Months before previous Army chief Gen V K Singh asked the CBI in May to probe Lt Gen Dalbir Singh Suhag for alleged irregularities in the purchase of parachutes for the Special Frontier Force,V K Singh himself had come in for scathing criticism in an internal defence audit for irregular purchase of parachutes when he was the Eastern Army Commander,it has now come to light. The audit had claimed that the deal had caused a loss of Rs 50 lakh to the Army.
V K Singh was Eastern Army Commander from 2008 until March 2010 when he took over as Army chief from Gen Deepak Kapoor. The defence audit refers to parachute purchases made in May 2009 and produced two reports dated October 17,2011 and January 17,2012. The reports have since been forwarded to the Defence Ministry and the Armys Eastern Command.
The audit has slammed the Eastern Command for what it says were irregular purchases of 25 combat free-fall parachutes at a cost of Rs 8.17 lakh per unit on urgent basis for operational purposes while the Western Command had procured parachutes at Rs 4.89 lakh per unit. It has also said that the Eastern Command did not go in for a global tender and paid inflated prices to a company which sourced the parachutes from a vendor in South Africa.
Instead of achieving a real,genuine and reasonable price for parachutes,the audit says that an effort was made to reduce the overall value of the order to below Rs 2 crore from Rs 2.04 crore as the financial powers of the army commander allow him to approve purchases only up to Rs 2 crore. Questioning this move,the audit has said that the purchase should have instead been referred to the main procurement agency of Army Headquarters.
V K Singh could not be reached for comment. Wing Commander Sanjay Thapar,owner of Skytech Solutions,the Delhi-based firm which supplied the parachutes to the Eastern Command,vouched for their quality and price.
These were good quality parachutes and the costs were not inflated. The cost of a parachute,depending on quality,can vary from Rs 1 lakh to Rs 15 lakh. No audit objection has been brought to my notice. I have supplied parachutes to other formations and there have been no complaints or objections, Thapar told The Indian Express.
But the auditors were obviously not in agreement. In the file noting,it has been mentioned that the negotiated cost of L1 vendor came to Rs 204.47 lakhs and it exceeded the powers of the Army Commander,it was found necessary to bring it down i.e. below Rs 200 lakh, say the audit reports,copies of which are with The Indian Express.
The PNC (Price Negotiation Committee) was accordingly held with M/s Skytech Solutions,New Delhi,and he agreed to reduce the price and the overall value was brought within the financial powers of the Army Commander. This is recorded in the file and obviously suggests that effort was more to bring it within the financial limits of the delegated powers rather than to achieve a real,genuine and reasonable price for this item. Finally,the total cost quoted by the vendor was Rs 1.99 crore.
The audit says the procurement was processed even though the parachutes did not match the weight specifications of the order. Even though 60 kg exit weight of products offered by both the firms did not match…stipulation of 75 kg,the sponsoring branch accepted the products based on explanations/examination given by one of the vendors that this feature of 60 kg is advantageous and should not be viewed as under-performance,the audit has said.
This recommendation,the audit says,was subsequently approved by the Technical Evaluation Committee (TEC) and the Army Commander even though the quoted specifications were not in conformity with that projected in the Technical Evaluation (TE). The audit also says that samples of the parachutes were not produced before the purchase: The technical bids of the firm were evaluated again with reference to brochures and technical data of offered products and not with reference to physical samples,which was in departure from the requirements projected for actual physical sample evaluation this time also.
However,despite these two deviations from the TE conditions,the TEC recommendations for processing quotes of two bidders were accepted by Army Commander in Jan 2009, the audit says,adding that the vendor had also not indicated the price at which the parachutes were being procured from the OEM in South Africa. This is not an ethical arrangement as it is completely violative of the provisions. This deficiency in the procurement process is to be characterized as a major financial irregularity…There is a clear financial loss,which may be Rs 50 lakh or more.
Apart from this South African firm,there are large number of firms who are capable of making supplies of this item. No market survey has been carried out and the command headquarters has relied primarily on the traders to do it for them and thereafter to supply this item at the rates quoted by them. Purchase of this item from a trading outfit agent like this is not only uneconomical,goods so purchased may not be of requisite quality. Placement of supply order on M/s Skytech Solutions was wholly irregular, the audit has said.