years, the clamour or reducing deencebudgets has been increasing along with demand or increase in welareunding. As long-term budget increases are not sustainable, and there isa need to maintain credible deence along their own policy lines, eachnation is becoming increasingly ocused on increasing eciency andproviding military equipment at least cost. As such these countries arecontinuously reorming their acquisition systems to sharpen eectiveness


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and eciency o utilization o resources while keeping the armed orcesprepared or national deence as decided by national priorities.

Each country has tried to address the systemic challenges discussed inpreceding section in their own way. While some have tried to centralizedeence procurement in a one-touch point deence procurementorganization (UK and France among the big spenders, and Australia andBrazil among the relatively smaller spenders), the US has, on the otherhand, a decentralized and tightly meshed system o ederal regulations

and resources which deliver their indigenous acquisition programmes.Canada has, over the years, debated on a single procurement agency.

On the process dimension, too, they have varying degree o regulationand procurement guidelines. The UK and France can be considered ashaving a liberal regulatory ramework or procurement while the UShas a very well-dened regulatory ramework. All these countries haveaddressed the process and cultural challenges by employing proessionalprocurement teams whose decisions are based on data and analysis withinthe regulatory ramework. Some elements o their rameworks, which aideectiveness and eciency, can be examined to see what lessons couldbe learnt rom them. A scan o the deence procurement or acquisitionsystems around the world shows the ollowing elements:

(a) Linkages between policy, planning and budgeting(b) Focus on outcomes(c)Analysis-driven decisions(d) Enabling organizationThe ollowing section assesses Indias own system along these our

dimensions and contrasts it with the select nations, as also their impacton the key challenges on the dimensions o structure, process and culture.

IndIa: lInKIng PolIcy, PlannIngand budgetIng

While this article ocuses on improving the existing procurement system,

it will be incomplete i the steps which precede and aect procurementare not analysed. It is thus worthwhile to step back and see how processesrelating to policy, planning and budgeting are linked in India andelsewhere.

The DPP 2011 seeks to link the procurement process to theplanning process by prescribing the ormulation o the 15 year Long-Term Integrated Perspective Plan (LTIPP), which outlines the technologyperspective and the capability road map; the ve year Services Capital


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Acquisition Plan (SCAP), which indicates the list o equipment to beacquired, keeping in view operational requirements and the overallrequirement o unds; and a short-term Annual Acquisition Plan (AAP)o each service, which is a two year roll-on plan or capital acquisitionsand consists o the schemes rom the approved SCAP. As can be seen,deence planning commences with the LTIPP but does not derive strengthrom any publicly-known national plan that articulates how nationaldeence ts into the national objectives and how the latter would drive

the ormer. As deence consumes very signicant resources o the nation,it can be used to leverage growth by developing industry capabilities,driving innovation, and creating employment opportunities. Not linkingdeence to the national development objectives thus constitutes a missedopportunity to make it a driver o growth.

National security objectives need to be dened and deence policyarticulated to balance deence eort with other national objectivesand priorities, such as maintaining a viable economy and supportingdevelopment o the society. Former Chie o Army Sta, General V.P.Malik says that the lack o cohesive national security strategy and deencepolicy has resulted in inadequate political direction regarding politicomilitary objectives.22 Much earlier, deence analyst K. Subrahmanyamhad opined that the lack o clarity in thinking regarding the place odeence in the overall planned development process stands in the way oIndias developing adequate deence capacity to deend itsel.23

Let us now turn to how other the major deence spenders have linkedtheir policy, planning and budgeting with their acquisition systems toobtain the benet o a higher direction o national deence policy andstrategy. Let us begin by examining Brazil, another emerging economywhose deence budget touches $33 billion. It is a country that has notseen many wars and articulated its deence strategy or the rst time in2008. Its National Strategy or Deense (NSD) categorically states thatthe national strategy o deense is inseparable rom the national strategy o

development. The latter drives the ormer. The ormer provides shieldingto the latter. Each one reinorces the others reasons.24

Based on the NSD and its resulting Military Strategy, Brazils armedorces are required to submit their Equipment and Organization Plans.The Plans o each service then, need to make reerence to short-term,medium-term and long-term goals.25 The NSD addresses deenceholistically, outlining the vision to meet its security requirements, powerprojection or geopolitical aspirations and articulates its manpower


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strategy, building technological and production capability and engagingcivil society. Although the deence structure is still evolving in Brazil, it hascentralized obtaining deence products into the Ministry o Deence andestablished the Department o Deence Products (Secretaria de Produtosde Deesa or SEPROD) in 2010.26

Canada too came out with its deence strategyCanada First DeenceStrategyin 2008, based on the Governments vision or deence as wellas an analysis o the risks and threats acing the country. The goal o its

strategy is to establish clear strategic goals and provide planning certaintythrough stable and predictable unding to enable investments in theour pillars o national deencepersonnel, equipment, readiness, andinrastructure.27

The Americans, on the other hand, have a long history o reormsin deence which began with overhauling o the Department o Deencein the 1960s under Secretary o Deence, Robert McNamara, and theestablishment o the Planning Programming Budgeting System (PPBS).Under this system, the planning process determined military objectivesand orce requirements, the programming phase translated theseobjectives into time-phased programmes, and the budgeting phase relatedto translating programme requirements into resource requirements o thespending departments. This approach required each service to documenttheir multi-year programming o resources in a single document, knownas the Five Year Deense Program (FYDP). Figure 1 shows how the PPBSevolved to become more participatory in the 1970s to provide scalguidance and programme objectives to the Services.

