January 11, 2016; By: Nitin A. Gokhale
There is good news for indigenous defence industry, especially those involved in research and development. The new Defence Procurement Procedure (DPP) — likely to be approved by the Defence Acquisition Council (DAC) in the next couple of hours — is all set to introduce a new category for defence acquisition: Buy IDDM (Indigenously Designed, Developed and Manufactured). Information available with BharatShakti.in indicates that the Buy IDDM category will get the topmost priority amongst six categories that will constitute new DPP, which is the guiding document for all defence purchases in India.
In effect this will mean all those Indian companies who have the capability of designing and developing their products indigenously will from now on get the first preference in most purchases that the three armed forces undertake.
The new DPP will have many fresh ideas designed to accelerate defence acquisitions while encouraging indigenous companies under the flagship programme of Make in India. For instance, in order to cut down delays, the DPP will henceforth mandate that all AONs (Acceptance of Necessity) of a particular platform will be valid only for only six months as against the 12 months deadline that it currently provides. Moreover, no AON will be notified until it is accompanied by a finalised RFP (Request for Proposal or detailed tender). In essence, this eliminates one intermediate stage since notifying an RFP after an AON used to be inordinately delayed.
In another step that will make sure only genuine Indian companies participate in Buy Indian, Buy & Make Indian and Make cases, DPP clearly lays down definition of Indian Company. The company will have to be controlled and operated by Indian nationals to be eligible to participate in this category.
In an effort to give guaranteed business to Indian companies, the Make procedure will have three distinct categories. In the Make Procedure category 1, the government will fund upto 90 per cent of the cost and will give upto 20 per cent advance for defence manufacturers to develop original equipment besides allotting a 20 per cent mobilisation advance to them. This category will be under the direct control of the Department of Defence Production (DDP).Similarly, category 3 will be earmarked for small scale industries.
Given the fact that in many cases, only one company has a particular product required by the armed forces, the new document is all set allow a ‘single vendor’ situation at every stage—bid submission, Technical evaluation and Staff evaluation—as long as the company complies with the laid down procedures.
Among other path breaking provisions proposed in the new DPP relate to future projections and aligning them with the 15-year Long Term Integrated Perspective Plan (LTIPP). Each service HQ will be mandated to have a two-star officer heading a Project Management Unit (PMU) that will determine the future road-map in consultation with the defence industry. This will bring in synergy in the long-term planning between the MoD and the industry.
While most of the new provisions are being discussed today, a new blacklisting policy for companies involved in wrongdoing and the concept of choosing strategic partners for major weapons platforms will be taken up in the next meeting of the DAC.
Game Changing Policy in Defence Procurement about to be approved | Bharat Shakti
There is good news for indigenous defence industry, especially those involved in research and development. The new Defence Procurement Procedure (DPP) — likely to be approved by the Defence Acquisition Council (DAC) in the next couple of hours — is all set to introduce a new category for defence acquisition: Buy IDDM (Indigenously Designed, Developed and Manufactured). Information available with BharatShakti.in indicates that the Buy IDDM category will get the topmost priority amongst six categories that will constitute new DPP, which is the guiding document for all defence purchases in India.
In effect this will mean all those Indian companies who have the capability of designing and developing their products indigenously will from now on get the first preference in most purchases that the three armed forces undertake.
The new DPP will have many fresh ideas designed to accelerate defence acquisitions while encouraging indigenous companies under the flagship programme of Make in India. For instance, in order to cut down delays, the DPP will henceforth mandate that all AONs (Acceptance of Necessity) of a particular platform will be valid only for only six months as against the 12 months deadline that it currently provides. Moreover, no AON will be notified until it is accompanied by a finalised RFP (Request for Proposal or detailed tender). In essence, this eliminates one intermediate stage since notifying an RFP after an AON used to be inordinately delayed.
In another step that will make sure only genuine Indian companies participate in Buy Indian, Buy & Make Indian and Make cases, DPP clearly lays down definition of Indian Company. The company will have to be controlled and operated by Indian nationals to be eligible to participate in this category.
In an effort to give guaranteed business to Indian companies, the Make procedure will have three distinct categories. In the Make Procedure category 1, the government will fund upto 90 per cent of the cost and will give upto 20 per cent advance for defence manufacturers to develop original equipment besides allotting a 20 per cent mobilisation advance to them. This category will be under the direct control of the Department of Defence Production (DDP).Similarly, category 3 will be earmarked for small scale industries.
Given the fact that in many cases, only one company has a particular product required by the armed forces, the new document is all set allow a ‘single vendor’ situation at every stage—bid submission, Technical evaluation and Staff evaluation—as long as the company complies with the laid down procedures.
Among other path breaking provisions proposed in the new DPP relate to future projections and aligning them with the 15-year Long Term Integrated Perspective Plan (LTIPP). Each service HQ will be mandated to have a two-star officer heading a Project Management Unit (PMU) that will determine the future road-map in consultation with the defence industry. This will bring in synergy in the long-term planning between the MoD and the industry.
While most of the new provisions are being discussed today, a new blacklisting policy for companies involved in wrongdoing and the concept of choosing strategic partners for major weapons platforms will be taken up in the next meeting of the DAC.
Game Changing Policy in Defence Procurement about to be approved | Bharat Shakti
