In order to ensure greater transparency, impartiality, accountability and speedier acquisition of armaments, India issued Defence Procurement Procedure-2008 on Friday. Defence Minister, A K Antony while unveiling the policy said the thrust is to give a boost to indigenous defence industry and to eliminate the middlemen.
Highlighting the significance of DPP-2008, Antony stated that we have a vibrant democracy and so we have to follow a set of procedures for acquisition of systems, which must be transparent. He said, “Armed Forces all over the world are in a process of speedy modernisation and restructuring. India cannot lag behind in this trend. We want a highly modern Armed Force, which will be able to respond quickly and which will be able to meet any challenges.”
“The DPP-2008 is the outcome of the experience and feedback gained in implementation of the existing procedure,” said the Defence Minister.
The policy will expedite the indigenisation of defence products and will enable the defence ministry to avert delays. To enhance efficiency and accelerate decision making process, the services have been provided greater financial powers for capital acquisition.
The defence minister said the service headquarters will henceforth approve cases of up to Rs 50 crores. Financial power delegated to the Defence Secretary has also been increased to Rs 75 crores. The Defence Procurement Board would accord AON (Acceptance of Necessity) to cases up to Rs 100 crores. And to the cases above Rs 100 crore, Defence Acquisition Council will have the upper hand.
Antony stated that no compromise on the quality of products will be tolerated and the defence PSUs will have to sign Integrity pact with their sub vendors in all cases where procurement value springs over 20 crore rupees. Also, to cut delays, the existing provisions for grant of extension of time against RFP have been restricted to only eight weeks.
After identifying L-1 vendor, no further price negotiations would require in multi-vendor cases. The provision is also laid to cut long delays. The AON will be considered lapse if RFP is not issued within two years from the date of accord of AON. In such cases, fresh AON will be considered only after re-examination of available technology and operational necessity.
The Defence Procurement Procedures came into effect from December 30, 2002, known as DPP-2002. The scope of this procedure was enlarged in June 2003, which augmented its strength in terms of decision making from ‘Buy’ to ‘Buy and Make.’ The procedure went on further reviewing and the new DPP-2005 came into effect.
It was in 2006 at the time of promulgating DPP-2006, it was decided that Defence Procurement Process will be reviewed every two years. The revised process named as DPP-2008 thus will come into effect from September 01, 2008.
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