Rafale proposal 'effectively dead' as Dassault bid not cheapest

[CONNAN]

Even as three Rafale fighters line up in Bengaluru for eye-popping aerobatics displays at the Aero India 2015 exhibition this week, senior ministry of defence (MoD) sources say the proposal to buy the French fighter is "effectively dead".

The reason: During three years of negotiations between Dassault and MoD officials in the so-called "contract negotiation committee" (CNC), it has emerged that Dassault's bid was actually higher than that of the Eurofighter Typhoon, not lower as the MoD had announced on January 31, 2012.

Dassault had submitted a sketchy commercial bid, and when the CNC obtained details from the French company to arrive at the actual cost of the Rafale, the figures added up to significantly more than had originally been estimated.

The confusion is due partly to MoD inexperience with "life cycle costing" (LCC). The global tender for 126 medium multi-role combat aircraft (MMRCA) was the first time the MoD was awarding a contract based on LCC. This meant the winner would not be the fighter with the cheapest purchase price; instead the chosen fighter would be the one that was cheaper to buy, fly, maintain and overhaul over its 30-40 year service life.

"An inexperienced MoD, working off incomplete and sketchy details provided by Dassault, had incorrectly adjudged the Rafale cheaper. Now, after three years of obtaining clear figures from the French, we find India would be paying significantly more than had been initially calculated," says an official in the CNC.

Contacted for comments, the MoD has not responded.

The MoD has been backing away from the Rafale for two months now. On December 30, 2014, Defence Minister Manohar Parrikar admitted for the first time there were "complications" in the negotiations with Dassault, and outlined the IAF's alternatives.

"The Sukhoi-30MKI is an adequate aircraft for meeting the air force's needs", said Parrikar.

Last week the prime minister was pointedly distanced from the Rafale. On Saturday, an unusual MoD press release denied a newspaper report that the PM would fly in the Rafale during the Aero India 2015 air show at Bangalore this week.

"It is clarified that there is no plan for the Prime Minister Shri Narendra Modi to fly in any fighter jet. The news item is incorrect, misconceived and is not based on facts", stated the MoD.

This is the second time the MoD has gone wrong in LCC evaluations. As Business Standard reported on Saturday ("Defence ministry official questions whether Pilatus was cheapest trainer", February 14) an internal MoD noting last month sharply questioned the award of a contract for 75 PC-7 Mark II basic trainer aircraft to Swiss company, Pilatus. There too, the LCC was calculated incorrectly.

Significantly, that noting, signed by AR Sule, the MoD's "Finance Manager (Air)", who handles financial aspects of military aircraft purchases, alerts the defence minister to issues with LCC evaluation in the MMRCA tender.

Sule writes: "The issue (with LCC calculations) may be brought to the notice of the RM (Raksha Mantri) as two high value cases of IAF based on LCC model are at CFA (competent financial authority) approval stage."

Dassault's impending loss, however, will not be the Eurofighter Typhoon's gain. Eurofighter GmbH has maintained an expensive presence in Delhi for the last three years, just in case Dassault's bid encounters trouble. But Parrikar has made it clear that procurement procedures do not permit the second-placed vendor, i.e. Eurofighter GmbH, to be awarded the contract in place of the "preferred vendor", i.e. Dassault.

Dassault was adjudged winner of the MMRCA tender through a two-stage process. In the first stage the IAF ruled out on April 27, 2011 four of the six competing fighters. Boeing's F/A-18E/F Super Hornet; Lockheed Martin's F-16IN Super Viper; Saab's Gripen NG, and the Russian MiG-35 were adjudged not to have met the IAF's performance requirements.

In the second stage, the commercial bids of the remaining two vendors -Dassault's Rafale, and the Eurofighter Typhoon - were compared on a "life cycle basis" to select the lower bidder. On January 31, 2012, the Rafale was chosen as the cheaper of the two options, a decision that the MoD is now walking away from.

A senior official familiar with the Rafale contract negotiations says, "Given the value of this contract, it was always going to be scrutinised in detail. No MoD official is willing to endorse a Rs 100,000 crore contract with Dassault when it seems as if Rafale is not even the cheapest option".

This means the IAF would have to look elsewhere for fighters to increase its depleted squadrons from the current 35 to the authorised 45 (with 18 fighters in each squadron).

Besides enlarging its Sukhoi-30MKI fleet from the 272 fighters HAL will build by 2018, the IAF could order more indigenous Tejas Mark I fighters, over and above the 40 now on order from HAL. The IAF could also intensify its co-development of the Indo-Russian Fifth Generation Fighter Aircraft (FGFA) with Sukhoi.

For Dassault, an Indian cancellation would be a serious blow. The French air force and navy, dogged by budget cutbacks, have reduced their planned Rafale numbers from 310 to just 180. On Friday, Egypt announced it would buy 24 Rafale fighters, becoming the first and only overseas buyer for Dassault.

