defence procurement manual 2009 india

defence procurement manual 2009 india

All documents are available in the PDF format. Users can get information on the officials, Ordnance Factories Organisations, Defence Public Sector Undertakings, autonomous institutes, private sector participation etc. Annual reports of the department are available. Details of admission process, age limit, entrance examination, availability of prospectus, etc.Information on the Department of Defence, Department of Defence Production, Department of Ex Serviceman Welfare (DESW), Defence Research and Development Organisation (DRDO), work allocations, etc.DGR is responsible for resettlement and welfare of ex-servicemen, widows and their dependents. Users can get information on Employment Directorate, Publicity Directorate, PIOs etc. Information on security agency is given. A link to the Defence Research and Development Organisation website is also provided. Details of Institute for Defence Studies and Analyses (IDSA), its activities, IDSA journal and training programmes are given. Details on official language division and defence cooperation is available. Users can also get details about. Information about structure, historical background, present organisational setup, etc is available. Get details of the role and functions of Finance Division and other associated organisations. Detailed information on the Controller General of Defence Accounts (CGDA) is available. Information about the location of Controller Offices, organisation of Ordnance Factories. The Supreme Command of the Armed Forces vests in the President of India. The responsibility for Defence of the country rests with the Cabinet. Order of precedence of these awards is the Param Vir Chakra, the Ashoka Chakra, the Mahavir Chakra, the Kirti Chakra, the Vir Chakra and the Shaurya Chakra. The College constantly re-examines and refines the training process, taking environmental changes into consideration, so as to be contemporary in the field of management studies.

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Discover everything Scribd has to offer, including books and audiobooks from major publishers. Start Free Trial Cancel anytime. Report this Document Download Now Save Save Defence Procurement Manual 2009 For Later 100 (1) 100 found this document useful (1 vote) 1K views 413 pages Defence Procurement Manual 2009 Uploaded by swifthunt Description: Full description Save Save Defence Procurement Manual 2009 For Later 100 100 found this document useful, Mark this document as useful 0 0 found this document not useful, Mark this document as not useful Embed Share Print Download Now Jump to Page You are on page 1 of 413 Search inside document Browse Books Site Directory Site Language: English Change Language English Change Language. Officials said the panel will recommend measures to remove procedural bottlenecks and hasten defence acquisition Officials said the panel will recommend measures to remove procedural bottlenecks and hasten defence acquisition. However, acquisition processes of a large number of military platforms and weapons are not moving forward due to procedural delays. No additional sign-up required. Kindly visit the Manage my subscription page to discover the benefits of this programme. Enjoy Reading! Team Business Standard. The new procedure aims to increase the indigenous manufacturing. Highlights The new procedure aims to increase Indigenous Content ratio. The ratio is the percentage of content of the defence equipment built in India.It was unveiled by Union Defence Minister Manohar Parrikar on the sidelines of the Defexpo-2016 held in Goa. The DPP 2016 will replace the Defence Procurement Procedure 2013 (DPP 2013) and shall come into force on 1 April 2016. Apart from DG (Acq) the 11 other members who part of this high-level committee should not be below rank of Joint Secretary or Major General equivalent.

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Aligning procedures will not only ensure seamless flow from asset acquisition to life cycle support but also strengthen Make in India initiative of Government of India. The Committee will also examine and incorporate new concepts, such as life cycle costing, life cycle support, performance-based logistics, lease contracting, codification and standardisation and to promote Indian start-ups and research and development Any other aspect which will contribute towards refining the acquisition process and support the 'Make in India' initiative, it said. The Committee has been given six months to submit its recommendations. Do You Like This Story. Awesome! Now share the story Posted by Sumeda Tags: Follow Rajnath Singh. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy.If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details.If you wish to opt out, please close your SlideShare account. Learn more. You can change your ad preferences anytime. Why not share! You can also request things like research papers or dissertations. It’s really convenient and helpful.I sent a request to ? www.WritePaper.info ? and found a writer within a few minutes. Because I had to move house and I literally didn’t have any time to sit on a computer for many hours every evening. Thankfully, the writer I chose followed my instructions to the letter. I know we can all write essays ourselves. For those in the same situation I was in, I recommend ? www.WritePaper.info ?.RevenueYear DevelopmentAgency (DOFA) created.Long Term Integrated Perspective Plan (LTIPP).Long Term Integrated Perspective Plan (LTIPP). Services Capital Acquisition Plan (SCAP). Annual Acquisition Plan (AAP). Defence Research and. Design OrganisationProduction (DDP). Ministry of DefenceMinistry of Defence MoDService Headquarters. Request for Information (RFI).

