New Defence Procurement Procedure and Defence Procurement Manual, 2016

By CIOReview Team

The Defence Minister Shri Manohar Parrikar today said that MoD will soon be coming out with a new Defence Procurement Procedure as well as the Defence Procurement Manual, 2016. Addressing the Consultative Committee attached to his Ministry in New Delhi the Defence Minister said that the current Defence Procurement Procedure is under amendment and is under the consideration of his Ministry after a Committee of experts headed by Shri Dhirendra Singh had submitted its report. The Committee was appointed to evolve a policy framework to facilitate Make in India in defence manufacturing, align the policy evolved with DPP-2013 and suggest requisite amendments in DPP-2013 to remove bottlenecks in the procurement process and also simplify/rationalize various aspects of defence procurement. Along with this, the Defence Procurement Manual is under the process of internal vetting and is expected to be finalized by end June, 2016. 

The DPP has evolved to DPP-2013 through an iterative process since the first DPP in 2002 (2003, 2005, 2006, 2008, 2011 and 2013). It encapsulates the experience gained in implementing the procurement process over the years, feedback from the stakeholders, i.e. User Services, Quality Control and Maintenance Agencies, Defence Finance, Administrative Wing and Industry. Amendments are carried out continuously keeping in view the requirements of all stakeholders. 

In DPP-2013, the acquisition of Weapon Systems and equipment for the Armed Forces flows from the Long Term Integrated Perspective Plan (LTIPP). The current LTIPP spells out the capability desired to be achieved by the Armed Forces over 15 years duration (2012-27) The Categorization Committees while considering categorization of all capital acquisition under the Defence Procurement Procedure (DPP), follow a preferred order of categorization, in decreasing order of preference, as indicated below: 

(i) Buy(Indian) 

(ii) Buy & Make (Indian) 

(iii) Make 

(iv) Buy & Make 

(v) Buy (Global) 

This hierarchy of Categorization clearly marks a shift towards indigenous equipment. Department of DefenceProduction with its OFs and DPSUs has been a major instrument to foster Indigenization. However, over the last few decades, provisions such as “Make” and BUY+Make(Indian)” categories have been introduced to facilitate the participation of the private sector in defence production. 

Taking part in the discussion, Members of Parliament suggested that Government should give incentives under the Buy(Indian) and Buy & Make (Indian) categories. They also said that PSUs should also be allowed to bid for Buy(Indian) category and that offsets should be in terms of overall requirements of users. 

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