Draft policy of Defence Procurement Procedure 2020 to have multiple new features

To ease out the procedure of procurement, the Defence Ministry has introduced various new features in its draft of Procurement Procedure 2020.

The Centre has introduced "Leasing" as a new category for acquisition in addition to existing Buy' 86 'Make' categories to substitute huge initial capital outlays with periodical rental payments. Leasing is permitted under two categories -- Lease (Indian), where Lessor is an Indian entity and is the owner of the assets, and Lease (Global) where Lessor is a global entity.

"The Indigenous Content (IC) stipulated in various categories of procurement has been enhanced to support the 'Make in India' initiative. In addition, a simple and realistic method methodology has been formulated in incorporated for verification of indigenous content," said the Defence Ministry in a statement.

A new category "Buy global-manufacture in India" has been introduced with an outright purchase of equipment from foreign vendors for quantity, considered necessary with minimum 50 per cent IC on a cost basis of total contract value, and balance quantity to be manufactured in India. This would be in preference to the 'Buy Global' category.

Similarly, price variation clause has been introduced which will be applicable in all cases where the total cost of contract is more than Rs 1000 crore and delivery schedule exceeding 60 months.

"To foster innovation and technology development in Defence 86 Aerospace, the concept of 'Innovation for Defence Excellence (iDEX)' has been introduced wherein industries including MSMEs, Startup, Individual Innovations, R & D Institutions and academia will be engaged," the ministry said.

"For further refining the acquisition process, additional chapters have been introduced on Information, Communication and Technology (ICT) and Post Contract Management. These set out the policy and procedures for procurement of ICT related projects and ensure harmony between pre and post contracting agencies to assist the vendors," the ministry added.

"To facilitate greater participation of Indian Industry and develop a robust defence industrial base, use of indigenous raw materials, special alloys, 86 softwares have been incentivised. In addition, aero-engines and FAB manufacture have been earmarked as projects of national importance," it further said.

The draft would be available online on the Defence Ministry's website for suggestions from the public till April 17.