Pakistan Defence
Interesting - Murky Competition for $2B India Howitzer Order May End Soon… Or Not
Indias $2 billion purchase of about 400 new 155mm self-propelled howitzers is intended to supplement Indias dwindling artillery stocks, while out-ranging and out-shooting Pakistans self-propelled M109 155mm guns.
It seems simple enough, and BAE Systems Bofors has been competing against systems from Israels Soltam and Denel of South Africa.
Unfortunately, the competition has mostly served as a cautionary tale, a years-long affair filled with legal drama, accusations of corruption, and more than one re-start. Meanwhile, Indias stock of operational 155mm howitzers has dwindled to around 200. In 2007, a new RFP was issued, and the competition was expanded. Is there an end in sight? Or a potential winner?
* Competition Background
* Contracts and Key Events
* Additional Readings
Competition Background
US-India Defense and Strategic Affairs reported on the competition in 2004, and noted that this was expected to be one of the first large defense procurement decisions made by Indias new United Progressive Alliance government. The question now is whether a decision can be made within that governments term(s) of office.
After multiple firing trials and several years, Indias competition managed to end up without any competitors left standing. All 3 competitors (Bofors FH-77B05, Soltam TIG 2002, Denel G5/2000) failed to meet Indias accuracy specifications in 2003 trials, but all three improved their guns to compete again in 2004. There are reports that Soltam fell out of the race after its barrel burst during field trials, while South Africas Denel sidelined in 2004 and then eliminated in 2005, after the Indian government accused the manufacturer of corruption in another defence deal.
That created problems on 2 fronts. Denels financial situation was deteriorating, and The Times of India reported that the contract may have been critical to the firms financial survival. In hindsight, that concern was valid, bt Denel managed to survive the loss. A win certainly would have made a significant difference, and might have allowed Denel to delay its major corporate restructuring and associated strategic rethinking for several years.
ORD_FH-77B05_L52_155mm_Artillery.jpg
Bofors FH-77B05:
Winner by default?
The other problem involved Indias Ministry of Defence. DID has noted the extreme risk-averse behavior of Indias defense procurement establishment and its effects on contract awards, however, and Defense India notes that when a competition devolves to a single-vendor solution, the practice is often to re-tender.
The resulting dithering was relieved when allegations that Bofors had paid INR 640 million (about $16 million) in bribes to secure the order eliminated the last contender. Bofors Defence AB had been blacklisted by India before, after allegations of kickbacks in a 1987 deal during Rajiv Gandhis regime. That scandal had derailed a planned 1,500 gun buy, reducing it to 410 FH-77B howitzers.
Those accused in the Bofors case would eventually have their day in court, however, and win. In April 2007, India re-opened its howitzer competition again, and the passage of time had created a number of changes in the requirements and options.
Meanwhile, the support contract with Bofors for Indias in-service howitzers expired in 2001, and Indias stock is believed to sit at just 200 operational 155/39 caliber guns as of January 2009.
Contracts and Key Events
Jan 14/09: An anonymous Army official tells Indian reporters that:
The procurement process for the towed and light howitzer is proceeding as planned. Bids have been received from all the vendors and trials of the guns are planned in February or March [of 2009].... The trials for self-propelled howitzers are planned in May-June [2009].
According to the IANS report, the initial contract involves 180 guns, but the eventual contract is to include up to 400 guns, thanks to transfer of technology to build the howitzers in India. Of these, 140 will be light howitzers that will be spread over 7 regiments. They will still be 155/52 caliber, just lighter thanks to advances in metallurgy and design. The remaining 260 guns will be towed and self-propelled variants. IANS via ndia Defence | Hindustan Times.
April 4/07: Re-tender is exactly what happened. Sujan Dutta of The Calcutta Telegraph reports that India has reopened its artillery competitions entirely, refloating 2 global RFPs to 12 makers of 155mm/52 calibre self-propelled guns. The Indian Army reportedly proposes to buy 400 systems at the outset: 180 tracked and 220 wheeled.
The first new tender was for wheeled guns, with an RFP floated in early March 2007. The second tender for tracked guns was floated at the end of the month. Expected competitors include BAE Land Systems USA (M109A6 Paladin possible in tracked), BAE Bofors (FH77B towed, Archer wheeled), Frances Nexter (Caesar wheeled), Rheinmetall (Zuzana wheeled from Kerametal in Slovakia, possibly PzH-2000 tracked), Koreas Samsung Techwin (K9 tracked), and Israels Soltam (Atmos 2000 wheeled, Rascal tracked).