Staff Qualitative Requirements (SQR). Statement of Case (SOC)Civil Industry. Participation. Defence Acquisition Council (DAC). Defence Procurement Board (DPB). Service Capital Acquisition Plan. Categorisation Higher Committee (SCAPCHC). Categorisation Committee (SCAPCC). Headquarters Integrated Defence Services (HQIDS)Ministry of Defence ( MoD). Opens technical proposals, hands them over to. SHQ. Commercial proposals lie unopened. Ministry of Defence ( MoD). Service Headquarters (SHQ). Receivers open technical proposals from HQ IDSTechnical Evaluation Committee (TEC). Ministry of Defence (MoD). Issues Request for Proposal (RFP). Ministry of DefenceOpens commercial proposals of technicallyMinistry of Defence ( MoD). Approves staff evaluation reports and forwardsMinistry of Defence (MoD). Approvers TEC reports and asks. Service Headquarters to carry out. Field Evaluation Trials (FET). Ministry of DefenceDefence Procurement Procedure (DPP)Sanctioning AuthoritiesStaff Qualitative Requirements (SQR). Acceptance of Necessity (AoN) and Quantity Vetting. Two Bid System Single Bid. System. Proprietary Article CertificateTechnical Evaluation. Contract Negotiations. RFP Vetting and Issuance of RFP. Total duration for this processS No DPP 2013 DPM 2009Headquarters and Ministry of. Defence. Delegated to Command. Headquarters up to unit levelRepresentatives can participateDefence offset obligations are applicable to all capitalAvenues for discharge of offset obligations may be done by anyOffset Partners (IOP) and Indian enterprises, i.e. Defence Public. Sector Undertakings (DPSU), Ordnance Factory Board etc.Development Organization in areas of high technology.Products and Services those are eligible through offsetIOP for implementing the offset obligation provided the IOP hasPeriod of the main contractDepartment of Defence Production (DDP) is responsible forNow customize the name of a clipboard to store your clips.

Align and standardise the provisions in the DPP 2016 and DPM 2009, wherever applicable, to optimise life cycle support for equipment. Simplify policy and procedures to facilitate greater participation of Indian Industry and develop robust Defence Industrial base. There are a total of six procurement categories as mentioned in the below-given table. The acquisition cycle mentioned in DPP 2016 is made of 12 stages whereas in DPP 2013 it was 11 stages. It has increased by 10 from 80 . The remaining 10 will be reimbursed if the RFP for the product is not issued within 2 years of successful development of the prototype. Even for the second category, i.e. projects undertaken by Indian Industry will also result in the entire cost of development being reimbursed by MoD if the RFP is not issued within 2 years of successful development of the prototype. However, a committee established in September 2019 has been mandated to bring about necessary amendments in this chapter. The Make project was split into two Make I (Govt funded project) and Make-II (Industry funded project) with special focus on Micro, Small and Medium Enterprises (MSME). The government will fund 90 of the projects and low-value projects have been reserved for MSME. Moreover, 100 of the project will be funded by the Government if there is a delay in the release of RFP by 2 years. However, since it handles highly dynamic situations there are bound to arise new challenges that need to be handled.The larger aim of setting up this committee is to ensure that there is a seamless flow of Asset Acquisition for all the wings of Indian Armed Forces to completely taking care of Lifecycle Costs borne by Indian Armed Forces acquiring the required assets. The committee will come up with fresh norms in a span of 6 months i.e by March 2020. This Special Feature analyses some of the key provisions of the new procurement document.

Under the new category, indigenously designed equipment with 40 per cent indigenous content (IC), or equipment not necessarily designed in-house but having a 60 per cent IC, is intended for procurement from the local industry. The intent is clearly to promote in-house design capacity and higher localisation, two critical aspects, which, if implemented in the right spirit, could deepen the role of domestic industry, especially the private sector, in defence production. To examine the industry’s claim, DPP-2016 provides for a committee system comprising scientists from the Defence Research and Development Organisation (DRDO) and members of the concerned Service Headquarters (SHQs). The guidelines, on the basis of which the committee would verify the claims, would be promulgated later by the MoD. Pending the release of the guidelines, it would, however, not be unreasonable to argue that the newly provisioned committee has a challenging task ahead. Given these constrains, it looks like that the committee would rely mostly on the undertakings and documentary proof submitted by the industry for the purpose of certification. However, while setting the higher target, the DPP has not lost the sight of the unique procurement cases which require a different indigenisation requirement. For such cases, DPP-2016 provides flexibility to the procurement authorities to stipulate either a higher or lower indigenisation content, depending on the merits of the projects. The industry was particularly vocal with regard to critical aerospace items, in which local capability stands at a bare minimum and achieving even 20 per cent IC is a difficult task at the present state of India’s defence industrial development. It may be noted that the Hindustan Aeronautics Ltd (HAL), the state-owned monopoly in aircraft manufacturing, depends on foreign sources to the extent of 80 to 90 per cent for input materials.

