Partial ban and differentiation of misdeeds of an entity or individuals from the equipment selected after following subscribed procedure were part of the recommendations of an expert committee on defence with regards to blacklisting of firms in defence business.
In its recommendations submitted to the Defence Ministry, the committee — headed by former secretary Dhirendra Singh — also hinted at a possible space for middlemen, besides urging the government to look at Indian private sector with trust to boost Make In India.
While observing that “misdeeds of an entity or its employees should not be visited on the equipment / system or platform which have been carefully chosen by the Services after following the prescribed procedure”, the committee recommended that “other contracts involving such (faulting) entity shall continue till a decision to the contrary is taken by the government”.
The recommendation was significant given that in majority of tainted defence deals, the alleged wrongdoings were often linked to altering specifications of equipment so as to make space for the favoured manufacturers.
Interestingly, in cases where only two firms competed for a defence contract and one was blacklisted resulting in a single vendor situation, the committee recommended that “the procurement will be progressed as per provisions without this being treated as a single vendor” at the technical evaluation stage.
It has also asked the ministry to treat such cases with “pragmatism” and keeping “national and public interests into account.” Unlike the existing policy which completely rejected the involvement of agents/ middlemen in defence procurement, the committee has hinted at a possible space for the involvement of legitimate representatives, middlemen, agents that may be in making in defence deals.
“The Committee has also deliberated upon the draft proposal of MoD for engagement of Agents by Foreign Vendors for capital procurements,” the 274 page report said adding, “The engagement of Agents / Marketing Intermediaries by Foreign Vendors would typically be done as…Omnibus for all defence equipment and services either globally; for the region, Only for a particular RFP or Only for civil equipment and services of the Vendor.”
While urging the government to treat Indian private sector at parity with Defence Public Sector Undertakings (DPSUs), Ordnance Factories, the report suggested creation of contractual and legal measures, adding that given the limited capability of the Indian industry, single vendor situations may be inevitable.