The k2p blog

A decision on the winner of the $10 billion Indian MMRCA deal for 126 fighters could be announced in two weeks and the contract signed by September. But in the normal way of these things I expect that a number of the losing contractors will object to whoever is chosen and some of the objections may well be in Court. There is no large Government contract placed in India without allegations of biased and “fixed” evaluations by the losers. But eventually the number of decisions overturned by such objections is very few. Whoever is called for negotiations when the winner is announced is 95% certain of being awarded the contract.

Eurofighter take-off: image india-defence.com

The word on the street is that the 4-nation European consortium’s Eurofighter Typhoon still leads after the commercial and strategic evaluation having already won the technical evaluation . But all the offset proposals put forward by the contractors may not have been fully evaluated yet. It would seem that technical considerations for one ( Lockheed Martin’s F-16IN Super Viper) and strategic considerations for the other ( Boeing’s F/A-18 Super Hornet) may disallow the choice of the US fighters. The Saab JAS 39 Gripen is probably running second.

But there may yet be a surprise.

Business Standard reports:

Electrifying aerospace vendors at Aero India 2011 in Bangalore, Indian Air Force chief, Air Chief Marshall PV Naik, announced today that New Delhi would decide within two weeks about which medium multi-role combat aircraft (MMRCA) it would buy, and actually sign the US $10 billion contract by September.

A panoramic view of Aero India 2011: image Broadsword (4.bp.blogspot.com)

“The CNC (Cost Negotiation Committee) is likely to start in a week or two. Taking that as the datum and giving [the CNC] another 6-8 months, the contract is likely to be signed in September”, declared Naik.

The CNC is a group of officials that negotiates, between the Ministry of Defence and the winning vendor, a final price for the sale.

Naik’s boss, defence minister AK Antony, had stated at Aero India 2011 yesterday that the globally-watched contract would be finalised by the end of the next financial year 2011-2012, i.e. by March 2012. By setting the deadline six months earlier, Naik appears to have put the MoD under pressure.

Asked for a clarification by Business Standard, Naik’s officiating deputy, Air Marshall RK Sharma, confirmed his chief’s announcement. Sharma clarified that the winning vendor would be issued an invitation within two weeks to appear for cost negotiations, while the CNC would actually meet within two months. An invitation to a vendor to appear in a CNC is tantamount to announcing the winner of a contract.

“The DAC (the MoD’s apex Defence Acquisition Council) will formalise the winner soon; we will then invite that company for negotiations”, said Sharma.

Six fighters are competing for the IAF contract: Boeing’s F/A-18 Super Hornet; Lockheed Martin’s F-16IN Super Viper; the MiG Corporation’s MiG-35; Saab’s Gripen NG; Dassault’s Rafale; and a four-nation European consortium’s Eurofighter. Executives from these companies say they are baffled by Naik’s announcement. Asked in late-2010 to rework their offset bids, and with no date yet given for resubmission, the MoD does not have a key element needed to decide a winner.

“Is the MoD going to decide the contract winner without examining the offset bids?” asks a bemused executive, from one of the competing aircraft manufacturers.

……….

The air chief also voiced his apprehension that the contract could be delayed by “dissatisfied vendors (who) put a spoke in the wheel”, using allegations of wrongdoing to trigger long-running probes by investigation agencies.

Yesterday, a defensive Antony had announced that political considerations would play no role in deciding the winner. That seemed to suggest that the Cabinet Committee on Security (CCS), which will be required to approval the contract after the CNC negotiates a final price, would merely rubber-stamp the IAF/MoD decision.

Other than the impending contract for 126 medium fighters to boost the IAF’s dwindling numbers, the IAF chief also announced the impending conclusion, “within this financial year”, of the contract to upgrade the air force’s 20-year-old fleet of 52 Mirage-2000 medium fighters. This upgrade, which has been the subject of bitter negotiations between the IAF and French contractor, Thales, will give the Mirage-2000 another 20 years of service life by fitting on a new radar and a modern cockpit with state-of-the-art avionics and electronic warfare equipment.

While Thales had initially demanded US $52 million per aircraft, the deal has been concluded, say IAF sources to Business Standard, at US 39 million per aircraft.

Tags: Aero India 2011, Air Chief Marshall PV Naik, Eurofighter Typhoon, India, Indian Air Force, Indian MRCA competition, JAS 39 Gripen

This entry was posted on February 13, 2011 at 12:02 pm and is filed under Aviation, Defense, India, International Trade. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.