Date: November 13, 2013
Venue: Manekshaw Centre
Time: 9:00 AM
Background
As an outcome of the National Conclave on Technological Sovereignty,
2012, it was decided to focus on two key concerns for achieving Technological
Sovereignty. These concerns were (a) Further streamlining of the defence
procurement process and (b) Institutionalization of partnering with the
industry to achieve technological sovereignty.
The National Conclave on Technological Sovereignty, 2012, was held
because it is believed that the world is now in an era where warfare will be
asymmetric in nature and will be conducted using non-traditional means.
Such non-traditional means include, but not limited to, the following:
·
Cyberwarfare
·
Economic Warfare
·
Food Security Warfare
·
Water Warfare (blocking and releasing
very large amounts of water)
·
Information/ Social Media Warfare
Each one of them can severely impact the efficacy of the traditional
military capability. Each one of them requires a very different kind of
fortification and defence mechanism.
Cyberwarfare is an enabling mechanism for unleashing devastating damage
on critical information infrastructure, that includes financial systems, water
systems, dams, airlines, railways, social information dissemination and myriad
other installations of strategic importance.
The cyber-bombing of the nuclear centrifuges of Iran demonstrate the
capabilities of Cyberwarfare. The direct collateral damage in terms of riots,
human deaths etc were also avoided in this kind of warfare.
Therefore Cyberwarfare (ICTEC) enablement is of paramount importance for
national security.
The cyber-bombing of the Iranian nuclear centrifuges also demonstrated
the issue of compromised information technology equipment that made the
centrifuges malfunction and damage themselves. Therefore, Technological
Sovereignty is a necessary, but not sufficient condition for preparedness for
Cyberwarfare.
Given the nature of ICTEC, it is impossible to develop the entire value
chain within the military-industrial establishment, or even within the private
industry of the country. It would be necessary to involve sourcing from global
locations that would make the challenge of having non-compromised ICTEC a even
more challenging task. The issue is compounded by the lack of a dedicated ICTEC
cadre within the military establishment that can develop and evolve new
cyber-weapons.
Unfortunately, such cyber-weapons are not available in the global arms
market and countries that do not have such weapons have no ability to strike
back when cyber-attacked.
The discussions on strategic implications of Information and
Communication Technology (ICT) revolved around attaining technological
sovereignty and indigenous development through combined partnership of public
and private sector undertakings. The focal issue was India’s heavy dependence
in terms of imports of critical high-end equipment and software from foreign
countries. The lack of ownership over critical ICT technology can have serious
ramifications for India’s national security especially during times of
conflict.
Institutional Framework for Partnering with Industry
From the outcome of the National Conclave on Technological Sovereignty,
2013, it is clear that there is an urgency to create an institutional framework
that is able to involve the private sector in India to co-develop the roadmap
and the solutions required to meet the challenges of the new warfare paradigms
that are fast evolving. There is a need to have an autonomous body that can
co-opt expertise from the private sector to create technologies for atleast the
non-critical military requirements in the ICTEC area.
It is also absolutely necessary to buffer such an organization from the
constraints of the defence public sector units such that the private industry
is not forced to use or leverage under-utilized public sector capacity, both in
terms of industrial capacity as well as in terms of human skills. The body
needs to be given a free hand in conceptualizing the ICTEC needs (in
consultation with the military) and then enabling the private sector to develop
and deliver the requirements on a long-term basis, that follows an agreed upon
roadmap.
The contracts could be of duration of ten to twenty year contracts,
similar to what the Government of USA gives to its military contractors for
developing and supporting futuristic military technologies. It is recommended
that such an organization should have linkages to educational institutions of
repute and with significant co-investments from serious private sector players
from within the country.
 |
Therefore the National Conclave on Technological Sovereignty 2013 will deliberate on the way forward for the institutional process by delving into the following key issues:
(a) The legal structure of such an
institution and participation level of various stakeholders in its formation
(b) Governance structure of the institution to ensure sufficient functional
freedom of the entity
1. It is required to create a clear and acceptable process to identify stakeholders of this
institution from Ministry of Defence, Industry, Academia, Tri-services and
Think Tanks
2. The structure of the proposed institution could possibly be akin to the structure of Telecom Sector Skill Council
with an institutionalised government interface.
