In its report on the Rafale multi-role fighter deal between India and France, the Comptroller and Auditor General (CAG) has also narrated the events surrounding allegations that Agusta middleman Christian Michel had made to intercede on behalf of the Eurofighter Typhoon at a late stage in the tendering process.
Under the section 'Audit Findings - Selection of Rafale for procurement through IGA', the CAG report says the following, calling the Eurofighter bid 'unsolicited':
"Negotiations with Dassault Aviation had reached a deadlock when the CNC realised that if the Indian man hours were applied to the cost of producton quoted by Dassault Aviation, the price of the aircraft would be substantially higher. Also, the issue of warranty for the aircrafdt produced by HAL was also not settled. In July 2014, EADS (Eurofighter) gave an unsolicited offer of 20% discount on the previous firm-fixed 2007 offer on behalf of the Eurofighter Typhoon Consortium.
As per the letter, this offer was in view of further maturity in the Eurofighter typhoon program which had generated synergies. In this offer, EADS also offered to enhance the ToT process through a comprehensive training and support programme to be combined with creation of an Eurofighter Typhoon Industrial Park in India. Ministry did not accept this offer stating that it was an unsolicited offer. Further, with the procurement of only 36 aircraft through an IGA, audit also could not find any proposal with Ministry for filling of this wide gap in the operational preparedness of the IAF
Ministry in response stated that EADS' unsolicited offer of 20% discount had factual inaccuracies. The Ministry further stated that the 36 Rafale IGA procurement had been undertaken with the L1 bidder of the MMRCA case in consonance with the procurement process iterated in the DPP. It is seen that while there are no provisions of concluding an IGA with L-1 bidder in the DPP, however for INT and for Audit that reference point was necessary to determine better price, better delivery, etc. as stipulated in the Joint Statement."
A few months earlier, shortly after Christian Michel had been extradited from Dubai and during the time that the Rafale debate was raging in Parliament, the BJP had questioned Rahul Gandhi over the sensational revelations regarding Michel's alleged lobbying in the MMRCA acquisition process during the time of the UPA.
After Law Minister Ravi Shankar Prasad first raised the point, attacking by saying "It is too well known that Congress party is never happy unless there is a 'deal' in a defence deal", Raksha Mantri Nirmala Sitharaman narrated what had gone on then, during an exclusive interview with Republic TV's Editor-in-Chief Arnab Goswami:
"Ten days after the UPA opened the deal and it was decided that Rafale was the L1, Eurofighter approaches them with a discounted prices. A discounted bid can never be accommodated, it is against the law.
Having discovered L1, is it legitimate for L2 to come and say 'you know price of L1, now let me give you a lower price'?. It's not. It would vitiate the tender process."