Defence Minister approves new Defence Procurement Manual

Defence Minister Rajnath Singh approved the Defence Procurement Manual (DPM) 2025. This document governs the procurement of ammunition and spares. It will help in achieving self-reliance through innovation and indigenisation.

Ease of doing business has been further strengthened in the document. It aims to boost Aatmanirbharta in defence manufacturing and technology. The objective is to tap into the domestic market’s potential, expertise, and capability. This will be achieved by ensuring the active participation of private players, MSMEs, start-ups, etc., alongside the well-established Defence Public Sector Undertakings (DPSUs).

Procurement of goods and services by the Defence Services and other organisations under Ministry of Defence is regulated by DPM. It was last promulgated in 2009. This Manual was under revision in the Ministry in consultation with the Armed Forces and other stakeholders.

Progressive Guidelines in DPM

The DPM establishes the guiding principles and provisions for all revenue procurement in the Ministry. These procurement value around Rs 1 lakh crore for the current Financial Year. There is a pressing need for this manual to align with the latest developments in public procurement. It must ensure the use of technology with utmost fairness, transparency, and accountability.

The revised document now aligns with the updated provisions of the Manual for Procurement of Goods. These provisions were issued by the Ministry of Finance. As a major thrust to Aatmanirbhar Bharat, a new chapter has been included to promote self-reliance through innovation and indigenisation. This initiative will assist in the indigenisation of defence items and spares. It involves in-house designing and development. The work is in collaboration with public and private industries, academia, IITs, IISc, and other private institutions of repute. This will utilise the talent of young bright minds.

The concerns of individuals and industry wanting to venture into this sector have been addressed. This was achieved by relaxing many provisions of development contracts. Provision has been introduced not to levy Liquidity Damages (LD) during development phase. Minimal LD @ 0.1% will be levied post development of the prototype. Maximum LD to be levied has been lowered to 5%. Only in cases of inordinate delays will the maximum LD be 10%. This will incentivise suppliers who genuinely try to meet the deadline. They may make the supplies with a little delay.

A provision has been made to ensure an assured guarantee of orders in terms of quantity. This guarantee is provided for up to five years. Beyond that, an additional assurance can be provided for up to another five years in special circumstances. Another provision has been introduced for requisite support. Handholding by the Services will include sharing technical knowhow. This includes existing equipment to ensure successful development.

Enhanced Decision Making

The revised document will empower the Competent Financial Authorities at field level/lower formations. It will expedite decision making and avoid movement of files between lower and higher levels. It will ensure timely payment to the suppliers. Competent Financial Authorities (CFAs) have been empowered to make decisions in consultation with their financial advisors. They can grant extensions in the delivery period regardless of the quantum of delay. This process does not require them to approach higher authorities.

The concept of collegiate decision making has been further strengthened. This change aligns with existing practice for acquiring capital assets. The CFAs have been given power to increase bid opening dates up to a certain limit. They can do this if there is a lack of participation. This adjustment does not require referring the matter to their Financial Advisors to increase participation.

The repair, refit, and maintenance of various aerial and naval platforms are complex. Therefore, an upfront provision of 15% in growth of work has been extended. This applies to all such activities. This aims to reduce the downtime of equipment. It ensures the availability of equipment for operations with minimum delay. To fulfil the need for specialised goods, Limited Tendering can be used for values up to Rs 50 lakh. Beyond Rs 50 lakh, it can be used in exceptional circumstances. In the case of proprietary items, a provision for procurement on a Propriety Article Certificate basis has been kept. Efforts are being made in parallel to explore the market to identify alternative sources.

Adequate provision has been included to facilitate procurement based on Government-to-Government agreements. This streamlines the procedure followed in such special arrangements for high value procurement. The revised manual includes suitable provisions. These provisions address issues related to a level playing field between various players. The requirement of obtaining No Objection Certificate from some DPSUs before going for open bidding has been dispensed with. Now, tenders will be awarded purely on a competitive basis.

The document was last revised in 2009. It was under revision with the armed forces and other stakeholders. This DPM 2025 aims to further streamline, simplify, enable, and rationalise Defence Procurements.

The Defence Acquisition Procedure (DAP) 2020 is also being revised. These steps will help foster jointness among the three services. They will help maintain the highest level of military readiness. Officials and leaders will be decisive in optimizing the armed forces.

Boost to Atmanirhabar Bharat

DPM-2025 aims to further promote self-reliance through indigenisation. It also fosters innovation through in-house designing and developments. This is done with collaboration using the Public Private Partnership (PPP) model. Relaxation to companies who want to venture into defence sector are also going to be provided. For example, they plan to make a provision not to levy Liquidity Damages (LD).

There is a special provision guaranteeing orders in terms of quantity for 5 years and beyond. It includes requisite support through hand holding. There is also sharing of important information on technical knowledge to ensure successful development. Additionally, it involves government to government agreements.

India’s new defence equipment includes AK-203 rifles and advanced tanks. It also comprises Integrated Air Defence Weapon Systems (IADWS) using high power lasers to target drones and missiles. Further additions include HAL AMCA stealth fighter jets and Project 77 nuclear submarine. The focus is to enhance and become self-reliant. This includes enhanced procurement of 156 Light Combat Helicopters (LCH). There are also significant upgrades in SU-30MKI fighter jets.

For all latest updates Follow theviralmail on X, Facebook, and Instagram