3. It is required to create an institutionalised interface with the
government which acts as a single point of contact for various government
ministries involved in Defence related procurement process
(c) Process and framework to facilitate joint
technology roadmap creation and execution by this body.
1. The Long Term Integrated Perspective Plan (LTIPP) covering the 15 year
period needs to be shared on an urgent basis or alternatively smaller parts of
it relevant to ICT industry needs to be shared while not waiting for the rest
of LTIPP to be shared with the industry.
2. The ownership norms for the intellectual property created under the
umbrella of this entity need to be clearly laid down and shared with the
industry to avoid any conflict of interest at later stage
3. There is a need to clearly lay down norms for exporting such co-created technologies
by the industry and the facilitation of the same by Government.
4. Ensure that the offset policy drives the desired direction of technology
in the industry.
(d) Research driven focus of this institution
1. Indian military needs to consider creation of a military technology
requirements identification body that is equivalent to the US DARPA structure
wherein personnel with deep understanding of the future of warfare formulates
the technology creation requirements.
2. Adopt program frameworks similar to Program 7 of EU for driving research
in an identified area.
3. The proposed Institution should focus on identification of dual-use
technologies (non-critical technologies) and subsequently promote/facilitate a
collaborative research & development ecosystem.
4. Sensitive technologies could be procured from Indian private sector
R&D labs after due security clearance of the personnel involved and the lab
infrastructure.
(e) Source and structuring of seed capital
1. Seed capital could be provided by MoD and could be enhanced by
contribution from large Indian industrial conglomerates who have an interest in
defence industry
Continuation of
the initiatives to streamline the Defence Procurement Process
It is generally perceived that the defence procurement process
disincentivizes local production of defence goods. This conclave will attempt
to identify the procurement issues as perceived by the industry and propose a
model Defence Procurement Process that can address the current situation.
The key issues & concerns identified are
a) Apprehensions of the adverse outcome of category prioritisation on the
defence modernisation drive. It appears from the prioritisation provision that
the acquisition of critical defence weapons/equipment may get hampered due to
the tedious process of categorisation of the procurement programmes and
providing reasons to support the decision to classify procurement into a
specific category. There is also a need for the categorisation committee to
critically examine essential factors like (a) capability of the industry, (b) the
difficulty in mastering complex high end critical technologies, (c) foreign
restrictions on military equipment and (d) the urgency of induction of
equipment by the armed forces before carrying out procurement categorisation.
b) Need to clarify issues related to taxes.
c) Provide simpler processes for evaluating indigenous content.
d) Provide clarity on industrial licensing, implementation and evaluation
of offsets.
e) Managing Offsets: There is a need of effective monitoring and
accountability in the offset process by (a) enhancing the knowledge and
experience of executing offsets, (b) enhanced transparency in offset contracts
and (c) increased interaction and cooperation among the stakeholders.
f) Need for fundamental changes specific to ICT
systems procurement:
The DPP is primarily designed for procurement of armament and weapon
system sector or essentially technology transfer areas which have long
lifecycle with little or no upgrades. The ready product is put through field
trials for evaluation. In service sector, field trials and 'show me before I buy' are not applicable.
It has been observed that in many cases related to ICT projects, the role of the System
Integrator is reduced to that of an installation organization responsible for
the complete system performance while the specifications mandate outright
purchase of COTS hardware & software with the exact bill of material
spelled out leaving limited scope for
optimization and leveraging the system integrator’s knowledge which could have
potentially provided a strategic advantage to the Indian military. Further the foreign headquartered hardware
OEMs usually work on up-front payment policies thereby not being a party to the
risk in case of a failure of a project.
g)
Multiple projects with pilot
approach followed by planned enterprise wide rollout coupled with long
procurement cycle are resulting in obsolete technology being adopted. This is
also resulting in multiplicity of technology platforms that do not necessarily
translate into an integrated solution. There is a need to plan for projects at
enterprise level followed by phased implementation if desired. The piecemeal
approach also potentially discourages larger players in ICT technology from
participating in systems development and investing in this sector for the long
term.