DPP-2016 has attempted to plug certain loopholes by way of making a number of changes, beginning with the planning process. The newly provisioned body is intended to instil a sense of ownership among the armed forces whose direct involvement is critical in any successful development of a military item. In a move to ensure continuity in decision-making, the head of the Make-PMU is required to have a minimum tenure of three years, whereas other officials are required to have a longer tenure. The Head and the members are also required to serve as key members in the important multi-disciplinary Integrated Project Management Team (IPMT), which has the key responsibilities of preparing the Project Definition Document (PDD), issuing the Expression of Interest (EoI), shortlisting the developmental agencies, and monitoring the progress of prototype development. It seems that the DDP, which has long been criticised for its limited role in defence indigenisation efforts, is now trying to acquire a larger role under the new DPP. As the names suggest, for the category of Make-I projects, it is the government that would take the lead in funding prototype development by the industry; whereas for the latter category, which is largely confined to import substitution, it is the industry that would bear the full cost of development. In order to bring in a degree of accountability and to follow best commercial practices, the new procedure provides for the mandatory issuance of the request for proposal (RFP) within two years’ of successful development, failing which the balance 10 per cent funded by the industry would be reimbursed to it. In other words, only when MSMEs are not interested in taking up small valued projects, it can be opened up for participation by the bigger industry players. In other words, Joint Ventures (JVs) having foreign equity of more than 49 per cent would not be eligible.

Time for an American base in an Indian island China's Curious Wars The Unfolding Situation at the India-China. Old Chinese habits die hard but have we learnt. Yellow Boys - Skinner's Horse Sino- Myanmar Pauk-Phaw Relationship under Strain. This move comes amid demands of the Indian Air Force and the Indian Navy to have state of the art equipment and armaments to deal with rising challenges. He further assured that the new versions will be ascertained by March 2020. The procedures lay down the process for buying weapons and equipment from the defence capital budget while the manuals govern the acquisition from the defence budget. Whether it is relaxation of norms for FDI in Defence or the new Defence Procurement Procedure (DPP 2016), Government of India has paved way for a robust defence manufacturing in the country. Indian defence industry has now developed the competence, capability and capacity to produce sub-systems which could be integrated into larger platforms. Indian industry offers very high level of engineering and technology skills in all areas of defence and aerospace. This procedure encourages co-development and co-production approach by FOEMs, with their Indian Partners. Further, the definition of Indian Vendor in DPP makes it possible for Joint Ventures between Indian Companies and Foreign OEMs to participate in the capital procurement schemes of Ministry of Defence. CII has welcomed the industry friendly changes.CII has been at the forefront ever since the defence manufacturing was opened up for the private sector’s participation. Government of India has already accepted several requests of CII which are essential for creating a vibrant domestic defence industrial sector. Extension of validity of Industrial License, promulgation of Security Manual for Industrial Licensee companies, level playing field, increase in the FDI limit, availability of test facilities, to name a few.

The defence spending has been growing in recent years and is expected to grow at the rate of 7 to 8 annually over the next five years. Defence offsets provide huge opportunities to Indian companies. With over USD 250 Bn worth of procurement over next 10 years, the Defence Sector is expected to lead the Make in India initiative of the Government. In last 30 months, setting an encouraging trend, MoD has approved 85 schemes worth Rs.1,60,362 Cr under “Buy and Make (Indian)” category. With rising passenger traffic and increasing military and defence expenditures, the demand for aircrafts is expected to increase further. The Indian aerospace industry is one of the fastest growing sectors. India is expected to become the 3rd largest aerospace industry by 2020. The new Defence Procurement Procedure (DPP 2016) and National Civil Aviation Policy (NCAP 2016) highlight the intent of the government to alter the status quo and that’s a positive sign. These include both macro and micro factors - strong economic growth that has resulted in rapidly growing domestic aircraft demand, the liberalization of civil aviation policies, offset requirements, a strong domestic manufacturing base, cost advantages, a well-educated talent pool, the ability to leverage IT competitiveness and a liberal Special Economic Zones law that provides attractive fiscal benefits for developers and manufacturers. With the Government opening up and providing enormous opportunities to the private sector, many global and domestic players are collaborating and having joint ventures for manufacturing of aero components, Maintenance, Repair and Overhaul (MRO) facilities for civil and military aviation sectors, besides overhaul and maintenance of aero engines. India’s MRO segment is estimated to grow at 10 percent and reach USD 2.6 billion by 2021. Boeing has forecast a need for over 39,600 aircraft to be added during 2016-2035, with approximately 38 percent deliveries to airlines in the Asian region.