The PPBS evolved into PPBE (Planning Programming, Budgetingand Executive System) by 2003, as to assess how the programmes andbudgets play out in the real world. PPBE and the Deence AcquisitionSystem are connected through the Department o Deences (DoD)personnel and nancial resources. At programme initiation, an acquisitionprogramme must identiy its needs or these resources over the lie o the

programme. These requirements have to be consistent with the resourcesthat have been allocated to the programme in the latest PPBE cycle toensure that the programme is aordable. As the programme is carriedout, its budget requirements are updated and the changes refected inthe PPBE. The deence acquisition system, detailed in the DoD 5000series directives, in turn, emphasizes the establishment o programmegoalsthresholds and objectivesor the minimum number o cost,schedule, and perormance parameters that describe the programme over


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its lie cycle. The programme goals, in turn, have to be linked to theDoD Strategic Plan and other appropriate subordinate strategic plans,such as the component and Functional Strategic Plans and the StrategicInormation Resources Management Plan.29

From an Indian perspective, the most useul elements o the AmericanPPBE system are evolving a military strategy out o a national securitystrategy, which translates into military programmes, provision o assuredresources over medium term, and now a ocus on execution. Anothertakeaway or India rom this system is the active engagement o the topleadership like the Secretary o Deence and Joint Chies o Sta.

The UK has enunciated its deence vision as Deending the UnitedKingdom and its interests, strengthening international peace and stabilityand being a Force or the Good in the world.30 The Deence Plan (DP)outlines how the deence aim obtained rom this vision will be delivered.The plan originates rom the National Security Strategy, which was rstpublished in 2008 and updated in 2009. The Strategy or Deence (SD)articulates how departmental strategic objectives will be delivered. Thestrategy gives direction to ensure that the armed orces get the support

Figure 1 Evolution of PPBS in USA

Source: Adapted rom Ghosh (2006).28


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they need and that tax payers money is spent wisely and continuousimprovement is instilled in business practices to achieve greater eciency.The our-year DP which delivers deence strategy, refects priorities andhow strategic objectives will be delivered. It outlines sub-strategies orthe Armed Forces, Capability, Acquisition, Workorce, Security Policyand Financial Management, among others. Owners o each o these inturn dene their own priorities and strategic, resource aware, long-termoutlook with specic details or the rst our to ve years.31

In India, deence has been kept out o the nations planneddevelopment eorts, and the allocation o resources or deence isconsidered in isolation rom allocation or other priority areas, which alsois refected in the classication o expenditure as plan and non-plan.

Even though deence acquisitions require long-range planning and thedecisions have an impact over 2030 years, the expenditure is classied asnon-plan. While some may argue that deence in India has never beendenied unds and has not suered any shortage o unds, what mattersis not just adequacy o unding at a given point in time or decisions tobe made, but an assured, predictable unding over the medium and longterm along with planning based on analysis o risks and threats which isessential to a credible and aordable deence.

While the DPP 2011 keeps the goal o sel-reliance as one o theobjectives o procurement, and indigenization is a recurrent theme,a cogent approach inormed by policy action and backed by variousinstruments available with the government is missing. I the statuso deence is clear within the nations development agenda, deenceexpenditure can be leveraged or growth. The nations resolve or itsdeence can be strengthened i there is a clearly articulated deence policy,which is in the knowledge o its citizens and which clearly articulates itsgoals and strategies to achieve those goals.

InstItutIonalframeworKforfocuson outcomes

While the eort o years has helped evolve a procurement systemwhich reduces ambiguities, enhances transparency and air play, it alsosuers rom being a compliance-oriented system rather than an outcome-oriented system. To have a truly ecient and eective system o deenceprocurement, the key elements would have to beocus on outcomes,

fexibility and responsiveness.The eatures o fexibility, responsiveness and being outcome ocused

are hallmark o deence procurement systems around the world. The


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stated vision o Federal Acquisition System established by the USAis to deliver on a timely basis the best value product or service to thecustomer, while maintaining the publics trust and ullling public policyobjectives. Participants in the acquisition process should work together asa team and should be empowered to make decisions within their area oresponsibility.32 Figure 2 shows the ramework o the American acquisitionsystem and the principles it ollows in order to achieve procurement goals.

In order to become outcome-ocused, a system needs a perormance

management system, which includes the ollowing:(a) Perormance measurement system, which measures activities,

outputs, outcomes and quality.(b) Financial management cycle, which includes budgeting,

accounting, auditing and evaluation.(c) System or reporting status o perormance inormation and

accessibility o documents, such as accessibility o annual reports,and perormance standards.

Figure 2 Framework of American Acquisition System to

Deliver Best Value Product on a Timely Basis

Source: Developed by the author on the basis o FAR guidelines.


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(d) Mechanisms or using perormance related inormation, such asperormance budgeting and perormance-related wages.

