Indian Ministry of Defense Issues Request for Proposal to Six Vendors

Released on Tuesday, August 28, 2007

The Request for Proposal (RFP) for the procurement of 126 Medium Multi-Role Combat Aircraft (MMRCA) at an estimated cost of Rs. 42,000 crores for the Indian Air Force was issued today to six vendors � Russia's MIG-35(RAC MiG); Swedish JAS-39 (Gripen);Dassault Rafale (France); American F-16 Falcon (Lockheed Martin); Boeing's F/A-18 Super Hornet and Eurofighter Typhoon (Made by a consortium of British, German, Spanish and Italian firms). The 211-page document deals with various issues relating to initial purchase, transfer of technology, licensed production and life-time maintenance support for the aircraft. The RFP contains the selection model that would involve an exhaustive evaluation process as detailed in the Defence Procurement Procedures (DPP) � 2006.

The proposals from the likely contenders would first be technically evaluated by a professional team to check for compliance with IAF's operational requirements and other RFP conditions. Extensive field trials would be carried out to evaluate the performance. Finally, the commercial proposal of the vendors, short-listed after technical and field evaluations, would be examined and compared. The aircraft are likely to be in service for over 40 years. Great care has been taken to ensure that only determinable factors, which do not lend themselves to any subjectivity, are included in the commercial selection model. The selection would be transparent and fair.

Under the terms of purchase, the first 18 aircraft will come in a 'fly away' condition while the remaining 108 will be manufactured under Transfer of Technology. The vendor finally selected would also be required to undertake 50% offset obligations in India. The ToT and offset contracts would provide a great technological and economic boost to the indigenous defence industries which would include Defence Public Sector Undertakings, Raksha Udyog Ratnas and other eligible private sector industries. Foreign vendors would be provided great flexibility in effecting tie up with Indian partners for this purpose.

It may be recalled that the Defence Minister Shri A K Antony while chairing the Defence Acquisition Council Meeting on June 29, 2007 had outlined three guiding principles for this procurement scheme.

First, the operational requirements of IAF should be fully met. Second, the selection process should be competitive, fair and transparent, so that best value for money is realized. Lastly, Indian defence industries should get an opportunity to grow to global scales.