New Delhi, Aug 1 : To promote transparency, open competition and impartiality in procurement for the defence sector, India today unveiled its new Defence Procurement Policy (DPP) 2008 which will become operational from September 1 this year.
Speaking on the occasion, Defence Minister A K Antony said: "We are very clear that we will not allow middlemen in defence contracts and suppliers whether foreign or domestic, will have to strictly adhere to the requirement of the armed forces.
Antony said that learning from the mistakes of the past in procuring arms for the armed forces "we have come up with DPP-2008."
"The most important aspect of the DPP-2008 is that it will enable the ministry to be more transparent in procurement, and at the same time, it will be speedy and avoid delays," the Defence Minister said.
Antony said that DPP-2008 would fasten the process of indigenisation of defence products and strengthen the Defence Research and Development Organisation (DRDO), our PSUs, and industries.
He added that after the introduction of DPP-2008, the Defence Research and Development Organisation would be able to motivate scientists and industry to produce more indigenous products.
Antny said for expediting the procurements services have been given greater delegation of financial powers for capital acquisition to enhance efficiency and expedite decision-making.
"Service headquarters will now approve cases of up to Rs.50 crore. Financial power delegated to Defence Secretary has been enhanced to Rs.75 crore and only cases above 100 crore will be brought before the Defence Acquisition Council," he said.
There would be no compromise on the quality of the products procured for the armed forces and defence PSUs will have to sign Integrity pact with their sub vendors in all cases where procurement value exceeds Rs.20 crore, Antony added.
Vendors will be given advance information before the issue of RFP (request for proposal) and result of technical trail/evaluation along with reasons for disqualification would also be intimidated to the vendors.
Commenting on controversy regarding the field trials, Antony said that trial methodology will be given in the RFP and the trial team will be broad based when the equipment is being procured for more than one Services or transfer of technology is being maintained.
Antony said that to get more participation of foreign companies in promotion of indigenous defence industry, Offset Policy has been revised to include offset credit banking enabling foreign vendors in creation of offset programmes in anticipation of foreign obligations.
As part of the implementation of report of the Group of Ministers on reforming the national security system post Kargil operations, the Defence Ministry set up new defence procurement management structures and systems in 2001. By Praful Kumar Singh