(e) Result oriented management support techniques, includingperormance agreements, risk management and benchmarking

In Indian deence, a perormance measurement system to measureoutputs, outcomes and quality is conspicuous by its absence. There arewell-institutionalized systems or budgeting and accounting but thebudgeting system ollowed in India is an input-based system, bequeathedby the British and given up by them in avour o programme budgetingaround 1965, and as such does not give an idea o outputs or outcomesexpected rom the budgets. The accounting system does not illuminatethe cost o programmes as the expenditure is compiled to detailed headswhich can give inormation on how much expenditure is compiled toinputs such as pay and allowances, or petrol, oil and lubricants (POL)or stores o a kind; it cannot provide inormation on how much doesit cost to maintain a Jaguar squadron or an artillery unit. India has astrong tradition o audit by the C&AG, which does a regulatory andperormance audit as well as an internal audit o deence, which is largelyregulatory or compliance audit. The annual reports o the Ministry

are available on the Internet as are the reports o the C&AG and theSCD, and as such orm a valuable part o the perormance inormationsystem. Other perormance-related tools, such as perormance budgeting,perormance wage as also perormance agreements and techniques likerisk management and benchmarking are yet to be exploited in Indiandeence.

Countries such as Australia and the US have ocused on outcomes.In the US, the Government Accounting Oce (GAO) and the Congressdene the principles o accounting and audit, standards o audit. In1993, Government Perormance and Results Act (GPRA) was enacted; itrequired all agencies (with some exceptions) to submit ve-year strategicplans, which include annual perormance plans with measurable goals,and perormance targets and perormance reports were to show three-year comparative data or indicators o programme perormance.33 In theUS, there is relentless ocus on improving perormance reporting. TheGAO in its 2013 report has spoken o serious nancial managementproblems at the DoD due to which nancial statements have been taggedas unauditable. The report has also adversely commented on ederalgovernments inability to adequately account or and reconcile intra-


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governmental activity and balances between ederal agencies, and theederal governments ineective process or preparing the consolidatednancial statements.34 In a bid to control costs and time rames o theweapon acquisition programmes, the Deence Science Board has echoedthe ramework and suggested that The most important action that theSecretary o Deense can take is to reorm the strategic military planningsystem and establish a genuine business plan or DoD to disciplineresource allocation in support o national security objectives.35

Acknowledging need to strengthen accountability, Australia has,through the review o Deence Accountability Framework o 2011,proposed to strengthen organizational and individual perormanceaccountability arrangements or all senior ocers. Perormance arrange-ments will ocus on speciying actions and initiatives that are implementedby named individuals against specic perormance measures. It alsobrings the stas personal and proessional accountability within itsambit, linking perormance plans to the Deence Plan, and seeks toimplement perormance arrangements which encourage and reward highperormance and deter under-perormance.36

The UK too has put in place a perormance management rameworkto measure achievement o objectives outlined in its Deence Plan andusing perormance indicators, targets and progress measures. The DeencePlan or the year 2010-14, or instance, clearly outlines broad strategicobjectives and perormance indicators against each (see Figure 3).

DP outlines how the deence aim outlined through this vision willbe delivered. The plan takes its origin in the National Security Strategywhich was rst published in 2008 and updated in 2009. The UK MoDalso contributes to two Public Service Agreements (PSAs):

(a)PSA 26: To reduce the risk to the UK and interests overseas rominternational terrorism; and

(b)PSA 30: A global and regional reduction in confict and itsimpacts through improved UK and international eorts toprevent, manage and resolve confict, and to create conditionsrequired or eective state building and economic development.

In addition, the MoD contributes to two other PSAs on avoidingdangerous climate change and securing a healthy natural environment.

The Strategy or Deence (SD) provides direction to ensure that thearmed orces get the support they need and that the tax payers money isspent wisely, and continuous improvement is instilled in business practices


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to achieve greater eciency. Towards this end, 23 sub-strategies and thedeence plan have been promulgated. The key sub-strategies include theNavy, Army, Air Force, Capability, Logistics and Acquisition. Clear aimsand objectives with targets and perormance indicators are included andthe delivery o the Strategy is managed through sub-strategies or the key

areas. The Deence Board Strategic Objectives (DBSO), dened in theDP, are derived rom the technical instructions and the sub-strategies,thus linking the DP, a document used internally or delivery, and the SD,which denes the requirements o the national security and the prioritieso the department.

Top level budget (TLB) holders are responsible or managing resourcesto achieve targets as eectively, eciently and economically as possible.The perormance management ramework includes the Quarterly

Figure 3 Performance Management Framework in UK

Source: UK Ministry o Deence, Deence Plan 201014.


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Perormance and Risk Report (QPRR). Annually, sub-strategy ownersand TLB holders are held accountable or delivery o sub-strategies. AStrategic Perormance and Risk Report (SPRR) is also prepared to evaluateand recaliberate strategy through adjustment o strategic direction.37

analysIs drIven decIsIon-maKIng

Deence economist Keith Hartley suggests that considering alternativemethods to achieving security and protection is a valuable ramework.38

The ramework could be used to consider evaluation o achieving the sameresults using either land- or sea-, or air-based platorms. It can also be usedto evaluate replacing manpower with equipment and within equipment;the alternatives o quality and quantity could be considered, as can theoptions o procuring new equipment as against lie extension and mid-lieupdation. Further choices o importing or indigenous development andproduction could be evaluated to maximize the eciency o the deployedresources.39

