A BAE Systems gun in action.
An Oto Melara gun.
Posted on 01/19/2014 5:16:36 AM PST by sukhoi-30mki
The Navy’s plans to procure weapons for future warships are at risk of running aground. The force urgently needs 127mm guns, but its tender for 13 guns estimated at Rs 1,500 crore finds itself in rough waters. To start with, there were only two vendors for the guns globally. Now, while one has walked out of the tender, the other is facing uncertainty due to its parent company’s woes.
Sources said this could delay two key shipbuilding projects—the seven follow-on Shivalik-class frigates and six Delhi-class destroyers—that are in various stages of construction in domestic shipyards.
While the UK’s BAE Systems has refused to bid, Italian Oto Melara, whose parent company Finmeccanica is facing corruption probes back home, is keen on participating in the tender.
Finmeccanica is also the parent firm of helicopter manufacturer AgustaWestland, which is facing an Indian probe over allegations of bribes in a Rs 3,727-crore deal for supplying AW-101 VVIP transport choppers to the Indian Air Force.
This has presented the Navy with a fait accompli. Its tender is now on deathbed.
The BAE’s nonparticipation leaves only one vendor in the fray and that is a strict no-no under the present Defence Procurement Procedure (DPP). The DPP stipulates that there has to be a competition (at least two competing firms) before the contract is awarded to the lowest bidder.
The Navy is facing this situation also because the Defence Research and Development Organisation (DRDO) has not been able to design and develop a 127mm/5-inch gun indigenously.
“It is a pitiable state of affairs. We have not been able to develop an indigenous gun. Now, the search for a foreign gun too is virtually dead. In a single vendor situation, the tender is a nonstarter,” a Naval officer said.
While a representative of Oto Melara in India confirmed their participation in the tender, a BAE representative too confirmed their decision not to participate.
The Defence Ministry had issued the tender (Request for Proposals or RFP in defence parlance) to the two firms on November 12, 2013, and the companies were given time till March 2014 to respond.
Under the programme, India would buy two guns directly from the winner of the tender, while 11 more guns would be manufactured by Bharat Heavy Electricals Limited (BHEL) through transfer of technology from the global Original Equipment Manufacturer (OEM) that wins the contract.
But within a fortnight, BAE Systems wrote back saying the company does not intend submitting a proposal. “After conducting a detailed assessment of the RFP, the company has concluded that key aspects present the bidder with a disproportionate level of risk,” BAE Systems said in a response.
By “disproportionate risk” BAE Systems meant that the Defence Ministry was placing the onus of performance of BHEL in executing the contract with quality guns and timely deliveries on the foreign OEM, which would have no control over the functioning of the PSU. Non-performance by the PSU would entail penalties being imposed on the OEM.
“This risk would involve costs and we are sure the Indian government understands this,” a BAE Systems representative said. BAE Systems noted that it has vast experience in producing the Mk45 127mm/5-inch 62-calibre Mod4 gun and in establishing in-country manufacturing programmes. It claimed the gun matched the Indian Navy’s needs. The gun, it said, is in service with the naval fleets of Australia, Denmark, Greece, Japan, Republic of Korea, New Zealand, Spain, Republic of China (Taiwan), Thailand and Turkey.
The Oto Melara representative, in response to queries, said the company would reply to the Defence Ministry’s RFP by March 2014.
The Sunday Standard
A BAE Systems gun in action.
An Oto Melara gun.
Busted....... BAE declares they have participated in more than one rodeo and think it best not to play this purchasing agent’s tender games
whats the range of the gun? curious, and as to rate of fire.
That particulat OTO kooks like a 76mm.
Range is 30 km, rate is 40 rpm. It uses the same 5” round as th USN 5”/64 Mk 45 mount. There is also a VOLCANO round available for this gun (rocket assisted and guided) with a range of 100 km. And I stand corrected on the photo. I went to otomelara.it and found their latest 127mm. Their earlier 127mm had a larger turret, still comparable.
“Rs 1,500 crore”
A question on Indian currency. The Rs stands for Rupees but what does crore mean?
The standard Navy 5”/54 is manufactured by BAE’s U.S. subsidiary, which means that it’s not likely an alternative for India. BAE’s reluctance to participate may well be due to the corruption that is rampant in India’s defense acquisition community.
“BAE’s reluctance to participate may well be due to the corruption that is rampant in India’s defense acquisition community.”
If memory serves BAE bought an interest in Mahindra, India’s GE. They know the Indian marketplace well and are positioned to be there for the long haul.
My impression is that India is trying to address the corruption. Lower level requests for bribes from Majors and Colonels are being prosecuted. But, probably as here, the big money isn’t give directly to politicians. Here you find a publishing house and give them a bribe to give your politician a book contract. Or, you simply take the money to your designated Democratic headquarters and make a political “contribution” which is then forwarded (minus handling fee) to the politician you designate.
Crore is a numbering system used in South Asia. One crore = 10 million. So R1500 crore would be 15 billion Rupees or about $240 million.
Thank you very much.
True.
It’s amazing to see how corrupt practices are executed in stealth in the US, using surrogate fronts.
The high speed rail proposal in California was another such politically-motivated gravy train. Obamacare’s “navigators” are meant to put more people onto welfare services, the dependency ensuring Democrat votes.
Then you have the recent episodes of cheating in proficiency exams in the agencies responsible for the upkeep of nuclear missiles. The word out there is that they used cell phones to trade answers.
The US has plenty of internal corruption that’s blatant, and even more that’s conducted using fronts.
Yes, the USS New Jersey was off the Vietnamese coast from 1967 to 1969.
It sure is simpler using metric.
127mm = 5.00000000000000000000000000 inches
See how much shorter the metric representation is?
If corruption was a big issue for them, BAE wouldn’t have won two repeat orders for the Hawk AJT and made HAL an industrial partner on the trainer. And not to mention, trying to sell the M777 howitzer and Eurofighter.
This reluctance probably has to do with the fact that BAE offering is a US design, subject to US export controls. That would put it at a disadvantage with respect to Oto Melara, which already has a presence in India with the license manufacture of 76 mm guns.
Reluctance is more likely due to other factors. There is the corruption issue that I mentioned, and which has been endemic in Indian acquisition for decades. The India military just cancelled a 540 million Euro deal with Agusta for helicopters due to bribery. Other contracts have been tainted as well. But a more likely explanation could be recent history. BAE is still waiting for India to sign off on a deal for 145 M777 howitzers. India continues to drag its feet, forcing BAE to shut the production line down rather than wait any longer.
The Indian Army is dragging its feet on all artillery programmes because the current government seems scared of the Bofors bogey of the 1980s.
That’s an older model Mk45. The Mod 4 mount is more angular.
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