Procurement Risk:
Moderate
Score:
62/100
Government Policy
Q57
63/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. As part of the implementation of the report of the Group of Ministers on…
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In order to mitigate corruption risks, ensure transparency, accountability and probity in defence procurement, the following steps have been taken in the DPP-2016: The…
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Defence purchases are generally to be procured in accordance with the DPP-2016 [1]. Procurement must conform to the Canons of Financial Propriety under Rule…
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Q58
67/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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India’s Defence Procurement Procedure (DPP) is formalised and publicly available in a 489 page document on the Ministry of Defence (MoD) website [1]. The…
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Procurement procedures and guidelines are publicly disclosed [1][2]. Information is publicly available regarding assessment of needs [3]. Procurement tenders for departments with autonomous procurement…
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Procurement procedures and guidelines are publicly disclosed [1][2]. Given the secrecy of the MoD however, it is difficult to guarantee that the DPP is…
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Q59
75/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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The DPP-2016 states that the acquisition process for the five categories of procurement under the ‘Buy’ and ‘Buy & Make’ schemes will involve the…
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Procurement oversight mechanisms are robustly active. They engage in demanding explanations, issuing recommendations or conclusions that are being followed or implemented [1][2][3].
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There is evidence of active oversight activity by way of reports, announcements in the press of the cancellation of procurement programmes and the release…
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The process of defence acquisition in India is based on the fifteen years Long Term Integrated Perspective Plan (LTIPP), five years Services Capital Acquisition…
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Notice of planned purchases is subjective and depends on the specific defence purchase. High-profile defence purchases are made public by the media, prior to…
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Actual defence purchases are made public through an official press release by the Government of India’s Press Information Bureau; some strategic purchases are not…
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Data on tenders is available online. Non-sensitive defence tenders are published on the government’s Defence eProcurement Portal and the Indian Army provides information on…
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Capability Gap and Requirements Definition
Q62
50/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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Bidders and the Ministry of Defence (MoD) need to sign an Integrity Pact committing to not offering or accepting bribes, ensuring integrity in public…
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There is some evidence that the procedures outlined above are implemented. The government endeavours to ensure procedures will demonstrate the highest degree of probity…
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Q63
50/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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India currently does not have a public National Security Strategy [1]. This document is reported to be under review within government. The IISS Military…
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As alluded to in Q.59, scrutiny is conducted actively by a number of legally or constitutionally mandated oversight mechanisms such as CAG and the…
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Overall, the MoD seems to base their major purchases on identified requirements on the basis of LTIPP, SCAP and AAPs. “The idea of the…
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Tender Solicitation, Assessment and Contract Award
Q64
NEI/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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There is not enough evidence to score this indicator, as the proportion of defence procurement conducted as open competition cannot be ascertained. The Defence…
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Single-source defence procurement statistics are not readily available. However, as noted in indicator 64A, the government has stated on record recently that 40% of…
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Q65
69/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Officials with a role in designing tender specification, or in tender board decisions, are subject to clear regulations and codes of conduct that are…
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Tender boards are subject to regular auditing by the Comptroller and Auditor General (CAG). The Central Vigilance Commission (CVC) conducts regular review meetings and…
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Tender board regulations, codes of conduct and procedures seem to be fully transparent [1][2][3][4].
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Tender boards are subject to regular auditing by CAG. The CVC conducts regular review meetings and conducts a technical examination of public procurement. It…
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Q66
50/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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A legal framework is in place that discourages collusion in the defence sector, primarily the Competition Act, 2002 [1]. The Competition Commission of India…
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The CCI can grant a temporary injunction restraining parties from violating the Competition Act, 2002. Under Section 27 of the Act, the CCI can…
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Evidence of enforcement in other sectors exists but there is no evidence of collusion in defence sector bidding and the prosecution of such activities…
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The CCI’S “Diagnostic Tool – Towards Competitive Tenders” provides guidance on procurement and identifying collusion practices and competition issues; it further encourages procurement officers…
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Contract Delivery and In-Service Support
Q67
56/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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The DPP-2016 lays out procedures for contract and post-contract management. The concerned Service Head Quarter (SHQ) is entrusted with contract management and administration. The…
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There is not much information publicly available pertaining to contract failures and modifications. There are a few reports in the media such as the…
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There are elements of monitoring. The Acquisition Wing submits quarterly Contract Implementation Reports (CIR) to the DPB [1]. The MoD at any stage/tier of…
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There is strong evidence of enforcement in cases of corrupt practices and failure to meet offset obligations [1][2]. The deficiency seems to lay in…
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Q68
75/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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Different mechanisms exist for cases which fall inside of delegated powers of SHQs/IDS/CGHQ and those that fall outside of delegated powers. A vendor, having…
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The mechanisms seem to be accessible and cost effective. A vendor is required to file a complaint within two weeks, leaving a short window.…
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Under Section VI (23) of the guidelines for handling complaints in DPP, protection will be given to whistleblowers as per CVC guidelines [1]. As…
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There is no comprehensive central legislation which exclusively covers public procurement in the defence and security sector. Offending suppliers are punishable primarily under the…
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In the past, there is evidence of undue political influence, notably in the Bofors scandal where the then Prime Minister Rajiv Gandhi was implicated.…
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There is evidence that sanctions have been recently applied such as suspension and banning. As of 2018, six firms were debarred from further business…
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Offset Contracts
Q70
75/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Offset contracts are permitted and regulated by legislation. The government conducts due diligence on contractors and third parties during offset contract negotiations as per…
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The government conducts due diligence on contractors and third parties during offset contract negotiations as per the DPP. The general terms and clauses of…
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India’s Defence Offset Policy primary objective is to leverage the capital acquisitions to develop India’s defence industry. It aims to do this through encouraging…
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Information on offset projects can be found in Standing Committee on Defence reports and CAG reports/press releases. Some information is made public in the…
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CAG had observed from 2007-2011 that there were deficiencies in management of offsets. These included invalid selection of IOPs, zero value addition by the…
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There is evidence suggesting that there is robust enforcement. In February 2018, the MoD informed the Standing Committee on Defence that out of 42…
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India’s offset policy has centered on the nation’s core defence objective of promoting indigenisation to achieve self-reliance. It was created to reduce the level…
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Agents / Brokers
Q73
75/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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Historically, the ‘dalal’ or broker has been an integral part of business dealings for time immemorial in the subcontinent. In recent times, India has…
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The DPP-2016 guidelines clarifying the nature and use of agents, brings better transparency and probity in defence dealings. Violations of the guidelines would lead…
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Financing Package
Q74
75/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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Elements of the principle aspects of the financing package surrounding arms deals are publicly available prior to the fulfilment of contracts. These are primarily…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. In the past, Cold War ties could have played a role in India’s decision-making.…
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This indicator is not assigned a score in the GDI. The government usually cites a justifiable military need for purchases and from particular supplier,…
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This indicator is not assigned a score in the GDI. According to experts, this requires a case-by-case analysis. For example, with the controversy over…
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