Although strength and composition o orces are main drivers o cost,orce structure planning is not attempted through the planning processin India.40 In a submission beore the Parliamentary SCD, the Air Force

averred that as against sanctioned strength o 42 squadrons, IAF has 34ghter squadrons, the numbers o which will reduce to 31 squadrons inthe Twelth Plan period, although the IAF aims to build 45 squadrons(which will happen only by the Fiteenth Plan).41 It is unclear whywithplanned inductions o aircrats o superior technology and capability likeSU-30, Jaguar, Multi Role Combat Aircrat, Light Combat Aircrat theIAF still targets building up to 45 squadrons. The principle o substitutionwould indicate that the service considers a orce mix o high capabilityexpensive equipment and low capability cheaper equipment, and whiledoing so also considers appropriate mix o equipment and manpoweras such trade-os would be essential or cost-eectiveness and to keepexpenditure at sustainable levels.

The process o acquisition has embedded rigorous analysis in themajor deence spenders or an outcome oriented decision-makingsystem. Australias procurement system, or instance, places premium onrisk management and UKs system on cost-eectiveness analysis. Riskassessment is a pre-requisite or its complex and strategic procurements anduses the concept o earned value management (a set o project managementprinciples that integrate cost, schedule and technical perormance). It also


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recognizes that value or money is not determined by the price o thegoods and services alone. A comparative analysis o the relevant nancialand non-nancial costs and benets o alternative solutionstaking intoaccount actors like tness or purpose, the perormance history andexperience o each potential supplier, fexibility (including innovationand adaptability over the liecycle o the procurement), environmentalsustainability (such as energy eciency and environmental impact), andwhole-o-lie costs throughout the procurement processis essential or

value or money assessment.42

Acquisition systems the world over recognize that cost o risk avoidanceis prohibitive and, hence, the ocus must shit rom risk avoidance to riskmanagement. A ailure to adequately identiy risks and develop strategiesto manage those risks could result in:

(a) selection o contractors not capable o delivering the requiredoutcome;

(b) delays in the delivery leading to time overrun on contract orproject completion;

(c) ailure to meet intended quality parameters;(d) project cost overruns, including due to legal process or probity

issues arising during the procurement;(e) increased costs to tenderers;( ) damage to the reputation o deence or the individuals involved

in the procurement; and(g) non-achievement o identied requirement and/or not meeting

the users expectations.43

The UK, a pioneer o reorms in deence management, hascontinuously evolved its procurement system with an unwavering ocuson cost-eectiveness. Its procurement system went on rom becominga sequential process consisting o specication and justication othe operational requirement by the deence sta to the selection o

the most economical equipment by the Procurement Executive, andto an integrated cross unctional analytical process using the concepto Combined Operational Eectiveness and Investment Appraisal(COEIA).44 It includes comparison o the cost-eectiveness o a range ooptions to satisy a military requirement and takes into account wholelie costs and operational eectiveness. The analysis applies to orce-mixstudies which provide justication or a particular class o equipment andthen set out examining alternative options within the class o equipment


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considered. The MoD-approved scenarios and concepts o operationhave to be considered and measures o eectiveness to be employed usingprocurement and support strategy or each option. Figure 4 shows howthe UK has migrated rom a sequential procurement system to a moreintegrated analysis driven procurement system.

The Acquisition Operating Framework put in place by the UKs

MoD, while articulating deence values or acquisition, captures valueswhich could make a vital dierence to sharpening eectiveness o deenceacquisitionsrstly, recognizing trade-os between perormance, timeand cost; and, secondly, quantiying risk.45

enablIng organIzatIon

As the deence procurement system is inherently multidisciplinary andrequires collaboration among people rom dierent specializations, it isnecessary that the system demands and encourages collaboration requiredto bring about outcome required: that o timely procurement o weaponsand equipment o required perormance parameters with the best value

or money. This would mean that the perormance evaluation, rewardsystem, and decision rights have to be aligned such that they enable amultidisciplinary team to work towards common policy objectivesand acilitate outcome oriented decision-making. The countries underconsideration are constantly evolving organizations by virtue o addressingstructural issues, aligning perormance evaluation systems, incentives, andputting in place a comprehensive perormance management system. Inessence, an enabling organization is a sum total o its structure, processes

Figure 4 Evolution of UKs Analysis Driven Procurement System

Source: Lindop, Cost Eectiveness in UK Deence Procurement.


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and work ethic aligned in such a manner that they achieve desiredobjectives.

The UKs Deence Equipment and Support organization (DE&S),which came into being in 2007 and also had deence procurement agencyand deence logistics organization with it, is poised or yet anothertransition by way o part privatization o DE&S in order to control itscosts. The organization has a budget o 14 billion and a sta o 16,500.46,47

During the assessment phase announced in April 2013 and expected to

last one year, the government will evaluate two options: one o a privatesector-led government-owned, contractor-operated (GOCO) model, andthe other a restructured, ully-unded version o DE&S that stays withinthe public sector, known as DE&S+. This path-breaking reorm is aone-o-its-kind undertaken by any country in the world.48 This reormwave has been triggered by DES&Ts inability to control costs, which,in turn, has been attributed to weak interace between DES&T and thewider MoD, and pressure rom services to accommodate large numbero change requests, thus leading to the programme being in a constantstate o fux and overoptimistic cost estimates. The UKs Public AccountsCommittee has noted the conspiracy o optimism where project teams,industry and decision makers are willing to accept cost estimates closer toavailability o resources and demonstrates this with two examplesthato the Landing Ship Dock project, which exceeded the cost estimates by80 per cent, and omission to include development costs in the Type-45destroyer project, which has led each ship to cost 100 million more thanwarships in this class.49

