NEW PROCUREMENT POLICY

Ministry of Defence, after holding stakeholder consultations with Industry Associations, Think Tanks, Services and other government agencies, promulgated Defence Acquisition Procedure (DAP)-2020 with effect from 01 October 2020. Following are the salient features of DAP-2020 promoting ‘Aatmanirbhar Bharat’ and ‘Make in India’:

• Notification of positive indigenisation lists in respect of weapons/platforms to ensure that equipment as mentioned in the list is not procured ex-import post prescribed timelines.
• Highest priority to procurement under Buy (Indian-Indigenous Design, Development & Manufacture[IDDM]) category.
• Indigenisation of imported spares through Make-III process introduced with the aim of enhancing self-reliance through import substitution.
• Reservation for MSMEs and small shipyards for orders up to Rs 100 crore/year.
• Increased Indigenous Content (IC) in various categories of procurement under DAP-2020.
• Reservation for Indian Vendors with ownership and control by resident Indians in procurement under the categories viz. Buy (Indian-IDDM) [Chapter-2], Make-I & Make-II [Chapter-3] and Strategic Partnership (SP) Model [Chapter-7] of DAP-2020.
• Introduction of new category of Buy (Global-Manufacture in India) to give push to ‘Make in India’ initiative of the Government.

To provide further impetus to domestic defence industry, Defence Acquisition Council (DAC) has approved on 22 March 2022 following amendments in DAP-2020:

• It has been decided that any import of defence equipment/sourcing from Foreign industry, irrespective of value and type of acquisition should only be an exception requiring specific approval of DAC/Raksha Mantri.
• To reduce financial burden on Indian Industry Integrity Pact Bank Guarantee (IPBG) has been dispensed with. Earnest Money Deposit (EMD) has been introduced as a bid security and Pre-Contract Integrity Pact (PCIP) cover till conclusion of contract. Post conclusion of contract, Performance cum Warranty Bank Guarantee (PWBG) to provide the PCIP cover. For projects upto Rs. 100 crore and for MSMEs & start-ups, EMD requirement has been waived.
• Procedure for acquisition through iDEX and Make-II has been simplified with compression of timelines.

This information was given by Raksha Rajya Mantri Shri Ajay Bhatt in a written reply to Shri Iranna Kadadi in Rajya Sabha on April 04, 2022.

 

ABB/Savvy