Airbus has forecast a demand for 33,070 new aircraft deliveries during 2016-2035. On an average, around 42 of the demand will be for replacement of the existing aircrafts and 58 will be the incremental growth. Single-aisle airplanes will dominate the world’s fleet with around 71 share of new deliveries during 2016-2035. This indicates a large pipeline of orders in military aircraft segment, with a growing need for Indian sourcing partners. Existing Offset obligations of foreign OEMs are approximately USD 5 Bn. Offsets for another 10 to 12 Billion USD are in the pipeline, which will be required to be discharged over the next 8 to 10 years. This also suggests that a significant portion of business opportunity could accrue to India, due to the associated offsets. The total spending in the next 5 years is expected to be between USD25 billion (assuming uniform demand) for commercial aircrafts and USD100 billion as defence expenditure. Out of the defence expenditure, approximately 15-20 percent (USD15-20 billion) is expected to be spent on military aircrafts. Assuming an offset of 30 percent for the civil sector too, the total offset opportunity for the aerospace sector is valued to be at least USD10-15 billion. As Indian manufacturing capabilities mature over the years, it is expected to capture a large share of this opportunity. Defence Procurement Procedure (DPP) has been amended in 2016 to provide for the following: The manual clarifies the security architecture required to be put in place by the industry while undertaking sensitive defence equipment. Mandatory offset requirements of a minimum of 30 for procurement of defence equipment in excess of USD 307.69 million have been envisaged. New Delhi - 110003, India. The committee will revise and align the procedures with the aim of ensuring seamless flow from asset acquisition to life cycle support. India does not have an overarching statute governing procurement of defence and security articles.

Procurements by the government and its agencies are broadly governed by the General Financial Rules 2017 (GFR), which provides the framework under which all government procurements are undertaken. The Defence Procurement Procedures (DPP) and the Defence Procurement Manual (DPM) are the principal regulations for defence and security procurements undertaken by the Ministry of Defence (MoD). The DPP and DPM are based on government procurement principles contained in the GFR, but hold the bidders and vendors to a higher standard of compliance and administrative scrutiny. The DPP governs the procurement of long-term strategic assets (classified as capital procurements) and is indicative of the country’s defence production policy. It also serves as an important tool to understand the manner in which defence procurement contracts are likely to be interpreted by the MoD in the event of an ambiguity. The DPM governs the procurement of non-strategic and bulk procurements of goods such as uniforms, non-military stores etc (classified as revenue procurements). Apart from the DPP and DPM, government procurements are also subject to the policies and directives issued by the Central Vigilance Corruption (CVC), the apex anti-corruption monitoring institution in India. The CVC periodically issues binding instructions required be followed across ministries for procurements. Identification How are defence and security procurements identified as such and are they treated differently from civil procurements. Both defence and civil procurements are conducted under the principles provided in the GFR. A few noticeable differences in procedure between defence and civil procurements are as under: The defence establishment (navy, air force, army) seeking to procure articles is required to present a detailed report justifying the procurement, which is required to be approved by a committee.

The approval is called the Acceptance of Necessity (AoN), which is the point of initiation of the procurement process. Procurements of defence and security articles follow a defined categorisation process, based on the domestic availability of the articles and capability of the Indian industry to manufacture the same. Each category has a separate procedure for the procurement process. Participation by foreign vendors in procurement contracts for defence and security articles under the DPP exceeding 20 billion rupees in value necessarily require offset obligations to be undertaken and discharged by the foreign bidder. The range of offset varies between 30 per cent to 50 per cent of the contract value. Conduct How are defence and security procurements typically conducted. Defence procurements are usually conducted through an open tender system consisting of a two-stage bid process. The process follows the sequence as provided hereunder: The requirements are published as a Request for Information, soliciting interest from manufacturers. Based on the information received from the manufacturers, the technical requirements are formulated and approval by a committee constituted for this purpose. The committee provides its approval through an AoN. The Request for Proposal (RFP) is issued within six months of the AoN. The issuance of the RFP implies the formal initiation of the bid process. The bidders are invited to participate in a pre-bid meeting to seek clarifications on any technical, commercial or interpretative aspect of the RFP. Subsequently, the bidders are required to submit separate commercial and technical bids. The DPP also provides for establishment of several technical committees to evaluate each aspect of the bid. The technical bid is evaluated first and bidders that meet the technical requirements are invited to undertake field trials.

