Eurofighter tries to spoil the Indian MMRCA Rafale deal

Rafale de l'Escadron de Chasse 1/7 Provence

Rafale de l'Escadron de Chasse 1/7 Provence: Wikipedia

It is not unexpected or unusual in the award of large Indian contracts that the “losing” bidder cries “foul” and claims that the evaluation process was manipulated. From my own experience in the Power industry it is “standard practice” for a losing bidder to enlist the aid of the media, politicians and the courts in crying foul and in trying to get an award to a competitor overturned. Again, from my own experience, such tactics can often delay awards but rarely succeed. Such “spoiling” can cause much rancour with the client and – more often than not – is counter-productive. In marketing and sales for large projects in India, “spoiling” a competitor’s award is rather easy but only delays matters and is not really worthwhile. The real sales skill lies in getting to be the lowest bidder and then beating off the “spoilers”.

Dassault’s Rafale was announced as being the lowest bidder beating the Eurofighter for the $20billion Indian MMRCA contract at the end of January. Now comes the cry of “possible foul”  from a Member of the Upper House of Parliament (Rajya Sabha) who is also a member of Parliament’s standing Defence Committee. (The MP, MV Mysura Reddy,  is a former member of the Congress Party who left to join the regional Telegu Desam party. He has lost 3 elections for Parliament but has been appointed by his party to the Upper House).

I am just surprised that it has taken the Eurofighter lobby so long to mobilise and find a sympathetic politician. Since the contract signature is expected in the new fiscal year (after April 2012) it could be a matter of timing for maximum “spoiling” effect.  Journalists are probably being inundated with allegations about the “unfairness” of the various evaluations. No doubt the lobby is also considering court actions to try and delay the award to Dassault for the Rafale. While taking the Government to court can sometimes work to delay matters, it is a course that is fraught with the danger of being blacklisted and is very rarely successful. The Rafale sales team must also be pondering their tactics for beating off the spoilers (and they would be incompetent if they were not doing so). In India the Sales Process is not over until the first down-payment is received and even that is no guarantee that the contract will not be cancelled later. And of course  the never-ending negotiations for contract claims start the moment the contract is signed.

Hindustan Times: Defence minister AK Antony has asked his ministry to ascertain facts on the evaluation process that led to the emergence of the French Rafale as the lowest bidder for the $20-billion combat fighter deal, after a member of the standing committee of Parliament on defence raised a few red flags in a letter in February. The member, MV Mysura Reddy, is a Telugu Desam Party MP in Rajya Sabha.

In his letter, Reddy has alleged irregularities in the evaluation process and demanded that Antony get the entire matter probed. The letter asks why the Rafale, which has not been bought by any other country, has been chosen for the Indian Air Force. It also points to the fighter jet’s performance in the recent air campaign in Libya, saying “the Rafale failed in precision bombing”. Furthermore, it quotes from unspecified news reports about alleged irregularities.

“The ministry… must ensure… there has been no manipulation in the evaluation process,” the letter, dated February 27, goes on to say. In his reply on February 29, Antony said: “I have asked the ministry to examine all the points raised by you.”  …… 

The Rafale emerged as the lowest bidder in the deal for the supply of 126 fighters to the IAF on the basis of extensive trials and complex calculations, including unit cost, lifecycle cost and transfer of technology. Eighteen fighters will be supplied from mid-2015 onwards and the rest will be manufactured in India over the next six years.

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