AFAIK the terms of the deal were all spelled out in the RFP. Dassault knew the risks when it decided to participate and probably quantified them as an insurance markup on its bid. But to try and renegotiate the terms after being selected for exclusive negotiations will obviously be unacceptable to the Indian MoD.

= insoluble impasse?

Those contracts: it looks like defense-aerospace included costs that should not be included while JPO excluded costs that should not be excluded. It seems to me that the cost of F-35 lies somewhere between the two. What does seem clear to me is that the F-35 price as headlined by JPO (basically flyaway price) cannot be compared to contracts for other fighters where the price includes far more than just the fighters themselves.

And somehow there are posters who would like to believe that Dassault somehow cannot be held accountable at all for delays in delivering Indian made Rafales- they are the OEM, they are the integrators for the various suppliers that work on the Rafale. How can HAL be the sole entity responsible for dealing with all these myriad suppliers that will need to transfer technology and ensure that it is done on time and on schedule? Dassault obviously has to be responsible for these.

Was there ever any suggestion that HAL would be responsible for doing the OEM’s job? Dassault has to be responsible for that and I am sure that will be in the contract.

Dassault AFAIK, isn’t being asked for a blank unlimited liability clause where they will be the only ones responsible for timely delivery and quality of HAL assembled and built Rafales – what is being asked is for it to ensure that ToT happens on time, since we have seen in multiple deals earlier, that the OEMs go slow on ToT once the contract is signed and then the GoI and MoD have nothing to do except keep sending rejoiners.

It is the OEM’s job to be in a position for timely transfer of TOT. Dassault has to be responsible for that and I am sure that will be in the contract.

If an OEM does ensure that it is in a position for timely transfer of TOT but the recipient of that TOT is incompetent in doing its bit (buildings fail to be built within schedule, machines cannot be installed within schedule, competent personnel are not available because of delays in training, the recipient of the TOT creates delays through sluggish decision making etc) then the OEM is not responsible for the problems created.

This is just a way in which to make sure Dassault has its skin in the timely delivery of Indian-made Rafales as well. I don’t see anything wrong in that expectation from the GoI. Otherwise, what incentive does Dassault have to ensure that HAL gets all the help it needs to deliver on time and with the expected level of quality??

GOI is not paying the entire cost of the contract to the OEM up front. If the OEM does not perform according to the contract, payments can be witheld.

Already we’re seeing how Pilatus has shoved the responsibility of dealing with all its suppliers who supply various LRUs, for the PC-7 MkII’s maintenance contracts onto HAL, claiming that they merely integrate the LRUs and separate contracts would be required with all of those suppliers, which isn’t Pilatus’ responsibility. This after millions of Swiss francs were paid specifically for the maintenance contract with HAL. Now this hidden cost has emerged, which the MoD is not pleased about.

If what you describe is the case, it looks like Pilatus is attempting to change the contract unilaterally.

Hi Sainul or Abid (I don’t know which is your family name). I also think you should put this in the F-35 news/discussion thread.

French defence minister heads to Delhi with MMRCA on the agenda

From the source given:

Official sources said the Ministry of Defence (MoD) had completed negotiations with Dassault on a large part of the draft contract, which reportedly runs to about 15,000 pages.

ie contract cannot be signed at the moment – you don’t sign a draft contract until it is completed.

Saw an article about this procurement for the Indian army:

India has marked over $4 billion worth of artillery projects to purchase several hundred new 155mm howitzers. They are intended to supplement India’s dwindling artillery stocks, while out-ranging and out-shooting Pakistan’s self-propelled M109 155mm guns. It seemed simple enough, and in the main towed artillery competition, BAE Systems Bofors had been competing against systems from Israel’s Soltam and Denel of South Africa.

Unfortunately, India’s 2 towed howitzer competitions, and its 2 self-propelled artillery procurements, have mostly served as cautionary tales. If the stakes weren’t so high, they’d qualify as farce. The simple process of buying off-the-shelf artillery guns has become a decades-long affair filled with legal drama, accusations of corruption, and multiple re-starts – but not one new gun. Competitions are declared, and canceled, again and again. One is on its 5th iteration. Another is on its 3rd. Meanwhile, India’s stock of operational 155mm FH77 howitzers has dwindled to around 200, and their last successful artillery buy was over 2 decades ago. Is there an end in sight to any of these competitions? Or a potential winner?

http://www.defenseindustrydaily.com/murky-competition-for-2b-india-howitzer-order-may-end-soon-0805/

I hope none of the people involved in the farcical fiasco above are in any way involved in the MMRCA procurement!

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Vnomad, you are correct that a full squadron can be potentially operational by 2018 but I understood it was not planned to fly any planes off QE until 2020….unless this plan is accelerated or the USMC invited to use the QE to forestall any embarrassment of an empty ship

An empty ship is not just an embarassment. Apart from leaving a capability gap, it’s very expensive building an asset whose use is delayed for several years because it is not equipped. It’s a bit like building a massive factory then not using it for years because the equipment you need to put in it is either not available at an economic price or not available at all.

And IIRC recent figures put the Rafale cost over 85 million, or around 70 million minus VAT. That’s still about quarter or so less than the F-35A…

Yes, forget sales tax/VAT. It is entirely irrelevant. Either it is not payable because the goods are exported or it is paid by the government (ministry of defence) to the self same government.

Are you comparing like to like though (a) Rafale and F-35 without engines but with extra concurrency costs or (b) Rafale and F-35 with engines and no extra concurrency costs?

Extrapolating from the Swiss contract, for $6 billion you’d be able to get no more than 50 Gripen Es (if not much less). If the Rafale was in the same cost bracket as the Gripen E, it would probably have been the primarily competitor for the F-35A in European markets instead of the Gripen. Brazil would have been a lock as well, considering the ready availability of a carrier variant.

I think you have to separate out associated costs when extrapolating. A package deal including 50 F-35’s would not cost 50/22 the cost of a package deal including 22 F-35’s. Likewise a package deal including 50 Gripens would not cost 50/22 the cost of a package deal including 22 Gripens.