Speaking on the impending reorms to the DES&T wing o the UKMoD, Minister Peter Lu, in a deposition beore the Committee, said:We tie our hands behind our back when it comes to commercial processesin government, and transparency is oten the enemy o eectiveness.50

Although the USs DoD is the leader in deence acquisition, it is urgedby think tanks like the Rand Corporation and GAO to remain ocused on

containing costs and time rames o acquisition. J.A. Alic suggests that theroot cause or large commitments to expensive programmes lies in the questo each service competing or missions and resources to accomplish thosemissions. What exacerbates the situation is the inability to methodicallycompare and evaluate dierent weapon acquisition proposals; althoughthey have similar unctions, they entail dierent investments. In the nameo national security, services are able to insist on the equipment they want.He suggests that the only way o arriving at more sensible acquisition


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decisions is by reducing the control o the military services over majorprograms.51

Recognizing the need to reduce processing time in its deenceprocurements, Canada has been debating on the creation o a singleprocurement agency to help improve accountability and expeditedecision-making.52 In 2009, the Canadian Association o Deence andSecurity Industries (CADSI) conducted a review o the Canadian Deenceprocurement system and identied our undamental issues53:

(a) Length and unpredictability o Canadas procurement process.(b) Bureaucracy, weak decision-making layers o bureaucracy, lack

o consistent decision-making or accountability, and uncertaintyabout customer needs either rom equipment or industrialregional benets perspective.

(c) One-sided contracting lacking fexibility or innovative solutions.(d) Lack o transparency and inability o contractors to communicate

with government ocials prior to issuance o proposals.

The French established a single executive agency within the Ministryo Deensethe Dlgation Gnrale pour lArmement (DGA)whichwas made responsible or the contracting and management o all weaponsprogrammes rom inception to delivery, including export sales. Since thetechnical knowledge resides in the private sector, which is motivated byprot, the DGA relied upon the industry; however, to control costs andto ensure the industry did not take the government or a ride, the DGAhired the best and the brightest, allowed them years o experience in theindustry and deployed them on those very programmes or years. It alsogave its engineers programme authority and kept them in those positionslong enough to develop deep understanding o the industry and theprogramme or eective management. The French also switched to xedprice contracts or development o weapon systems and engaged in pre-contractual negotiations to identiy areas o risks to avoid cost overruns in

later stages. As it is impossible to oresee all risks at the commencemento the programme, the French have established a responsibility principlewherein whichever party, be it the government or the contractor, ails tomeet contractual obligations, that party will bear the costs o the delay.54This principle has helped the French to avoid the rent seeking behaviouro the private industry and also keep the procurement executivesaccountable.

The American FAR seeks to empower the procurement team by


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urging each o the acquisition team member to exercise personal initiativeand sound judgment to provide the best value product or service to meetcustomers needs. For them, any strategy, practice, policy or procedurenot addressed in FAR, nor prohibited by law is a permissible exercise oauthority..55

Canadas Agreement on Internal Trade, signed on 18 July 1994, is oneo the provisions that has had signicant impact on ederal procurements.This act is binding on ederal, provincial and territorial governments and

has strong redressal mechanisms according to which there are severe legalimplications i procurement is not conducted airly, and i politicians areound to have inappropriately intervened in the process. This has ensuredthat the politicians do not interere once the procurement process hascommenced.56

In Brazil, there is a new ound impetus on deence which indicatesthat the country is no longer content with purchasing arms. To reducethe gaps which exist in critical deence technologies, academia, industryand business are participating in development o technologies. In itsevolving deence acquisition system, SEPROD has been ormed or acentralized and integrated management within the MoD, an equivalento Frances DGA. To make the organization enabling, attendant reormsin regulation have also been made. The Brazilian Complementary Lawo 2010 empowers the MoD to ormulate policies, issue guidelines andbudget plans, and exercise a central role in the consolidation o proposalsand prioritizing requirements. The law requires that a white paper beormulated addressing various issues such as the strategic scenario,national deence policy and strategy, modernization o the armed orces,rationalization o deense structures, and economic support o nationaldeence. In 2012, special standards or the acquisition, contractingand development o deence products and systems have also been laiddown, including the creation o incentive rules or the strategic deencearea.57 SEPRODs tasks include creating knowledge and expertise with

regard to acquisition o deence products; laws, key players and theirresponsibilities, global trends, opportunities or partnerships; managemento purchasing power; and acquiring knowledge in various disciplinesnecessary or eciency and eectiveness or deence procurement.

Change is the constant eature o the acquisition systems o theleadersUS, UK and France. Australia and Canada are yet to achievematurity in their deence acquisition systems as increase in deencespending in these countries is a recent phenomenon. Brazils new


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Table 2 Summary of Characteristics of Defence Acquisition Systems

of Select Countries

leadership is emphasizing on driving growth through its deence exportsin which it is making rapid strides, and is evolving rom a system grappling


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with eatures o inadequate links between planning and budgeting andmanagerial skills among decision-makers. Table 2 summarizes how thedierent systems compare with each other.

towardsan effectIve Procurement systemforIndIa

It is now apparent that each country has tried to establish a systemaccording to its own national priorities. While India and Canada realizetheir deence needs largely rom oreign procurement, the UK, US and

France have a mature deence industrial base and acquire domestically;and Brazil aspires to develop its deence own industrial base.

