Batting for a radical change to make military procurements more efficient and time bound, a high level committee, government appointed committee has recommended the setting up of an autonomous defence acquisition organization (DAO) within the defence ministry that will be in charge of formulating policy, planning and executing weapons purchases for the armed forces.
Setting up a detailed roadmap for the creation of the new organization, the committee, headed by management guru Dr Pritam Singh has recommended the dismantling of the current system that is described as ‘diffused across the MoD and services’ and is prone to bureaucratic delays.
The report, prepared with a number of industry experts as well as senior defence ministry bureaucrats, is now being studied by the government, with defence minister Arun Jaitley keen to roll out reforms to unlock the potential of the defence sector.
The committee has recommended that the word acquisition be used instead of procurement for the new organization as it would cover a spectrum of activities, from policy making, planning and budgeting to execution.
The main objective of the DAO will be to provide a single point responsibility for acquisition of capabilities – combat platforms, systems and equipment as per plans and within the allocation of funds and the time agreed.
At present, acquisition is carried out within the defence ministry by a system that includes an additional secretary as the head, representatives from the services and several officials from the administrative services who move in and out from different ministries and sectors.
The idea, according to officials aware of the matter, is to create an organization that will not fall into the ambit of normal rules of the government. A long standing problem has been that officers and officials deputed to procurement hardly spend 3-5 years in the department before moving on to other unrelated duties, diluting a professional set up.
This issue has been addressed in the DAO by recommending a professional cadre that will man posts and will be independent of government rules on postings and deputation. “The normal rules will not apply. People will be able to have longer tenures and there will be a flexibility in hiring people, even from outside the organized cadres,” sources told ET.
To be headed by a CEO, who would nominally be equivalent to a Secretary, the DAO will have eight directors responsible for different areas of acquisition, including one with the critical responsibility of interfacing with the industry and governing exports. To make the organization autonomous, it has been recommended that it would be funded with a percentage of the funds that it utilizes every financial year. In the first year, this has been recommended to be Rs 400 crore.
While the committee has submitted a detailed roadmap for execution, the defence ministry will have its task cut out to roll out the reform, given that stiff opposition is expected from within the existing system on the radical changes recommended. Experts believe that it can take the plan two years to roll out – to both address the concerns of the system and create the systems required to set up the new organization.
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