New defence procurement policy comes into force

New Delhi, Jun 1: Against the backdrop of scams such as the VVIP chopper deal, a new defence procurement policy came into force today which aims at enhancing transparency and probity in military purchases and gives first right of refusal to Indian vendors to promote indigenous industry.

"The Defence Procurement Procedure 2013 which takes effect from today, aims to balance the competing requirements of expediting capital procurement, developing a robust indigenous defence sector and conforming to the highest standards of transparency, probity and public accountability," Defence Ministry said in a release.

While laying a strong emphasis on promoting indigenisation, the new policy aims at creating a level playing field for the Indian Industry, it said.

In his remarks in the foreword of the new policy document, Defence Minister A K Antony expressed hope that "the defence industry as well as the procurement agencies will find the DPP-2013 to be a 'progressive step' aimed at giving impetus to indigenisation, creating level playing field and expediting the procurement process as a whole."

Terming defence acquisition as a "complex" process, the Defence Minister said, it needs to balance the competing requirements of expeditious procurement, development of an indigenous defence sector and conformity to the highest standards of transparency and probity.

In the new policy, the Defence Ministry has accorded a "higher preference explicitly to the Buy (Indian), Buy and Make (Indian) and Make categorisation, besides bringing further clarity in the definition of the ‘Indigenous Content’ and simplifying the Buy and Make (Indian) process."

The DPP 2013 stipulates that if forces have to procure from foreign vendors under the Buy (Global) category, they will have to justify "not considering the other higher preference categories. This is expected to give a stronger impetus to indigenisation."

Seeking to expedite the procurement procedure, the new policy has reduced the validity of Acceptance of Necessity from two years to one year and the services have been told that services specifications would not be changed after the AoN is accorded by the Defence Acquisition Council.

"A higher delegation of financial powers to the Service Headquarters and the Defence Procurement Board (DPB) headed by the Defence Secretary has also been made. Together, these measures are expected to make the procurement procedure more efficient and reduce delays," the Ministry said.

The Ministry has also decided that any request for extending the timeline for submitting bids will have to be made two weeks prior to the bid submission dates "in order to encourage timely submission of the bids by the vendors and to discourage last minute requests for extension of time".

To promote the indigenous industry, the DPP 2013 has allowed the foreign vendors to nominate the Indian vendors of their choice for the maintenance of the equipment supplied to Indian forces by them.

The Ministry said further measures to strengthen the Indian defence sector are under consideration and will be brought about after due consultation with all stake holders.