All these countries have continuously reormed their acquisitionsystems to meet their evolving deence needs and continue to do so inorder to enhance eciency and eectiveness in view o the competingresource pressures to keep deence spending within sustainable levels. Thekey elements demonstrated by the acquisition systems can be summarizedas given below.

(a) Clearly articulated deence strategic vision which clearly laysdown strategic objectives or which capabilities have to be built.

(b) A acilitating regulatory ramework.

(c) Very closely linked or unied system o capability planning andmanagement o resources.

(d) A strong perormance measurement ramework which seeksresults and accountability.

(e) An enabling organization which obtains its enabling characterby its work ethic and culture which in turn is deeply infuencedby the attendant structure and various processes connectedwith acquisition as also non acquisition processes, such as thosepertaining to perormance measurement, recruiting and retainingtalent, accounting and budgeting.

Having studied the other systems, it is time to refect upon what

India needs to do to evolve an eective deence acquisition system. Overthe last decade, signicant strides have been made in reorming deenceacquisition in India.

(a) Establishment o acquisition wing.(b) Evolution o deence procurement procedure.(c) A renewed ocus on planning which has led to evolution o the

LTIPP, SCAP, rom which the AAP is derived.


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At a systemic level, these all short o achieving the outcome o timelymaterialization o deence requirements. Although the system succeedsin procurement o items within the resources allocated within the year, itcannot be said with certainty that the supplies materialize in a cost-eectivemanner as the decisions are not based on options analysis and orce-mixstudies, and the value-or-money analysis is limited to the procurementcost and not the through-lie costs. To establish a result-oriented system,reorms in the areas o establishing a perormance management ramework

and inusion o proessionalism in decision-making are imperative. Thesecan be summarised as ollows.

(a) Articulate a deence strategy which has a denitive strategic visionand clearly lays down strategic objectives or which capabilitieshave to be built.

(b) Develop a strong perormance measurement ramework thatseeks results and accountability. India has a strong ramework oroversight, and reports rom the C&AG particularly illuminatethe state o deence procurement system. The CVC needs toocus its eorts on broad principles to ensure outcomes eectivelyand ecienctly instead o mere compliance with procedures in a

narrow sense. The internal mechanisms within the MoD need tobe strengthened beginning with the strategic plan, and objectivesand strategies to achieve those objectives. Thereater, perormanceindicators need to be established or each activity so as to measurehow daily activities contribute towards achievement o goals.

(c) Inuse the decision-making system with skilled proessionals rommanagement, technology and business. Institute mechanismsand fexibility or hiring and retaining the brightest with relevantindustry experience to build subject matter expertise. The currentpolicy o tenures at the Service HQ and the MoD in India doeslittle to help build specialization in procurement. Mechanismsneed to be put in place to incentivize individuals to become andremain procurement specialists. This could include specialistpay or promotion within a proessional vertical. Inusing theacquisition wing with specialists with externally recognizedqualications and proessional aliations should be considered,and this should apply to both military and civilian personnel.58

(d) Improve budgeting techniques rom traditional budgeting tooutcome-ocused budgeting techniques, including programmebudgeting.


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Acquisition reorm is a journey and not a destination59, and systemscan be continually reviewed or sharpening eectiveness, enhancingeciency, and making sure they achieve the desired outcomes. It is,thereore, clear that in order to establish an eective deence procurementsystem that can materialize on time the required capabilities to the armedorces at the best value or money, India needs to incorporate elementso strategic planning, eective budgeting and costing that are linked with

planning activities. It also needs to unshackle procurement rom proceduresand rely on analysis driven decision-making and to ensure that everyone inthe system ocuses on outcomes, inter alia, building a system or accountability.The key, thereore, is to evolve procurement principles rather than a detailed

step-by-step prescription o dos and donts, which encourages initiative and useo sound business judgment to urther policy objectives.

Figure 5 proposes a ramework or a high perorming procurementsystem: whatneeds to be done, who will do it, and howit can be done.

the wayahead

A transormation o this magnitude can rarely be achieved with a big bangapproach. Incremental improvements need to set the tone or desired

Figure 5 Framework for Delivering a

High Performing Defence Procurement System

Source: Author.


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change, get buy-in o the key stakeholders and prepare the oundation orlarger changes by way o quick gains, with minimal disruption to currentenvironment.

As a rst step, a perormance management ramework needs to be putin place along with building capacity o procurement teams and givingfexibility to procurement ocials to use their sound business judgment.This will lead to a principles-based procurement, bringing to the tablefexibility, responsiveness and analysis based decision-making. This will

also enable management o risks and provide the ability to obviate delaysand cost overruns arising out o risk avoidance, and eventually lead toimproving time rames and outcomes o procurement.

The second step would be strengthening the perormance managementramework among various overlapping unctions o planning, budgeting,and acquisitions, which will help establish accountability o individualsand teams.