Post completion of the field trials, the commercial bids are opened, and preference is typically given to the bidder that quotes the lowest price. However, in certain circumstances, a vendor with superior technical product at a higher price may be chosen. After selection of the vendor, contract negotiations are initiated to finalise the contract. The procurement frameworks also envisage exceptional situations where an open tender system may not be feasible, such as: procurements below a de minimis value undertaken through direct orders placed on known vendors; procurements in emergency or crisis situations undertaken through a fast track procedure; procurements for sensitive equipment and systems undertaken directly at government levels; procurements for products for which only a sole vendor is available; For the above situations, the procurement process is curtailed, involves fewer procedural steps and is executed faster. Proposed changes Are there significant proposals pending to change the defence and security procurement process. The last significant amendment to the procurement process was undertaken in 2016 and 2017, with the issuance of the amended DPP and the GFR. As the amendments to the public procurement regime are recent, there are no significant proposals pending to change or overhaul the procurement process. Incremental amendments and revisions are frequently undertaken to facilitate the procurement process and provide operational guidance to bidders and contractors. Information technology Are there different or additional procurement rules for IT versus non-IT goods and services. The procurement process does not distinguish between IT and non-IT products and services therefore, the process and rules remain identical for procurement. However, the MoD retains the discretion to customise procurement parameters if deemed necessary.

Relevant treaties Are most defence and security procurements conducted in accordance with the GPA or other treaty-based procurement rules, or does this jurisdiction commonly use the national security exemption to procure them. India is not a signatory to the Agreement on Government Procurement (GPA) of the World Trade Organization nor to the model procurement law issued by the United Nations Commission on International Trade Law (UNCITRAL). Consequently, the Indian procurement laws are not modelled on either the GPA or the UNCITRAL model law. The Law Commission of India has recommended the adoption of principles and concepts from the GPA and UNCITRAL model law. Based on the recommendation, the Public Procurement Bill, 2012 has been tabled before the parliament. However, the bill has been pending before the legislature for the several years and is not expected to be enacted into legislation in the foreseeable future. Disputes and risk allocation Dispute resolution How are disputes between the government and defence contractor resolved. Arbitration is the preferred mode of dispute resolution in government procurements, including those for defence and security articles. Certain frameworks such as the GFR may also permit dispute resolution through civil remedies before the courts of India. Procurement contracts under DPP and DPM mandate arbitration to be governed by the laws of India and the seat of arbitration to be India. Subject to the nature, value and strategic importance of the procurement, the power to appoint arbitrators may vest solely with the buyer, with both parties or with an independent body such as the International Chamber of Commerce or its Indian counterpart. The burden of cost of arbitration may also be defined in the contract, which may be shared between the parties or left to the arbitrator or arbitral tribunal to decide. To what extent is alternative dispute resolution used to resolve conflicts. What is typical for this jurisdiction.

Alternative dispute resolution through arbitration is the preferred and de facto mode of resolving conflicts between the government and contractors, and between the contractors and subcontractors. Indemnification What limits exist on the government’s ability to indemnify the contractor in this jurisdiction and must the contractor indemnify the government in a defence procurement. The government typically does not provide any indemnities under defence and security procurement contracts. On the contractor’s side, the standard contract clauses will require the contractor to indemnify the government against infringement of third-party intellectual property rights in the goods or services purchased from the contractor. While technically not an indemnity, defence procurement contracts also require the contractor to execute bank guarantees for performance parameters and anti-corruption compliances. It is not uncommon for these instruments to be invoked in defence procurement contracts for failure to adhere to certain aspects of the contract, such as indigenous content requirements, delivery schedule, quality parameters, bribery and undue influence, etc. Limits on liability Can the government agree to limit the contractor’s liability under the contract. Are there limits to the contractor’s potential recovery against the government for breach. The standard contract document under the DPP does not contain any clauses limiting the contractor’s liability. However, under the provisions of the Indian Contract Act 1872 (ICA) an aggrieved party is only permitted to seek compensation to the extent of loss or damage that may naturally arise from a breach that could reasonably have been foreseen at the time of execution of the contract. The courts in India consider damages to be restitutive and not punitive in nature, hence are reluctant to award punitive damages.