Defence Procurement Best Practices to be adopted
a)
The current procurement is
product centric which need to be transformed to roadmap centric. And hence, the
implementation of the Ministry of Defence’s declared policy of making relevant
parts of the Long Term Integrated Perspective Plan (LTIPP) public needs to be
accelerated.
b)
RFP Preparation
1.
The RFP
team of the defence HQs must include experienced officers from the field units
of the respective system or domain. The experienced officers should be involved
from stage of Accord of Necessity (AON) to the stage
when the project is under development.This
would lead to a realistic and more critical analysis and identification of the
requirements at the field level.
2.
In order to ensure higher
implementability of RFP’s, RFP’s should be formulated through an open forum
consultative process wherein all vendors with relevant vertical domain
knowledge participate. Since it is not possible to share the entire procurement
plan for particular systems procurement, hence the stakeholder consultation
should be limited to vendors from specialized verticals. The final RFP will be
the amalgamation of the outcome from each of these consultative processes with
the specialized verticals.
3.
There is a need to have a
robust and accountable change control mechanism for rapid inclusions/exclusions
from the RFP/EOI.
4. A public website can be created where non-mission critical and
non-confidential requirements/RFI for defence procurements can be hosted for
solution providers and academicians to propose a solution. Team ‘Orlando’ of USA
can be used as a prototype model for this kind of participative R&D and
production.
d) E-procurement should be widely adopted for ICTEC procurement by military
e) Institutional changes for streamlining procurement
1. Ensure a longer tenure for the Procurement personnel so that the
experiential learning process is not repeated frequently which hinders the
procurement process. Defence procurement must also attempt to institutionalise
knowledge, specially knowledge of vertical domains.
3. Creation of tri-services organization similar to Navy’s WESEE (Weapons Electronics Systems Engineering
Establishment) which is led by domain experts front the services
and which works on conceptualizing future technology requirements of the Indian
military.
4. Services of ex-Servicemen need to be leveraged to conceptualize, create,
deliver and support the technology requirements of the Indian Military. MoD
should consider formation of a defense consultative committee with due
representation of people from Services background.
5. Need to have cross-pollination of ideas between DRDO and the defence
forces through an institutionalized process of deputation from DRDO to the
Indian Military and vice versa. This would help in enhanced sensitivity towards
the constraints and requirements of the users and would help deliver
appropriate weapons technology.
f) Indian defence procurement must adopt a set of Open Standards to ensure
interoperability of systems procured at different points of time from different
vendors, thus reducing vendor lock-in, reducing cost of integration and
reducing the overall lifecycle cost of asset ownership.
g) MoD should create a repository of acceptable terms and considerations
for example escrowing of IPR.
h) Wherever possible, defence procurements should involve bidders beyond
L1, such as L2 and L3 in proportionately distributing the order as long as they
match the L1 prices. Also, defence procurement needs to consider adopting a
bidding process akin to the World Bank process wherein higher weightage is
given to the technically higher qualified entity.
i)
Offset Management
1. There is a need of dedicated forum for periodic interaction between all
stakeholders in order to have a
coordinated and synergistic approach towards implementation of offsets.
2. Defence Offset Management Wing (DOMW) needs to be strengthened and
manned with appropriate human resources who are empowered to make offsets a
reality.
3. The details of status of offset contracts and the names of Indian offset
partners are not available in the public domain. It would be beneficial if the MoD could provide
accurate and detailed information about the status of offset contracts and the
technology/capability received from each contract. Such information will help
the stakeholders to carry out cost-benefit and SWOT analysis. The stakeholders
could apply mid-course corrections to ensure that the gaps between the stated
and achieved objectives are minimized.
4. Transfer of Technology (ToT) should be the preferred choice for 30%
offset implementation as it have long term positive effect on indigenisation
production of critical and non-critical defence systems
j)
Legal Issues pertaining to ICT
projects are emerging very different than that being dealt with for other defence
procurements and hence there is a need to clearly identify and address them.
Some of the suggestions in this respect are
1. Exclusion of
clauses owing to the applicability for various kinds of ICT acquisition.
2. Moderation of clauses to tone down the severity attached.
Makes both buyer and seller equal stake holders for their respective duties
especially for technology & services where the final deliverable is still a
concept at the time of RFP.