The third step would be to streamline the procurement structure,making it an integrated, multidisciplinary, specialized body or makingprocurement decisions. As the oundation or a system that acilitates on-time delivery o military products and services at best value or moneyis laid, the ocus will shit rom compliance to risk management andachievement o desired outcomes.

While the organizational challenges are being addressed, a higherdirectionthat o integrating deence in the overall national developmentagendacan be obtained to build a responsive deence procurementsystem geared towards achieving dened national strategic objectives.

notes

1. Kiely, D.G., Deence Procurement: The Equipment Buying Process, London:Tri-Service Press Limited, 1990.

2. Comptroller and Auditor General o India (C&AG), Union Government[Deence Services]Compliance Audit o Army & Ordinance Factories, CAG

Audit Report No. 24 o 201112, New Delhi: C&AG.3. Ibid., pp. 2627.

4. C&AG, Perormance Audit Reports o Operation and Maintenance o Mi seriesHelicopters in the Indian Air Force and Functioning o the Aviation Arm o theIndian Navy, Report No. 7 o 2010-11, available at http://www.cag.gov.in/html/reports/deence/2010-11_7AFN-PA/chap2.pd, accessed on 27 June

2013.


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5. Ministry o Deence (MoD), Report o the Parliamentary Standing Committeeon Deence 2011-12, New Delhi: MoD, available at http://164.100.47.134/sscomittee/deence/nal, accessed on 27 November 2012.

6. Full text o Statement by Deence Ministry on Acquisition o Agusta

Westland VVIP Helicoptors, NDTV,14 February 2013, available at http://

www.ndtv.com/article/india/ull-text-statement-by-deence-ministry-on-

acquisition-o-agustawestland-vvip-choppers-330886, accessed on 18 April

2013.

7. India as a Great Power: Know Your Own Strength, The Economist, 30 March30 2013, available at http://www.economist.com/news/brieng/21574458-

india-poised-become-one-our-largest-military-powers-world-end, accessed

on 2 April 2013.

8. MoD, Deence Procurement Procedure 2011, n.d., New Delhi: MoD.

9. Niskanen, W., Bureaucracy and Representative Government, Chicago: AldineAtherton, 1971.

10. See MoD, Report o the Parliamentary Standing Committee on Deence 2011-12, n. 5, and Laxman Kumar Behera, Indias Deence Spending: A Trend

Analysis,Journal o Deence Studies, April 2009, p. 133.

11. Auhtors discussions with serving and retired ocials o the MoD.

12. Subhramanyam, K., The Indian Deence Acquisition System: Improving

Oversight and the System, Presentation at the International Seminar onDeence Acquisition, New Delhi: Institute o Deence Studies and Analyses,

2011.

13. India as a Great Power: Know Your Own Strength, n. 7.

14. Oce o Management and Budget, Table 3.2, Washington D.C.: The WhiteHouse, available at http://www.whitehouse.gov/omb/budget/Historicals/,

accessed on 29 April 2013.

15. Ministry o Deence, Government o UK, Signicant Milestone or

Deence Acquisition Reorm, 25 April 2013, available at https://www.gov.

uk/government/news/signicant-milestone-or-deence-acquisition-reorm

accessed on 29 April 2013.

16. Foucault, M., Deence Budget in France: Between Denial and Decline, Paris:

IFRI, 2012.17. Thomson M., Cost o Deence: ASPI Deence Budget Brie 201213,

Barton: Australian Strategic Policy Institute, available at http://www.aspi.

org.au/publications/publicationlist.aspx?pubtype=3, accessed on 1 May

2013.

18. Brazilian Military Outlines Budget Requirements, 30 September 2011,

available at www.janes.com/products/janes/deence-securityreport.

aspx?id=1065930395, accessed on 30 April 2013.


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19. Canada First: Leveraging Deence Procurement through Key IndustrialCapabilities Report, February 2013, available at http://www.tpsgc-pwgsc.gc.ca/app-acq/documents/eam-lmp-eng.pd, accessed on 30 April 2013.

20. According to revised estimates, a provision o Rs 69,579 crore was made (at

exchange rage o Rs 53.71 to US $ 1).

21. SIPRI Yearbook, Oxord: Oxord University Press, 2009, p. 301.

22. Malik,V.P. and V.Anand (eds), Deence Planning Problems and Prospects,New Delhi: Observer Research Foundation and Manas Publications, 2006,

pp. 188, 195.

23. Subrahmanyam K., Deence and Development: The Myths, Calcutta: TheMinerva Associates, 1973.

24. Brazils National Strategy o Deence, available at www.deesa.gov.br,

accessed on 22 November 2012.

25. Ibid.

26. Moreira, W.D.S., Organizational Structure and Procedural Framework

or Deence Acquisition in Brazil: The Challenge o Technology Transer,

International Seminar on Deence Acquisition, New Delhi: Institute o

Deence Studies and Analyses, 2011.

27. Canada First Deence Strategy, available at http://www.orces.gc.ca/site/pri/

rst-premier/index-eng.asp?WT.svl=CFDLEFT, accessed on 27 November

2012.28. Ghosh A.K., Deence Budgeting and Planning in India: The Way Forward,

New Delhi: Knowledge World, 2006, pp. 96108.

29. DOD 5000.02, available at http://www.mitre.org/work/sepo/toolkits/risk/

reerences/les/DoD5000.2R_Jun01.pd, accessed on 15 November 2012.