"India will take longer than Egypt," said Eric Trappier, the chief executive officer of Dassault on Friday.

Rafale proposal 'effectively dead' as Dassault bid not cheapest | Business Standard News

 

[skysthelimit]

Even as three Rafale fighters line up in Bengaluru for eye-popping aerobatics displays at the Aero India 2015 exhibition this week, senior ministry of defence (MoD) sources say the proposal to buy the French fighter is "effectively dead".

The reason: During three years of negotiations between Dassault and MoD officials in the so-called "contract negotiation committee" (CNC), it has emerged that Dassault's bid was actually higher than that of the Eurofighter Typhoon, not lower as the MoD had announced on January 31, 2012.

Dassault had submitted a sketchy commercial bid, and when the CNC obtained details from the French company to arrive at the actual cost of the Rafale, the figures added up to significantly more than had originally been estimated.

The confusion is due partly to MoD inexperience with "life cycle costing" (LCC). The global tender for 126 medium multi-role combat aircraft (MMRCA) was the first time the MoD was awarding a contract based on LCC. This meant the winner would not be the fighter with the cheapest purchase price; instead the chosen fighter would be the one that was cheaper to buy, fly, maintain and overhaul over its 30-40 year service life.

"An inexperienced MoD, working off incomplete and sketchy details provided by Dassault, had incorrectly adjudged the Rafale cheaper. Now, after three years of obtaining clear figures from the French, we find India would be paying significantly more than had been initially calculated," says an official in the CNC.

Contacted for comments, the MoD has not responded.

The MoD has been backing away from the Rafale for two months now. On December 30, 2014, Defence Minister Manohar Parrikar admitted for the first time there were "complications" in the negotiations with Dassault, and outlined the IAF's alternatives.

"The Sukhoi-30MKI is an adequate aircraft for meeting the air force's needs", said Parrikar.

Last week the prime minister was pointedly distanced from the Rafale. On Saturday, an unusual MoD press release denied a newspaper report that the PM would fly in the Rafale during the Aero India 2015 air show at Bangalore this week.

"It is clarified that there is no plan for the Prime Minister Shri Narendra Modi to fly in any fighter jet. The news item is incorrect, misconceived and is not based on facts", stated the MoD.

This is the second time the MoD has gone wrong in LCC evaluations. As Business Standard reported on Saturday ("Defence ministry official questions whether Pilatus was cheapest trainer", February 14) an internal MoD noting last month sharply questioned the award of a contract for 75 PC-7 Mark II basic trainer aircraft to Swiss company, Pilatus. There too, the LCC was calculated incorrectly.

Significantly, that noting, signed by AR Sule, the MoD's "Finance Manager (Air)", who handles financial aspects of military aircraft purchases, alerts the defence minister to issues with LCC evaluation in the MMRCA tender.

Sule writes: "The issue (with LCC calculations) may be brought to the notice of the RM (Raksha Mantri) as two high value cases of IAF based on LCC model are at CFA (competent financial authority) approval stage."

Dassault's impending loss, however, will not be the Eurofighter Typhoon's gain. Eurofighter GmbH has maintained an expensive presence in Delhi for the last three years, just in case Dassault's bid encounters trouble. But Parrikar has made it clear that procurement procedures do not permit the second-placed vendor, i.e. Eurofighter GmbH, to be awarded the contract in place of the "preferred vendor", i.e. Dassault.

Dassault was adjudged winner of the MMRCA tender through a two-stage process. In the first stage the IAF ruled out on April 27, 2011 four of the six competing fighters. Boeing's F/A-18E/F Super Hornet; Lockheed Martin's F-16IN Super Viper; Saab's Gripen NG, and the Russian MiG-35 were adjudged not to have met the IAF's performance requirements.

In the second stage, the commercial bids of the remaining two vendors -Dassault's Rafale, and the Eurofighter Typhoon - were compared on a "life cycle basis" to select the lower bidder. On January 31, 2012, the Rafale was chosen as the cheaper of the two options, a decision that the MoD is now walking away from.

A senior official familiar with the Rafale contract negotiations says, "Given the value of this contract, it was always going to be scrutinised in detail. No MoD official is willing to endorse a Rs 100,000 crore contract with Dassault when it seems as if Rafale is not even the cheapest option".

This means the IAF would have to look elsewhere for fighters to increase its depleted squadrons from the current 35 to the authorised 45 (with 18 fighters in each squadron).

Besides enlarging its Sukhoi-30MKI fleet from the 272 fighters HAL will build by 2018, the IAF could order more indigenous Tejas Mark I fighters, over and above the 40 now on order from HAL. The IAF could also intensify its co-development of the Indo-Russian Fifth Generation Fighter Aircraft (FGFA) with Sukhoi.

