Emergency procurement for Armed Forces: Govt to foreclose contracts if no delivery in a year, says defence secretary

“In the current round of emergency procurement, we have taken a very tough stand that any case where delivery is not done within one year, it will all be foreclosed. I seek to ensure that it is done, irrespective of who it is, which company or which country, we will foreclose every contract after one year,” Singh said. “Those types of decisions will bring in some sort of accountability when it comes to delivery milestones,” he said.

The Indian Express was the first to report in September that as part of policy changes being made by the Ministry of Defence to expedite and streamline critical military acquisition, defence procurements via the emergency route would have to be compulsorily delivered within a year of signing the contract, failing which the contract would be cancelled.

The decision has been taken following concerns that many of the procurements made through the emergency route earlier, particularly during the months of the military standoff along the Line of Actual Control in eastern Ladakh, were not delivered on time, defeating the very purpose of emergency procurement.

Weeks after Operation Sindoor, the government had granted emergency powers to the three services, allowing them to use up to 15 per cent of their capital budgets to urgently purchase ammunition and equipment for replenishment of operational stocks.

Talking about the delays in delivery of critical military procurements, Singh said it’s not just the domestic manufacturers who are to be blamed. “You’ve seen the S-400s getting delayed due to conflicts. Israel’s orders are also delayed due to the conflicts it is facing. There are supply chain issues with the General Electric engines (for Tejas Mk 1A),” he said, adding that there is a tendency to over-promise and under-deliver.

He said the ministry should be imposing higher LD costs (liquidated damages) — a fixed amount mentioned in a contract which one party pays to the other in case of breaches such as delays in completion of a project.

Singh also said that Putin’s visit to India next month would focus on broader defence cooperation. “Potentially, additional S-400 is not ruled out, but don’t expect any announcements during this meeting,” he said.

He said he did not want to talk about specific procurement decisions. “That is essential, giving a warning of what has to be made in cabinet decisions. So, I am not going to be talking about specific platforms, but we have a large defence programme with them (Russia), including existing contracts which are delayed,” he said, adding that there would be efforts to ensure that some of these delivery delays are ended and the Indian side gets some clear answers on when some of these delayed deliveries will take place.

Singh also said the government is in the process of finalising the fighter jet engine programme with a leading international engine house to co-develop a 120KN jet engine entirely domestically produced with full IPR (Intellectual Property Rights) to be held in India. “That is hopefully going to go to the top level in government soon, but it will take around 10-12 years,” he said.

India has decided to join hands with France under a government-to-government deal to jointly make a new 120KN engine for the indigenous Advanced Medium Combat Aircraft, as stated earlier by Defence Minister Rajnath Singh.