In making its decision to re-float the RFP, the cabinet committee on security reportedly concluded that:
* A single-vendor situation must be avoided;
* South Africas Denel had emerged as the single vendor for the tracked version, but they were blacklisted in 2005 on another deal;
* The process delays of 5 years since the first tender have been so great that the field as a whole has advanced since then;
* The standards for the selection of the guns need to be revised; and
* Indias defence procurement policy has been revised in the interim, and the RFP should reflect that.
Jan 16/06: A new scandal is swirling around re-opened allegations of kick-backs involving Bofors, and complicity by the current government in covering them up.
Jan 13/06: The Press Trust of India (PTI) reports that Army Chief General J J Singh has ordered a 4th round of extensive trials for the guns, in which only the Bofors and Soltam guns will be taking part. He said the two contending 155mm/52 caliber guns would be evaluated through summer and winter trials, with the winner inducted by 2007.
DID thought that was a bit optimistic...
Jan 12/06: The Times of India reports that Indias UPA government has floated new global tenders for collaboration in the Nalanda ordnance factory project to manufacture 155mm Bi-Modular Charge Systems (BMCS) for Indias artillery. See this link from BAEs SWS Defence for a more in-depth look at a particular BMCS solution.
South Africas Denel had been picked, but the blacklisting stemming from the anti-material rifles deal is having further ripple effects. The winner of this competition will be well positioned for any follow-on orders involving Indias new howitzers.
July 28/05: South African competitor Denel is blacklisted from Indian defense contracts by the Ministry of Defence, as a result of the CBIs bribery investigation.
June 15/04: Madison Government Affairs, summarizing Defense News:
The Indian Army will choose among three foreign contenders for a $2 billion purchase of about 400 155mm self-propelled howitzers after field trials in the Rajasthan desert later this month, an Indian Defence Ministry official said. The candidates are the Swedish SWS Defense AB FH77B05 L52, the Israeli Soltam TIG 2002 and the South African Denel G5/2000 gun. All three failed to meet Indias accuracy specifications in last years trials; all three improved their guns to compete again this year, said an Indian Army official from the artillery directorate
Indias $2 billion purchase of about 400 new 155mm self-propelled howitzers is intended to supplement Indias dwindling artillery stocks, while out-ranging and out-shooting Pakistans self-propelled M109 155mm guns.
It seems simple enough, and BAE Systems Bofors has been competing against systems from Israels Soltam and Denel of South Africa.
Unfortunately, the competition has mostly served as a cautionary tale, a years-long affair filled with legal drama, accusations of corruption, and more than one re-start. Meanwhile, Indias stock of operational 155mm howitzers has dwindled to around 200. In 2007, a new RFP was issued, and the competition was expanded. Is there an end in sight? Or a potential winner?
* Competition Background
* Contracts and Key Events
* Additional Readings
Competition Background
US-India Defense and Strategic Affairs reported on the competition in 2004, and noted that this was expected to be one of the first large defense procurement decisions made by Indias new United Progressive Alliance government. The question now is whether a decision can be made within that governments term(s) of office.
After multiple firing trials and several years, Indias competition managed to end up without any competitors left standing. All 3 competitors (Bofors FH-77B05, Soltam TIG 2002, Denel G5/2000) failed to meet Indias accuracy specifications in 2003 trials, but all three improved their guns to compete again in 2004. There are reports that Soltam fell out of the race after its barrel burst during field trials, while South Africas Denel sidelined in 2004 and then eliminated in 2005, after the Indian government accused the manufacturer of corruption in another defence deal.
That created problems on 2 fronts. Denels financial situation was deteriorating, and The Times of India reported that the contract may have been critical to the firms financial survival. In hindsight, that concern was valid, bt Denel managed to survive the loss. A win certainly would have made a significant difference, and might have allowed Denel to delay its major corporate restructuring and associated strategic rethinking for several years.
ORD_FH-77B05_L52_155mm_Artillery.jpg
Bofors FH-77B05:
Winner by default?
The other problem involved Indias Ministry of Defence. DID has noted the extreme risk-averse behavior of Indias defense procurement establishment and its effects on contract awards, however, and Defense India notes that when a competition devolves to a single-vendor solution, the practice is often to re-tender.
