Bugbears in MoD Guidelines on Handling of Complaints

The Ministry of Defence (MoD) has recently issued guidelines laying down ‘a well defined procedure for complaints handling in a time bound manner’.1 According to these guidelines, any information about malpractice, misconduct or corruption on the part of any entity involved in the acquisition process will be considered as a complaint, and so will be any reference received from a vendor alleging injustice or impropriety in application of the provisions of the Defence Procurement Procedure (DPP). A distinction is made between complaints by the public and those made by the competing vendors. This pretty much covers the entire gamut of complaints normally received by the ministry.

In keeping with the instructions of the Central Vigilance Commission (CVC), anonymous complaints, as well as pseudonymous complaints found to be anonymous after preliminary inquiry, will just be filed and other complaints processed as per the procedure laid down in the guidelines.

In a bid to ensure transparency, the guidelines provide for the result of the inquiry into all valid complaints from the public, including the ‘public representatives’, and other VIPs, to be posted on the MoD website after ‘blacking out’ any confidential information. Understandably, complaints by competing vendors and the result of the inquiry into such complaints will not be posted on the website as this may lead to disclosure of commercial or classified information.

While any effort to streamline the procedure and make it transparent is welcome, a conceptual ambiguity or loose ends left untied can easily defeat the purpose. The guidelines on handling of complaints do not seem to be free from potentially crippling afflictions. Take, for example, the procedure for processing of complaints related to the procurement cases that fall under the financial powers delegated to the Services. Presently, the Vice Chiefs of Army and Navy, Deputy Chief of the Air Force, CISC at HQ IDS, and the DG Coast Guard have the financial power to sanction capital acquisition proposals up to INR 150 crore each.

The guidelines provide that these aforesaid Competent Financial Authorities (CFAs) will direct the directorate concerned at the Service Headquarters (SHQs) to inquire into and submit a factual report on the complaint; get the factual report, when submitted, examined; and, dispose of the complaint by taking appropriate action after obtaining the opinion of the ‘Ombudsmen’, wherever so required.

This raises quite a few questions. Which directorate is intended to be the directorate ‘concerned’? It cannot – and should not – be the directorate which initiates and steers a procurement proposal through the labyrinthine acquisition process as the issues raised by the complainant are quite likely to have some linkage with the actions of that directorate, even if this is not apparent when the complaint is received. Objectivity requires that a complaint be inquired into by an independent agency. This leads to the question as to from whom will the CFA get the factual report examined? What will give them the confidence that the action they decide to take on the report is ‘appropriate’? Under what circumstances will they be ‘required’ to obtain the opinion of the ‘Ombudsmen’?

Experience shows that officials are reluctant to take action which they consider to be most appropriate because of the apprehension of their action being attributed to some ulterior motive. It is likely that the CFAs would invariably refer each case to the Ombudsmen to be ‘on the safe side’.

The guidelines envisage consultation with the ‘Ombudsmen’. Assuming that it is not a typographical error and it is indeed intended that the CFAs obtain the opinion of more than one Ombudsman, what if there is a difference of opinion between the Ombudsmen on the action to be taken? It is difficult to imagine how it will be ensured that the Ombudsmen maintain uniformity in rendering their advice and the CFAs take similar action under similar circumstances.

It is also difficult to imagine how the CFAs would deal with situations which arise from lack of clarity as regards the government’s policy on several contentious issues. Imagine, for example, that there is an allegation that a sister concern of a vendor participating in a tender is involved in some transgression. The CFAs are likely to get stumped while handling such complaints as, in spite of specific recommendations by several committees appointed by it, MoD itself has not been able to firm up the policy on blacklisting of the entire group of companies in a situation where one of them is suspected to be involved in some transgression.

Probably with a view to ensuring that the complaints do not derail the procurement process, the guidelines provide that in all cases ‘the acquisition scheme shall be progressed independent of processing of the complaint’ and adds for good measure that the ‘procurement case will be processed for final approval unless CVC specifically asks for withholding CFA approval’. Does it imply that a complaint which might not have been received through the CVC will nonetheless have to be referred to it for a ruling on whether or not to withhold the CFA approval?

The guidelines lay down the timeframe for disposal of complaints which is laudable but experience shows how difficult it is to adhere to prescribed timeframes. These timeframes also assume that the preliminary inquiry into complaints can be completed and appropriate action taken without seeking the help of any outside agency, such as the Central Bureau of Investigation (CBI), in investigating the matter. This may not be possible in regard to complaints involving allegations of corruption as SHQs lack the wherewithal to inquire into such allegations.

Most of these observations are equally applicable to processing of complaints by MoD in respect of the acquisition cases beyond the powers delegated to the SHQs which are handled by its Acquisition Wing.

An important component of the guidelines is the institution of Ombudsman. The guidelines say that the procedure for their appointment shall be notified separately. The efficacy of the mechanism depends not only on the procedure for their appointment. There has to be absolute clarity about the role and functions of the Ombudsmen and the guidelines/standard operating procedure to be followed by them. Some arrangement will also have to be made to provide secretarial assistance required for discharging their responsibility. This vital component of the MoD guidelines is clearly something which, at best, is presently a work in progress.

It may be recalled that the Pre-contract Integrity Pact, which is a part of the procurement procedure, envisages a panel of Independent External Monitors (IEMs), duly approved by the CVC, carrying out independent review of contracts to see whether, and to what extent, both the parties comply with their obligations under the Pact. The IEMs have the right of access to all contract-related documents. The IEMs are also authorised to examine any complaint received by them and submit their report to the head of the organisation concerned and the CVC.

The question whether the IEM system has been effective in serving its purpose is moot. Although the institution of IEM seems to be conceptually different from the institution of the Ombudsman, the factors influencing their ability to examine complaints are the same. It would, therefore, be prudent to draw lessons from how the IEM mechanism has worked and make sure that the institution of the Ombudsman does not get hamstrung by the factors which might have constrained the IEMs.

A vendor, competing in a tender, is required to lodge complaint ‘within two weeks of receipt of related communication or information by him from the concerned authorities’. This may not always be possible as two weeks’ time provides too small a window for any prospective vendor to do their own homework before lodging the complaint. In any case, this stipulation seems unnecessary in view of the provision for penalising the vendor whose complaint is found to be vexatious.

These bugbears, which incidentally are not insurmountable, notwithstanding, it is good to have clear guidelines for handling of complaints. The provision in the MoD guidelines on dealing with vexatious complaints should surely discourage misplaced adventurism by potential self-righteous complainants. Greater transparency and willingness on MoD’s part to disclose suo moto, or provide when asked for legitimately, information concerning defence acquisitions, as long as such information is not classified, might satisfy a large number of potential complainants.

As for the vendors, quick response to their request for clarification or for a meeting with MoD officials to ventilate their grievances or explain their position on issues under the ministry’s consideration, would be enough to make it is easier for them to do business with MoD.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

• 1. These guidelines, issued as an annexure to MoD ID No. 1(6)/D(Acq)/13-Vol. II dated 21.09.2015, are available on MoD’s website, at http://mod.nic.in/writereaddata/Guidlines.pdf