No Cost No Commitment (NCNC) Trial

A No Cost No Commitment (NCNC) trial is an arrangement under which a defence vendor provides equipment to the Indian Armed Forces for evaluation and operational assessment, without the government paying for the equipment during the trial and without any commitment to purchase it afterwards. NCNC trials allow the armed forces to assess whether a technology genuinely meets their operational needs before initiating a formal procurement process.

What is a No Cost No Commitment (NCNC) Trial in government procurement?

NCNC trials emerge from a practical challenge in defence procurement: formal procurement processes are long and expensive, yet the armed forces need to assess emerging technologies early to make informed acquisition decisions. Without some mechanism for pre-formal evaluation, the services either initiate SQR formulation based only on vendor literature (which can lead to unsuitable specifications) or wait until a formal RFP stage to see equipment for the first time, wasting months if the technology does not work as claimed.

Under an NCNC arrangement, the vendor lends the equipment to the service for a defined trial period, typically 30 to 180 days. The vendor is responsible for all equipment costs including transport to the trial location, maintenance during trials, training of service personnel, and collection of equipment after the trial. The government provides operational test conditions, evaluators, and manpower for the trial. Neither party pays the other.

The government makes no commitment to purchase after an NCNC trial. The trial report may form part of the input to SQR formulation, informing what parameters are realistic and what envelope of performance is achievable with available technology, but it does not bind the government to initiate procurement, and if procurement is initiated, any vendor who meets the resulting SQR can bid on an equal footing.

NCNC trials are commonly used for: unmanned systems (drones, UGVs), counter-drone technologies, artificial intelligence-based battlefield systems, niche protection equipment, and communications technologies, essentially any category where the technology is evolving rapidly and the services need operational exposure to shape informed requirements.

DAP 2020 explicitly recognises NCNC trials as a tool in the procurement ecosystem and encourages their use, particularly for Make-II and iDEX-developed technologies, where domestic companies need pathways to demonstrate innovations to potential users before formal procurement begins.

Why it matters for bidders

For companies with innovative defence technologies, particularly startups and SMEs who might not have the track record to win open competition against established players, NCNC trials are a strategic entry point. A successful NCNC trial gives the company direct operational feedback, a relationship with the user, and the credibility of having had their equipment evaluated by the armed forces. This cannot be bought, it can only be earned through demonstrated performance.

The practical obligation in an NCNC trial is significant: the company bears all costs for the duration. For a 6-month trial with a team of 10 engineers supporting equipment in a remote Army location, the cash cost can easily reach Rs 50-100 lakh. This is a real investment that startup companies must plan for. However, the alternative, trying to win a defence contract without ever having had the armed forces evaluate the product, is commercially very difficult.

Companies should ensure they have a clear Non-Disclosure Agreement in place before any NCNC trial, protecting their technology and know-how from being shared with competitors or used to benefit competing procurement programs.

Example

A startup develops an AI-based ground surveillance radar capable of detecting and classifying human, animal, and vehicle targets across a 3-km perimeter. The Army's Infantry Directorate is interested but has not yet formulated SQRs. The startup proposes an NCNC trial at an Army post on the Line of Control. The Army agrees. The startup deploys two radars with three engineers for 90 days. The trial report documents detection probabilities, false alarm rates, power consumption, and harsh weather performance. The Infantry Directorate uses the trial data to formulate realistic SQRs. When the formal RFP is issued, the startup, with 90 days of operational data from actual deployment, has the strongest technical submission of any bidder.

Key rules / thresholds

An NCNC trial must be formalised through a trial directive issued by the relevant service headquarters. The trial must follow the standard evaluation protocols of the respective service's trial and evaluation organisation (Army: ATEC; Navy: DMDE; Air Force: ASTE). Trial reports are classified and not shared with the vendor's competitors. Acceptance into an NCNC trial does not constitute any form of purchase preference or advance qualification for future tenders.