Combat aircraft Rafale selection only beginning of the road
Published March 16, 2012
This is with reference to two articles — one by Kapil Kak, Air Vice Marshal (Retd) and additional director of the Centre for Air Power Studies Delhi and the other by Deba Mohanty, senior fellow in security studies at the Observer Research Foundation New Delhi with an overall title "The French Connection" published in the Age on Sunday on February 5, 2012 regarding the government's announcement on January 31, 2012 that it had selected the offer of the French company Aviation Marcell Dassaut fighter-bomber Rafale in the tender involving six bidders from various countries for the MMRCA contract.
As both authors state with appreciation, even the companies whose bids had been rejected have agreed that the 640 parametre-based technical evaluation of the six bids by the Air Force had been highly objective, professional and flawless. So had been the overall evaluation by the government. Both evaluations met all the provisions of the Defence Procur-ement Policy and procedure. However, to me, there still are some flaws which the government should have eliminated before having chosen and announced the Rafale. The first relates to getting the lowest possible life cycle costs for the entire "deal". The government has indicated that in the next six-nine months a "final" price would be arrived at for the overall contract. For that price to be really the lowest would have to involve arriving at "the best" prices for a number of elements and then a summation of all those elements.
The elements involved are: (a) the total price for the 18 aircraft to be purchased by the GOI/MOD in "fly away" condition; (b) detailed list and prices of spares supply; (c) scope and quantum of training of all types of personnel needed to operate and maintain those 18 aircrafts, as of the follow-on 108 to be manufactured at HAL based on transfer of technology not only from main/prime contractor AMD, but also from its specialised sub-system manufacturers from the French total aircraft integrator/manufacturer of the Rafale system — for that is what it is — a system and the price for such training; (d) scope and depth of TOT by Dassault to HAL right down to the most basic and generic components and materials e.g. a few rough castings and forgings for the air frame and the engines; and (e) likewise in regard to and the on-board the AESA Radar Avionics and Electronic Warfare equipments and all other electronics; (f) all other aircraft "systems" e.g. fly-by-wire control system (g) all weapon systems even if they were made by specialised French missile/bomb/machine gun and ammunition manufacturers; and (h) finally the computer software source codes of each and every computer software package in the aircraft along with their detailed itemised prices for each at the highest level of detail etc. should have been obtained by the Techno-Commercial Negotiating Final Choice Evaluating and Selecting Committee from both the finally shortlisted bidders — Dassalt and the EADS Consortium and thoroughly evaluated inter-se.
It is not clear from public domain information whether such and exhaustive exercise was/has been undertaken.
However, based on past experience and knowing how such Committees have worked in the past, it is unlikely to have been so undertaken in the present MMRCA. In fact, that such an inter-bidder competitive exercise covering (a) to (h) down to the above has in fact not been undertaken in the requisite detail so far is reflected in the repeated references, particularly in Mohanty's article which repeatedly refers to "final negotiations" with Dassault remaining to be done in the next six-nine months.
This in turn means that if in those negotiations, Dassault takes a rigid stand not to accept /agree to, what the GOI wants — be they technical, financial or contractual matters — the government would have little leverage on Dassault to bring them to heel because it is negotiating with a single bidder. However, perhaps such a detailed comparat-ive/multi-dimensional negotiation as outlined above has been done by the MOD in the (last) six months since the government announced Rafale (Dassault) and Euro fighter (EADS) as the final two shortlisted bidders. If that is indeed the case, Dassault should have accepted 98/99 per cent of the government's requirements on practically all counts.
But despite the above (hopefully) optimistic scenario, the following sentence in Mohanty's article does cause concern. Mohanty states that: It is still for the government ("still" word added by author) to specify certain critical technologies that it wants, negotiate hard and ensure compliance. These technologies are in as many as 10-12 areas (on the Rafale) including composite material based components and sub-units (in different parts of the aircraft), single crystal (engine) blade technology, complex software for simulating the performance of the entire aircraft as also of sections/sub units of it, the AESA (Airborne Electronic Scanning Array Antenna-based primary radar of the Rafale (the presence of which on the Rafale vis-a-vis the earlier technological generators mechanically scanning antenna of the Euro fighter, leaked-to-the media MOD reports argued was a major technological reason of our going in the Rafale.
"Leaving such technologically, financially and contractually criteria, up in the air and not being fully tied down before the government formally announced the Rafale selection is most unwise. Why? Because it leaves the government with no more negotiating leverage vis-Ã -vis the French, except the practically unthinkable step of cancelling the whole of the present MMRCA tenders and re-tendering — after 5 years of multifaceted work since the present tender was floated in 2007. All that will happen is that the MMRCA case will become another bitter experience in the numerous other major weapon systems involving initial finished supply of the system involved followed by TOT-based assembly-cum-later in-depth genuine manufacture.
Knowing it has been selected as the "won" contractor, the weapon system-cum-technology supplier just digs his toes in and refuses to given anything more to the government at this stage of the whole process even doing so is a mandatory condition of the original tender or Request for Proposal (RFP) — here of 2007. Such uncompromising intransigence in the MMRCA case would be 12 areas as referred to earlier.
However, in the present case, the fact that Rafale has not won any international/foreign orders at all, is contrariwise a major negotiating and decision-making weapon in the government of India's hands. Both AMD and the French government knowing that should the former not fully finalise and sign off with the MOD and HAL contracts fully acceptable to them, the GOI may cancel the whole MMRCA process a catastrophic step for both — AMD would have to close down and the French government face huge job losses and that too in an election year.
So, our Negotiating Team charged by the GOI and MOD to fully finalise and sign off the cluster of MMRCA-related agreements and contracts has an excellent opportunity to get for out country, the very best overall deal in all its respects. I can not conclude without drawing the attention of author of this article, Air Vice Marshall (Retd.) Kapil Kak, who has revealed his total lack of understanding of what "offsets" an MMRCA type contract really mean. He does so when he states that "the idea (of offsets) is that this contract should be the last ever import contract for a combat aircraft (in our country).
Firstly, the MMRCA contract is not an "import contract" — only 18 of the total number of 126 aircraft covered by the contract are to be in readily and fully "fly away" condition on Contract Signing. The remaining 108 — the vast bulk — are to be initially assembled and then genuinely manufactured in-depth here, using technology transferred by AMD and other involved French companies to HAL and a similar set of counterpart Indian companies.
Secondly, considerable "residual import content" by way of assemblies, sub-assemblies, components and raw material" would have to be continued to be imported during the aircraft's "phased manufacturing programme". But this would be the case with locally designed and developed Advanced Medium Combat Aircraft at one end, and the Fifth Generation Fighter Aircraft, Sukhoi-50 at the other end. The Su-50 is to be jointly developed on an Indo-Russian Cooperation basis.
For such development and production of the Su-50, a slew of inter-governmental agreement and inter-company contracts were signed in the last two years. Also, active technical work on the ground by both Indian and Russian specialist teams are currently underway.
The writer is former secretary to Government of India in various scientific departments and science adviser to late Prime Minister Indira Gandhi
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