Buffeted by allegations of huge corruption in procurement for the armed forces, the Defence Ministry has decided to move towards an “end to end” e-procurement platform for all its needs.
The ministry issued an order on June 6 that all purchases above Rs 10 lakh now be sourced only through this platform. The limit will be made even tighter at Rs 5 lakh from April 1, 2015.
The order notes that “necessary instructions in this regard may kindly be issued for strict compliance of e-procurement by all organisations\offices under the Ministry of Defence”.
Explaining the rationale for the order, accessed by The Indian Express, Savitur Prasad, Principal Integrated Financial Adviser in the ministry, said that, till now, departments were required to only put up their tender notices on the portal. “But from now, tendering for any item required by the ministry will have to be processed online, right from placing of the orders to issuing of compliance certificates.”
The Defence Ministry is one of the largest government agencies for procurement. Including its revenue and capital expenditure, the budget for fiancial year 2015 as per the interim budget documents is Rs 2,24,000 crore. E-procurement will help to domestic manufacturing sector to take advantage of this huge stream of business.
The IT Department, aware of the scale of the defence purchases, has assured that the government machinery will not be a bottleneck. The additional secretary, Department of Electronics and Information Technology, promised “all possible support in this regard”, in a letter to Defence Secretary R K Mathur.
Prasad said the proposal had been getting delayed due to a number of mid-stream issues. The new BJP-led government is however determined to ensure that radical change is brought about in the way defence services buy their stuff.
Orders for high-value items including armaments will also move on this platform, which in turn will be visible to all potential suppliers. Prasad said a manufacturer from any part of India can now track the demands and apply in response to tenders — a change from when tenders were often managed by those with contacts.
The Comptroller and Auditor General had in several reports like on the purchase of coffins for soldiers killed in Kargil war pointed out the lack of transparency in defence purchases.
On Friday last week, the order to move to an IT platform immediately was issued after a meeting of senior Defence Ministry officials, including those from the armed services and from the Department of Information Technology. The Navy and Air Force had earlier raised objections that such a mechanism would make India’s defence preparedness too transparent, but the ministry officials were able to point out that international and even domestic purchases were in any case tracked by concerned entities and the e-procurement platform will make no difference.
E-procurement for mega ministries including Railways and Defence had been proposed by the former government too, to cut corruption. An inter-ministerial committee was set up in 2011 to expedite the process, but the plan was shot down as financial advisers of most departments pointed out the problems in implementation. As many as seven members of that committee put in dissent notes on moving procurement to an e-platform.