Government Owned Contractor Operated model

Government Owned Contractor Operated model

News: The Army’s ambitious plan for modernization of the Army Base Workshops (ABWs) and implementation of the ‘Government-owned, contractor-operated (GOCO)’ model is delayed, the Comptroller and Auditor General (CAG) said in its report.

What is GOCO Model?
• The GOCO model was one of the recommendations of the Lt. Gen. DB Shekatkar (Retd.) committee to enhance combat capability and re-balancing defence expenditure.In GOCO model, the assets owned by the government will be operated by the private industries.Under the GOCO model, the private companies need not make investments on land, machinery and other support systems.
• The Army follows the traditional ‘womb to tomb’ life cycle support management for maintenance, repair and overhaul (MRO) of its costly equipment.
• Corps of Electronics and Mechanical Engineers (EME) is responsible for the MRO system.
• In the last three decades, there has been a quantum jump in military technology and the MRO of military equipment has become very complex.However, some repairs and overhauls have run into problems on account of lack of infrastructure, spares and expertise. The infrastructure, expertise and work culture has not kept pace with time, leading to below par and inefficient performance.

Benefits:
• The main advantage of the model is that the targets are achieved in lesser time frame.Also, it will boost competitiveness among the private entities paving way to newer technologies.
• The GOCO model will bring in corporate culture, leading to efficiency and accountability.Private operators can easily go into partnership with Original Equipment Manufacturer (OEM), both for expertise and spares.
• The government can save on manpower — 12,500 personnel workforce of the ABWs.
• This model also opens avenues for absorbing trained retired personnel, which can be built into the contract.

Concerns:
• The corporate world is driven by market forces, which means the GOCO model will be more costly. In most cases, private operators will want better infrastructure, which would have to be upgraded or replaced at government cost.
• Private operators may not have the expertise to deal with military equipment; they are also unlikely to absorb the existing manpower and will want a younger and better-trained workforce.