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Compliance
Defence

Report No. 12 of 2010 - Compliance Audit on Army and Ordnance and Factories, Union Government, Defence Services

Date on which Report Tabled:
Fri 06 Aug, 2010
Date of sending the report to Government
Government Type
Union
Union Department
Defence
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Sector Defence and National Security

Overview

The SMERCH Multi Barrel Rocket Launcher System procured from a foreign firm at a cost of Rs 2633 crore could not be fully operationalised for one to three years due to defects in various sub systems, delay in buying the logistics equipments and non-formulation of War Establishment of the concerned units.The Ministry procured outdated missiles of 1970s vintage valuing Rs 587.02 crore in 2008 from BDL by compromising the Army's requirement. The Missiles were not only unable to achieve desired range but also did not meet the Army's objective of acquiring third generation missiles.

The ammunition 'A' was designed to be fired from T-72 tanks. Indigenous as well as imported version of the ammunition 'A' valuing Rs 273.75 crore reported defective could not be got repaired for over five to eight years.Although the imported ammunition was still under warranty yet the Army HQ did not make efforts to get them rectified or replaced by the supplier.Ministry made excess procurement of batteries and battery chargers costing Rs 5.30 crore due to incorrect assessment of requirement by Army. Timely intervention by Audit not only led to a saving of Rs 5.30 crore but also checked the recurrence of such excess procurement.

Despite being aware that the oxygen masks offered by foreign vendor had defects, the Ministry contracted for supply of the oxygen masks to Army. This resulted in receipt of defective masks which have been returned by Army aviation units due to difficulties faced by the Pilots in inhaling oxygen. The intended benefit of the expenditure of Rs 5.06 crore on its procurement was therefore not achieved even after more than two years of receipt of the masks.Inadequate management of inventory of the Unmanned Aerial Vehicles (UAV) by Army HQ resulted in conclusion of maintenance contract for nonexistent UAVs. A payment of Rs 98.59 lakh was made to the contractor for services not rendered. When detected by Audit, Army HQ took up the matter with the contractor and the latter promptly agreed to refund the amount. The recovery of the overpaid amount was however awaited as of November 2009.

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