For Dassault, an Indian cancellation would be a serious blow. The French air force and navy, dogged by budget cutbacks, have reduced their planned Rafale numbers from 310 to just 180. On Friday, Egypt announced it would buy 24 Rafale fighters, becoming the first and only overseas buyer for Dassault.

"India will take longer than Egypt," said Eric Trappier, the chief executive officer of Dassault on Friday.

Rafale proposal 'effectively dead' as Dassault bid not cheapest | Business Standard News

Despite what Parrikar says, does that not mean Eurofighter is the cheapest and L1 vendor now? So what's the problem in going ahead with them? Of course that means another 3 years of negotiations

@sancho
@Abingdonboy
Comments??

 

[C130]

should of went with the Super Hornet. India would probably by now have 40 birds and pilots trained for the SH, now who knows if the Rafale deal will fall through, and if it does who knows how long it will take to sign a contract for the Typhoon.

 

[vsdave2302]

Even as three Rafale fighters line up in Bengaluru for eye-popping aerobatics displays at the Aero India 2015 exhibition this week, senior ministry of defence (MoD) sources say the proposal to buy the French fighter is "effectively dead".

The reason: During three years of negotiations between Dassault and MoD officials in the so-called "contract negotiation committee" (CNC), it has emerged that Dassault's bid was actually higher than that of the Eurofighter Typhoon, not lower as the MoD had announced on January 31, 2012.

Dassault had submitted a sketchy commercial bid, and when the CNC obtained details from the French company to arrive at the actual cost of the Rafale, the figures added up to significantly more than had originally been estimated.

The confusion is due partly to MoD inexperience with "life cycle costing" (LCC). The global tender for 126 medium multi-role combat aircraft (MMRCA) was the first time the MoD was awarding a contract based on LCC. This meant the winner would not be the fighter with the cheapest purchase price; instead the chosen fighter would be the one that was cheaper to buy, fly, maintain and overhaul over its 30-40 year service life.

"An inexperienced MoD, working off incomplete and sketchy details provided by Dassault, had incorrectly adjudged the Rafale cheaper. Now, after three years of obtaining clear figures from the French, we find India would be paying significantly more than had been initially calculated," says an official in the CNC.

Contacted for comments, the MoD has not responded.

The MoD has been backing away from the Rafale for two months now. On December 30, 2014, Defence Minister Manohar Parrikar admitted for the first time there were "complications" in the negotiations with Dassault, and outlined the IAF's alternatives.

"The Sukhoi-30MKI is an adequate aircraft for meeting the air force's needs", said Parrikar.

Last week the prime minister was pointedly distanced from the Rafale. On Saturday, an unusual MoD press release denied a newspaper report that the PM would fly in the Rafale during the Aero India 2015 air show at Bangalore this week.

"It is clarified that there is no plan for the Prime Minister Shri Narendra Modi to fly in any fighter jet. The news item is incorrect, misconceived and is not based on facts", stated the MoD.

This is the second time the MoD has gone wrong in LCC evaluations. As Business Standard reported on Saturday ("Defence ministry official questions whether Pilatus was cheapest trainer", February 14) an internal MoD noting last month sharply questioned the award of a contract for 75 PC-7 Mark II basic trainer aircraft to Swiss company, Pilatus. There too, the LCC was calculated incorrectly.

Significantly, that noting, signed by AR Sule, the MoD's "Finance Manager (Air)", who handles financial aspects of military aircraft purchases, alerts the defence minister to issues with LCC evaluation in the MMRCA tender.

Sule writes: "The issue (with LCC calculations) may be brought to the notice of the RM (Raksha Mantri) as two high value cases of IAF based on LCC model are at CFA (competent financial authority) approval stage."

Dassault's impending loss, however, will not be the Eurofighter Typhoon's gain. Eurofighter GmbH has maintained an expensive presence in Delhi for the last three years, just in case Dassault's bid encounters trouble. But Parrikar has made it clear that procurement procedures do not permit the second-placed vendor, i.e. Eurofighter GmbH, to be awarded the contract in place of the "preferred vendor", i.e. Dassault.

Dassault was adjudged winner of the MMRCA tender through a two-stage process. In the first stage the IAF ruled out on April 27, 2011 four of the six competing fighters. Boeing's F/A-18E/F Super Hornet; Lockheed Martin's F-16IN Super Viper; Saab's Gripen NG, and the Russian MiG-35 were adjudged not to have met the IAF's performance requirements.

In the second stage, the commercial bids of the remaining two vendors -Dassault's Rafale, and the Eurofighter Typhoon - were compared on a "life cycle basis" to select the lower bidder. On January 31, 2012, the Rafale was chosen as the cheaper of the two options, a decision that the MoD is now walking away from.

