Army Ordnance Corp Is Criticised By CAG For A Delay In Placing Orders

The Comptroller and Auditor General (CAG) has criticised the Army Ordnance Corps for instances of procurement order delays, in some cases lasting up to 301 weeks, and unauthorised expenditures.

It claimed that a “inherent” issue hurting the Army’s operational readiness was the delays in placing orders and the materialisation of supplies in the case of key equipment.

“In contrast to the Defense Procurement Manual’s 23-week deadline, delays of 13 to 301 weeks were observed in some supply orders. The tendering procedure’ completion within the bid validity period and securing acceptance of necessity were the two primary areas where there were delays “CAG stated.

According to a press release, “supply orders/indents valued at more than Rs 700 crore were outstanding beyond the delivery period and awaiting completion for the last one to 19 years” in relation to supply orders/indents placed on ordnance factories, defence public sector undertakings, and other vendors.

On Monday, the report was presented to the Lok Sabha. In both times of peace and conflict, the Army Ordnance Corp (AOC) is in charge of supporting the Indian Army with supplies and logistics.

Provisioning, reception, storage, preservation, accounting, stocktaking, and issue of ordnance supplies are the main tasks involved in AOC’s inventory management. The CAG also identified instances of “extra spending” brought on by failure to accept the tender within the allotted time frame and higher-than-required procurement costs.

In one instance, the CAG stated, “Failure to accept the tender within the validity period resulted in retendering and subsequent placement of supply orders at an additional expenditure of Rs 6.75 crore.” “There have been occasions where rates in central procurements at central depots have been higher than their local buying rates made over the last one to six months,” the statement read.

According to the CAG, procurement agencies failed to take use of the repeat order/option clause and instead placed new supply orders at prices that were higher than the earlier ones, incurring an additional cost of Rs 3.89 crore.