The resulting dithering was relieved when allegations that Bofors had paid INR 640 million (about $16 million) in bribes to secure the order eliminated the last contender. Bofors Defence AB had been blacklisted by India before, after allegations of kickbacks in a 1987 deal during Rajiv Gandhis regime. That scandal had derailed a planned 1,500 gun buy, reducing it to 410 FH-77B howitzers.
Those accused in the Bofors case would eventually have their day in court, however, and win. In April 2007, India re-opened its howitzer competition again, and the passage of time had created a number of changes in the requirements and options.
Meanwhile, the support contract with Bofors for Indias in-service howitzers expired in 2001, and Indias stock is believed to sit at just 200 operational 155/39 caliber guns as of January 2009.
Contracts and Key Events
Jan 14/09: An anonymous Army official tells Indian reporters that:
The procurement process for the towed and light howitzer is proceeding as planned. Bids have been received from all the vendors and trials of the guns are planned in February or March [of 2009].... The trials for self-propelled howitzers are planned in May-June [2009].
According to the IANS report, the initial contract involves 180 guns, but the eventual contract is to include up to 400 guns, thanks to transfer of technology to build the howitzers in India. Of these, 140 will be light howitzers that will be spread over 7 regiments. They will still be 155/52 caliber, just lighter thanks to advances in metallurgy and design. The remaining 260 guns will be towed and self-propelled variants. IANS via ndia Defence | Hindustan Times.
April 4/07: Re-tender is exactly what happened. Sujan Dutta of The Calcutta Telegraph reports that India has reopened its artillery competitions entirely, refloating 2 global RFPs to 12 makers of 155mm/52 calibre self-propelled guns. The Indian Army reportedly proposes to buy 400 systems at the outset: 180 tracked and 220 wheeled.
The first new tender was for wheeled guns, with an RFP floated in early March 2007. The second tender for tracked guns was floated at the end of the month. Expected competitors include BAE Land Systems USA (M109A6 Paladin possible in tracked), BAE Bofors (FH77B towed, Archer wheeled), Frances Nexter (Caesar wheeled), Rheinmetall (Zuzana wheeled from Kerametal in Slovakia, possibly PzH-2000 tracked), Koreas Samsung Techwin (K9 tracked), and Israels Soltam (Atmos 2000 wheeled, Rascal tracked).
In making its decision to re-float the RFP, the cabinet committee on security reportedly concluded that:
* A single-vendor situation must be avoided;
* South Africas Denel had emerged as the single vendor for the tracked version, but they were blacklisted in 2005 on another deal;
* The process delays of 5 years since the first tender have been so great that the field as a whole has advanced since then;
* The standards for the selection of the guns need to be revised; and
* Indias defence procurement policy has been revised in the interim, and the RFP should reflect that.
Jan 16/06: A new scandal is swirling around re-opened allegations of kick-backs involving Bofors, and complicity by the current government in covering them up.
Jan 13/06: The Press Trust of India (PTI) reports that Army Chief General J J Singh has ordered a 4th round of extensive trials for the guns, in which only the Bofors and Soltam guns will be taking part. He said the two contending 155mm/52 caliber guns would be evaluated through summer and winter trials, with the winner inducted by 2007.
DID thought that was a bit optimistic...
Jan 12/06: The Times of India reports that Indias UPA government has floated new global tenders for collaboration in the Nalanda ordnance factory project to manufacture 155mm Bi-Modular Charge Systems (BMCS) for Indias artillery. See this link from BAEs SWS Defence for a more in-depth look at a particular BMCS solution.
South Africas Denel had been picked, but the blacklisting stemming from the anti-material rifles deal is having further ripple effects. The winner of this competition will be well positioned for any follow-on orders involving Indias new howitzers.
July 28/05: South African competitor Denel is blacklisted from Indian defense contracts by the Ministry of Defence, as a result of the CBIs bribery investigation.
June 15/04: Madison Government Affairs, summarizing Defense News:
The Indian Army will choose among three foreign contenders for a $2 billion purchase of about 400 155mm self-propelled howitzers after field trials in the Rajasthan desert later this month, an Indian Defence Ministry official said. The candidates are the Swedish SWS Defense AB FH77B05 L52, the Israeli Soltam TIG 2002 and the South African Denel G5/2000 gun. All three failed to meet Indias accuracy specifications in last years trials; all three improved their guns to compete again this year, said an Indian Army official from the artillery directorate