30. The Deence Vision, Deence Plan 2010-14, available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/le/27163/

Deence_Plan_2010_2014.pd, accessed on 22 November 2012.

31. Ibid.

32. US Department o Deence, Statement o Guiding principles or the FAR,

Federal Acquisition Regulations, 2005.

33. Roberts, N., The Synoptic Model o Strategic Planning and the GPRA,

Public Productivity and Management Review,Vol.23, No. 3, March 2000,pp. 297311.

34. GAO, Financial Audit: US Governments Fiscal Years 2012 and 2011,

Consolidated Financial Statements, available at http://www.gao.gov/

assets/660/651357.pd, accessed on 29 April 2013.

35. Deense Science Board, Creating a DoD Strategic Acquisition Platorm,Washington D.C.: Deense Science Board, 2009.


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36. Review o Deence Accountability Framework, available at http://www.

minister.deence.gov.au/2011/08/09/improving-personal-and-institutional-

accountability-in-deence/, accessed on 15 November 2012.

37. Ministry o Deence, UK, Deence Plan 2010-14, n. 28.

38. Hartley, K., The Economics o Deence Policy. London: Brasseys, 1991.

39. Ibid.

40. Ghosh, A.K., Budgeting or Desired Deence Capability,Journal o DeenceStudies, Vol. 2, No. 2, 2008.

41. Standing Committee on Deence, Report o the Standing Committee onDeence. New Delhi: Lok Sabha Secretariat, 2012.

42. Deence Procurement Policy Manual(Australia), chapters 1.2,3.2, 3.4, availableat http://www.deence.gov.au/dmo/gc/dppm/DPPM_1July12.pd, accessed

on 14 November , 2012.

43. Ibid., p 3.22.

44. Lindop A.J., Cost Eectiveness in UK Deence Procurement, London: TheCOEIA, Ministry o Deence, United Kingdom, n.d.

45. Deence Values or Acquisition, available at https://www.ao.mod.uk/

aocontent/operational/people/dva.htm, accessed on 26 November 2012.

46. MoD Poised to Privatize Part o Troubled Deence Procurement Process,

The Guardian, 24 April 2013, available at http://www.guardian.co.uk/

uk/2013/apr/24/mod-poised-privatise-part-deence-procurement, accessedon 29 April 2013.

47. Ministry o Deence, Signicant Milestone or Deence Acquisition Reorm,

25 April 2013, available at https://www.gov.uk/government/organisations/

deence-equipment-and-support, accessed on 29 April 2013.

48. UK Begins Acquisitions Reorm Deense World, available at http://www.deenseworld.net/news/8221/UK_Begins_Deence_Acquisition_Reorm#.

UX6pMxXD_IU, accessed on 29 April 2013.

49. House o Commons Deence Committee, Deence Acquisition: SeventhReport o Session 201213, London, 5 February 2013, available at http://

www.publications.parliament.uk/pa/cm201213/cmselect/cmdence/9/9.

pd, accessed on 29 April 2013.

50. Ibid.51. Alic, J.A., Managing US Deense Acquisition, Enterprise & Society, Vol. 14,

No. 1, 2013, pp. 136.

52. Stone J.C., A Separate Deence Procurement Agency: Will it Actually Make aDierence, Calgary: Canadian Deence and Foreign Aairs Institute, 2012,available at http://www.cdai.org/PDF/A%20Separate%20Deence.pd,

accessed on 27 November 2012.


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53. Improving Canadian Deence Procurement: Feedback From IndustryConsultations on the Opportunities and Challenges Facing the Deence Industryand Military Procurement, Ottawa: CADSI, 2009, p. 4.

54. Kapstein E.B., Smart Deense Acquisition: Learning rom French

Procurement Reorm, CNAS Policy Brie, Washington D.C.: CNAS, 2009,

available at http://www.cnas.org/les/documents/publications/CNAS%20

Policy%20Brie%20-%20deense%20acquisition_1.pd, accessed on 30

April 2013.

55. Federal Acquisition Regulation, available at http://www.acquisition.gov/

ar/current/pd/FAR.pd, accessed on 15 November , 2012.

56. Williams A.S., Reinventing Canadian Deence Procurement: A View romInside, Breakout Educational Network, 2006.

57. Brazil: The Legal Framework and the Deence System in A ComparativeAtlas o Deence in Latin America and Caribbean, 2012, Buenos Aires:RESDAL, available at http://www.resdal.org/ing/atlas/atlas12-ing-12-brazil.

pd, accessed on 27 June 2013.

58. McKane, Tom, Enabling Acquisition Change: A Report on UKs Ministry o

Deence ability to Undertake Through Lie Capability Management, 2006,

available at http://www.bipsolutions.com/docstore/pd/15938.pd, accessed

on 22 November 2012.

59. Stonecipher, Harry C., Getting it Right: Deense Acquisitions or the 21st

Century, Vital Speeches o the Day, Vol. 65, No. 20, 1999, pp. 621-23,retrieved rom http://search.proquest.com/docview/221450298?account

id=14771, accessed on 5 November 2012. This is rom an address delivered

to the 1999 Department o Deence Procurement Conerence, where the

then President and Chie Operating Ocer o The Boeing Co., discussed

success actors in bringing revolution in deence acquisitions.

Jds 7 3 VandanaKumar

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