A senior official familiar with the Rafale contract negotiations says, "Given the value of this contract, it was always going to be scrutinised in detail. No MoD official is willing to endorse a Rs 100,000 crore contract with Dassault when it seems as if Rafale is not even the cheapest option".

This means the IAF would have to look elsewhere for fighters to increase its depleted squadrons from the current 35 to the authorised 45 (with 18 fighters in each squadron).

Besides enlarging its Sukhoi-30MKI fleet from the 272 fighters HAL will build by 2018, the IAF could order more indigenous Tejas Mark I fighters, over and above the 40 now on order from HAL. The IAF could also intensify its co-development of the Indo-Russian Fifth Generation Fighter Aircraft (FGFA) with Sukhoi.

For Dassault, an Indian cancellation would be a serious blow. The French air force and navy, dogged by budget cutbacks, have reduced their planned Rafale numbers from 310 to just 180. On Friday, Egypt announced it would buy 24 Rafale fighters, becoming the first and only overseas buyer for Dassault.

"India will take longer than Egypt," said Eric Trappier, the chief executive officer of Dassault on Friday.

Rafale proposal 'effectively dead' as Dassault bid not cheapest | Business Standard News

Good,

Scarp it.

Build Some Su37 and AMCA.

 

[rockstar08]

lol Pakistan will get a instant heart attack if Indians buy , Rafale , Typhoon or F-18 super Hornets ...

 

[PoKeMon]

lol Pakistan will get a instant heart attack if Indians buy , Rafale , Typhoon or F-18 super Hornets ...

No you wont, you survived the last day match defeat as well.

 

[DrawingDead]

should of went with the Super Hornet. India would probably by now have 40 birds and pilots trained for the SH, now who knows if the Rafale deal will fall through, and if it does how long it will take to sign a contract for the Typhoon.

It's still not too late. It's probably India's best choice. Mature platform, got a working AESA radar, it's battle tested and we can deliver on time. Its not like you're gonna learn anything new from building more Flankers. Come on, try some of the good stuff for once

 

[SrNair]

should of went with the Super Hornet. India would probably by now have 40 birds and pilots trained for the SH, now who knows if the Rafale deal will fall through, and if it does how long it will take to sign a contract for the Typhoon.

I dont think so.If there is any problem with Rafale deal.They will induct advanced versions of Su 30MKI.

 

[Indian_Patriot]

Simple really...speed up production of LCA MK1 and 2 variants, do not go for 2 seater Pak-fa which will delay development, just get the single seater with Indian specs and order more MKI! Jesus not that hard folks.

 

[SrNair]

It seems plan B is also in there .A possible additional purchasing of more MKI s and LCA.

@sancho

 

[N/A]

India needs to start building "QUALITY" weapons by themselves or co-produce, instead of solely relying on importing weapons

 

[帅的一匹]

it's wasting time and those Mod officer can't calculate the real LCC should be fired. a bunch of amateur.

 

[Tshering22]

It's still not too late. It's probably India's best choice. Mature platform, got a working AESA radar, it's battle tested and we can deliver on time. Its not like you're gonna learn anything new from building more Flankers. Come on, try some of the good stuff for once

France is not complying with the contractual agreements, which is the first condition to proceed anywhere. Secondly, a Rafale is costing more per unit than what an FGFA is estimated to cost per flight hour. This is despite being half a generation behind.

We have an immediate need for 126 jets with 74 options. Buying that kind of numbers in a go is a big investment. While Egypt has come forth as a saving grace for Dassault, it still doesn't change anything for us. $150 million apiece is just too expensive.

It seems plan B is also in there .A possible additional purchasing of more MKI s and LCA.

@sancho

I have a feeling that we are going to get more Mk.2s on order with AESA upgrade of MKIs which is still coming out to be cheaper than Rafales on per unit terms.

 

[Thorough Pro]

Looks like mother of all deals just aborted, or was that "pregnancy" just a persistent constipated lump of shit? the reality behind all shit talk is that indian purse is empty so empty that they even have to change the way how GDP is calculated to fool the world, on the other hand it also serves the Frenchies right for back tracking from avionics deal with Pakistan

 

[CONNAN]

If the terms of the deal have changed, ie. agreed price no longer being valid, then only one thing to do: Cancel the order on grounds of unjustified price escalation. $20 billion is better spent on mass producing home-made fighters. Produce more Su-30MKI and Su-HAL FGFA. I think IAF can make do without medium fighters. HAL Tejas can be upgraded to medium status, as is already happening under the MCA program. No need to over diversify fleet. It is obvious that the cost of the aircraft has shot up with the time but it is not justifiable and the question i really wanna ask is when the Dassault had quoted the price of Rafale 65 million$ ( correct me if i was wrong) what was there to negotiate, all I'm trying to tell is did India really need 2 long years to negotiate or were the authorities expecting some kick backs here also.