3. Addition of new clauses as per global standards like
Limitation of Liability, IPR issues, Indemnification for all categories etc.
k) Evaluation and Acquisition of ICT Systems
1. Technical evaluation and acquisition process of ICT
will have to be planned with considerable inbuilt flexibility in the complete
acquisition process and should focus on the end result being sought rather than
paper compliance of bill of material.
2. The present two bid system used by Indian military
possibly encourages selection of “Minimum Acceptable” performance & quality
rather than “Best Possible” performance or quality because post technical
clearance all bids are treated at par and “L1” remains the only criteria. There
is a need to design selection process that gives due weightage to the
performance and quality of the system being procured in adjunct to the cost
factor. It is suggested that the present two bids L1 based selection system be
modified to an “Integrated Quality &
Cost Analysis System (IQCAS)”which is similar in approach to World Bank’s
procurement process.
3. The suggested
steps for vendor evaluation process are
i.
Create an exhaustive
list of Operational Requirements (ORs) for the ICT system to be procured and
assign marks and weightage to each OR for technical evaluation. The minimum
qualifying marks should also be stated for each OR in accordance with the
identified “mandatory specifications”.
ii.
Each vendor’s
offering would then be assessed against this marking system for all features
and aggregate Technical Score will be determined.
iii.
Mandatory
specifications should be clearly defined such that their non fulfillment would
automatically disqualify the bid irrespective of overall high score.
iv.
The final
score for vendor selection should be a function of both cost as well as
technical capability (Technical Score) of the ICT system assessed.
4. Commercial aspects related to bench marking and L1
criteria needs an overall change as quality in ICT is difficult to quantify and
hence qualitative matrix needs to be built for the evaluation and monitoring.
5. There should be a focus towards having the system independency of the
technology platform. This will result in functionality being the focal point driving the whole process.
l)
Institutionalize Knowledge Management system
in the Armed Forces
1. The need of Indian military need for
research, innovation and procurement can be served better by an efficient
Knowledge Management system which comprises of three core elements - Build,
Access and Disseminate.
2. The KM system will be proactive in
capturing the edge innovations from field units and in channelizing them
through proper R&D path for broader usage and adoption.
3. Specific specialist “Directorate” should
be setup within the Services for facilitating the creation, adoption and usage
of Knowledge Management system.
4. It is suggested that for wide
adoption and effective two way communication between the Services HQ and field
units, the system should be on a cloud based platform, something similar to
You-tube but with high level of security and user control features.
m) Promotion of Indigenous components
1. In order to mitigate vulnerabilities in India’s national information and
communication infrastructure, indigenous components should be given higher
weightage formally through Defence Procurement Policy
2. The Buy (Indian), Buy & Make (Indian) and Make (Indian) projects
should be given preference by the government in its defence procurements. The
Make (Indian) projects are a new addition and should be the most incentivised
n)
Anonymous
letter should not be entertained for initiating an enquiry. Due note should be
taken only of letters with proper sender details.
Conclusion
It is urgent and
imperative to quickly convert the above recommendations into reality in order
to ensure that the Indian Military continues to be a fighting force to reckon
with.
Since the nature of warfare is rapidly changing, it is absolutely
critical that the above proposed Institutional framework for collaboration
between the Indian Military, Indian Industry, non-Indian vendors, funding bodies,
academia and think tanks is brought into existence as soon as possible.
In the meantime, it is important to rationalize the procurement process
in order to strengthen the Indian defence industry and to ensure that the
Indian defence industry invests for the long-term into the technologies that
are required by the Indian military.
Appendix
Conduct of Seminar
1. The
Centre for Land Warfare Studies (CLAWS) will address the above issues
holistically in all their dimensions. This will be done in two sessions,
excluding the inaugural and valedictory sessions.
Inaugural Session
2. The
inaugural session will set the tone for future deliberations. It will consist
of the welcome address, the keynote address and the vote of thanks. The keynote
address will bring out the broad contours of the issues involved and will act
as a beacon for subsequent deliberations. The identification of challenges
posed towards achieving Technological Sovereignty in the field of ICTEC will be
the highlight of the address. A general
overview of the likely way forward would also form part of this address.
Session I : Institutional Framework for Partnering with
Industry
Session II :
Streamlining of Defence Procurement Process
Miscellaneous Details
4. The
seminar will be open to the media.
