The report says, "The nature of the defects observed in the accidents indicated mainly the quality problems of various components, malfunctioning of ammunition and weapon damages." (Representative) An audit report tabled by the Comptroller and Auditor General (CAG) of India on ordnance factories and Defence Public Sector Undertakings (DPSUs) has said that in the assessment period of 2014-15 and 2018-19, as many as 584 accidents of 11 ordnance items were reported due to quality issues and malfunctioning of ammunitions.
Audit Report No 25 of 2021 of the CAG for the year ended March 2019 on ordnance factories and DPSUs was presented in Parliament Wednesday. The report contains an analysis of the performance of the Ordnance Factory Board (OFB) for the year 2018-19, an audit of the performance of the Materials and Components (M&C) Group of Ordnance Factories, and an audit of the functioning of Ordnance Equipment Group (OEG) along with an audit of issues relating to DPSUs.
It needs to be noted that in October 2021 the Ministry of Defence (MoD) formed seven new DPSUs, which have taken over the operations of the 41 factories under the erstwhile Ordnance Factory Board (OFB).
In the paragraph on quality conformance of the M&C items, the CAG report says, “584 accidents involving 10 ammunition items and one tank item during 2014-15 to 2018-19 were reported from the users’ end. The nature of the defects observed in the accidents indicated mainly the quality problems of various components, malfunctioning of ammunition and weapon damages. Substantial time taken in defect investigation of accidents delayed remedial measures to overcome the quality deficiencies.”
In the context of ordnance factories, users mainly refer to the armed forces.
The report also states, “Ordnance Factories have a system of multi-tiered quality checks by Quality Control (QC) section and Quality Assurance (QA) establishment attached with each factory. Recurrent return for rectification or rejections of M&C items at the QA stage and their reasons indicate inadequate and ineffective quality control checks by the factories and control and surveillance checks by the QA agencies (SQAEs) during the manufacturing process. Quality deficiencies in the M&C items, as well as lapses in QC checks in the end product factories, led to the rejection of 11 end products valuing Rs 175 crore at the QA stage.”
On the issue of production performance, the report states, “Significant shortfalls of 10 per cent and above in issues were observed for 15 M&C items and for 16 end products. As a result, Army’s orders remained outstanding for 11 ammunition items and for three tank items as of March 31, 2019. OFB’s slippages in the issue of end products was one of the key factors leading to critical deficiency of eight ammunition items, ranging from 15 to 93 per cent, in the Army’s stock.”
“Among all the functional Groups of the OFB, the M&C Group had the highest overheads — 35 to 51 per cent of cost of production — and showed an increasing trend during 2014-19. Main contributing elements for high overheads were supervision charges (37 to 42 per cent) and indirect labour charges (15 to 20 per cent of overheads) in M&C group. The reason was the holding of more supervisory staff and indirect Industrial Employees (IEs) as compared to direct IEs. Despite a higher number of supervisory staff there was slippage in production and issue of M&C items as well as quality deficiencies,” it adds.
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