The report contains the results of the Performance Audit on ‘Construction and Estate Management in DRDO’ and related financial transactions of the Ministry of Defence (DRDO).
Report No 15 of 2021 of the Comptroller and Auditor General of India on Defence Research & Development Organisation was presented in Parliament yesterday. The report contains the results of the Performance Audit on ‘Construction and Estate Management in DRDO’ and related financial transactions of the Ministry of Defence (DRDO). Key audit findings are as follows:
Utilisation of scientists for construction activities
The core activity of DRDO is research & development of technologies required for the Armed Forces. DRDO had a deficiency of 180 scientists in the Defence Research and Development Scientists (DRDS) cadre. Audit, however, noted that 38 scientists were posted to the construction works establishment without the approval of MoD.
Estimated cost of work
The estimated cost of work being tendered for was indicated in the Request for Proposal (RFP) and was, therefore, not amenable to the discovery of true market prices, as the bidder is influenced by the estimated costs. The inflated estimated cost allows the contractor to inflate the quotes. Thus, RFP should mention only the specifications and avoid divulging the estimated cost.
The audit further noted issues relating to undue benefits allowed to the contractors by way of payment of interest-free mobilisation advance, execution of high-rate items and non-execution of low-rate items under contracts.
Delays in completion of works
The purpose of having a dedicated R&D Construction Establishment (RDCE) for planning and execution of time-bound DRDO works was not fully met as 58 per cent of works for the period 2014-19 could not be completed within the original schedule. Further, the percentage of works completed within the original schedule declined from 47.09 per cent in 2016-17 to 36.53 per cent in 2018-19.
Non-levy of departmental charges on deposit works
Deposit works from other organisations of the Government of India/private sector were taken up despite delays in completing DRDO’s own work. Further, DRDO did not levy departmental charges amounting to ₹204.92 crores on such deposit works.
Expenditure before sanction/utilisation of a tolerance limit to sanctions/savings under contracts
Permissible tolerance limit of 10 per cent beyond Administrative Approval (A/A) amount is not utilised either to enhance work or enrich specification afterwards. The audit noted that works valuing ₹29.92 crores were executed in advance of sanctions. Further, DRDO utilised savings worth ₹87.61 crores on additional works which were not covered in the sanctions and ₹93.62 crores of savings in seven contracts for carrying out additional works.
Unwarranted construction of guesthouses (GHs)
DRDO did not have standards for assessing the requirement of guest houses akin to the Scales of Accommodation for Defence Services wherein the construction of officers’ mess (which is like a guest house) is based on the authorised strength of officers at a particular station/unit. Audit observed that occupancy in 53 (41.40 per cent) out of 128 GHs under the jurisdiction of DRDO) was less than 20 per cent during the period from 2014 to 15 to 2018-19. The audit also noted that two additional GHs were constructed at a station that already had three GHs having yearly occupancy between 11 to 42 per cent only.
Payment through manipulation of attendance records
The audit noted that certain persons having the same EPF number were simultaneously present at more than one location under more than one contract in paid bills. The audit also noted issues like deployment of manpower without proof of qualification, deployment of excess manpower and contracts for an excess quantity of arboriculture assets.
Loss due to non-encashment of Security Deposit
DRDO extended the delivery period of equipment supply from the original equipment manufacturer (OEM) but failed to ensure the extension of validity of the security deposit for the commensurate period. Consequent to the OEM’s expression of the inability to complete the unfinished work due to financial constraints, DRDO could not save ₹ 1.25 crore with interest thereon apart from the additional expenditure incurred to complete the unfinished work OEM.