5. Participants. The
participants will be from the three services, strategic community, veterans and
academia.
6.
Venue. Manekshaw Centre
7.
Project Coordinator. Col
V Ganapathy, Senior Fellow CLAWS. He may be contacted at mob No 8130011407.
8.
Rapporteurs. Ms. Bhhavya Gahlaut for Session 1, Mr Jaikhlong Basumatray for Session
2 and Ms Pratibha Singh for Session 3.
9.
MC. Ms. Karanpreet
Kaur.
NATIONAL CONCLAVE ON TECHNOLOGICAL
SOVEREIGNTY - 2013
13
November 2013
PROGRAMME
|
Tea &
Registration
| |
|
0930h – 1030h
|
INAUGURAL
SESSION
Welcome Address: Maj Gen Dhruv C Katoch,
SM, VSM (Retd), Director, CLAWS
Theme
Address: Dr.Jaijit Bhattacharya, President CDEP
Keynote
Address: Lt Gen Anil Chait, PVSM, AVSM, VSM, ADC, CISC, HQ IDS
Vote of
Thanks : Maj
Gen Dhruv C Katoch, SM, VSM (Retd), Director, CLAWS
|
|
1030h –
1100h
|
TEA
BREAK
|
|
1100h – 1300h
|
SESSION
I: INSTITUTIONAL FRAMEWORK FOR PARTNERING WITH INDUSTRY
|
|
Chairperson: Lt Gen AK Sahni, SM,VSM,
DGIT
| |
|
1100h – 1105h
|
Introductory Remarks by the Chair &
Introduction of the Speakers
|
|
1105h – 1125h
1125h – 1145h
1145h – 1205h
|
·
Research Driven Focus to Identify
Organisation – Lt Gen JP Singh,
PVSM,AVSM(Retd), Senior Advisor DRDO
·
Governance Structures - Industry Rep from CII/ FICCI (TBC)
·
Legal Structures and Funding – Mr Amit Cowshish, Ex FA Acquisition, MoD(Finance)
|
|
1205h – 1240h
|
Interactive
Session
|
|
1240h – 1300h
|
Closing
Remarks by Chair
|
|
1300h-1340h
|
Special
Address & Interaction: Defence Acquisition Challenges
and Road Ahead for Technological Sovereignty – Mr SB
Agnihotri, DG Acquisition
|
|
1340h –
1430h
|
LUNCH
|
|
1430h –
1630h
|
SESSION
II: PROCUREMENT SYSTEMS & PRACTICES FOR TECHNOLOGY ACQUISITIONS AND
INDIGENISATION
|
|
Chairperson: Director
NASSCOM / CII / ASSOCHAM / FICCI Rep (TBC)
| |
|
1430h – 1435h
|
Introductory
Remarks by the Chair & Introduction of the Speakers
|
|
1435h – 1455h
1455h – 1515h
1515h – 1535h
1535h – 1555h
1555h – 1615h
|
·
Aligning
DPP for Technology Acquisitions and Indigenisation of Defence Technology – Lt Gen AV Subramanian, VSM, DG WE
·
Offsets as
Facilitator to Technology Acquisitions – Shri AK Gupta, Additional
Secretary (Dept of Defence Production)
·
ICT Procurement:
Procurement Challenges and Remedies – Lt Gen SP
Kochhar, AVSM**, SM, VSM, (Retd), former SO-in-C &Sr Col Comdt
·
ICT
Procurement: Streamlining Procurements, Evaluation–An
Industry Perspective (Rep From Industry )
·
Lifecycle
Management and Technological Management of ICT Systems – Lt Gen
Inderjeet Singh, AVSM,VSM (Retd) Former DG EME
|
|
1615h – 1645h
|
Interactive
Session
|
|
1645h – 1650h
|
Closing
Remarks by Chair
|
|
1650h –
1720h
|
VALEDICTORY SESSION
Valedictory
Address: Lt
Gen SP Kochhar, AVSM**, SM, VSM, (Retd), former SO-in-C & Sr Col
Comdt
Vote of
Thanks: Dr.Jaijit
Bhattacharya, President, Centre for Digital Economy Policy Research
|
|
1720h
|
TEA
AND DISPERSAL
|
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