Defence Revolution: How India's New Procurement Manual Boosts Military Power

Effective from November 1, the new procurement manual will facilitate revenue procurement of approximately Rs one lakh crore by the three Services and other establishments under the Ministry of Defence (MoD).

Appreciating the efforts of MoD and HQ Integrated Defence Staff for the revision of the manual, Singh expressed confidence that the new manual will simplify the procedures, bring uniformity in functioning and be helpful in providing goods and services required by the Armed Forces for operational preparedness.

It will also provide more opportunities to MSMEs and start-ups in the field of defence manufacturing and technology, duly ensuring fairness, transparency and accountability in procurement.

Financial Advisor (Defence Services), Dr Mayank Sharma, gave a brief overview of DPM 2025 and highlighted how the manual has been prepared in close consultation with the services and other stakeholders.

Some key provisions have been altered to expedite decision-making and promote ease of doing business. Liquidated damages (LD), which are levied on delayed delivery of stores and services, have been relaxed, and maximum LD to the extent of 10 per cent will be levied only in cases of inordinate delay.

This provision has been further relaxed in the case of indigenisation, where only 0.1 per cent LD per week will be levied, instead of 0.5 per cent per week as applicable in other cases.

In addition, there are provisions for assured orders ranging up upto five years and beyond for items developed by public/private players under indigenisation. As per the revised provisions, Limited Tender enquiry can be resorted to for a value upto Rs 50 lakh and beyond that in exceptional cases.

In this revised manual, the condition for obtaining a 'No objection certificate' from the erstwhile Ordnance Factory Board before procuring from other sources has been dispensed with. The revised manual enables making an upfront provision for 15 per cent growth in work for Repairs/Refits of ships & Repair/Overhauling of Aviation equipment.

This will help reduce downtime and ensure the platforms' operational readiness. The provisions related to procurement on a PAC basis (Proprietary Article Certificate) have been redefined, maintaining their initial validity of two years.

All Request For Proposals (RFPs) to be issued after November 1 will be governed by the provisions of DPM 2025. All cases, where RFP has already been issued/will be issued upto October 31, will continue to be governed by the provisions of DPM 2009, amended upto date.

In cases where an RFP has been issued in the past but has been retracted/to be retracted and has to be reissued on or after November 1, the provisions of DPM 2025 will govern it.

For the convenience of the users, DPM 2025 has been prepared in two volumes. The main provisions of the procurement procedures are incorporated in Volume I. Volume II contains all the forms, appendices, and Government orders referred to in Volume I.

There are fourteen chapters in Volume I, including three new chapters: Promoting Self-reliance through Innovation and Indigenisation, Information and Communication Technology Procurement and Consultancy, and Non-Consultancy Services.

The new chapter on promoting self-reliance will foster indigenous design and development of Defence items to achieve Aatmanirbharta in Defence manufacturing and technology. The soft copy of the DPM 2025 has been uploaded to the MoD website for easy access.

The ceremony was attended by Chief of Defence Staff, Chief of the Naval Staff, Chief of the Army Staff, Defence Secretary, Secretary Department of Defence (R&D) and Chairman DRDO, Secretary (Defence Production), Secretary (Ex-servicemen Welfare), Financial Advisor (Defence Services), Vice Chief of the Air Staff, Controller General of Defence Accounts, Officer on Special Duty, Department of Ex-servicemen Welfare and other senior officials.

- ANI