Antony unveils DPP 2008, introduces offset banking

New Delhi, Aug 1 (UNI) The Centre today announced a revised defence procurement policy with an emphasis on transparency in vendor selection, speedy procurement and a faster process of indigenisation.

Outlining the features of the Defence Procurement Procedure (DPP) 2008 at a press conference here, Defence Minister A K Antony said the new policy which comes into effect from September 1, marks a significant departure from the existing procedure, by introducing the concept of ''offset banking'' under which a company executing an order will be able to transfer the value of the work done in India to fulfil the offset requirements of another order.

''This will enable foreign industry and their Indian offset partner to have long term arrangements to discharge offsets and will thus enhance the capacity of the Indian industry to absorb offsets,'' he said.

To eliminate corruption in vendor selection, the Minister said vendors will be given advance information before the issue of request for proposal (RFP) in all procurement cases, except those for security sensitive products. ''The result of technical/trials evaluations alongwith reasons for disqualificaiton will be intimated after evaluation reports are accepted,'' he said.

The new norms also seek to enhance indigenisation, help PSUs and private companies and strengthen the Defence Research and Development Organisation (DRDO), he said.

''The new procedures seek to reduce dependence of Indian defence sector on foreign suppliers. Our procurements comprise a large number of imports. We cant allow this for long. The Indianisation process must get going. Industries must make use of this opportunity, so that we produce most of our equipments here,'' he said.

In order to provide a level-playing field to the private industry, Mr Anthony said the new DPP does away with the rule to have a special license (in addition to the industrial license) to enter the defence sector. ''Now there is no need for a defence license,'' he said.

Stressing on ensuring quality and reliability, the Minister said the vendors would be required to give details of a reliability model and basis of reliability prediction.

''We will not impose on the armed forces anything that is inferior in quality,'' he said in reply to a query.

To expedite procurements, Mr Antony said the Services have been given greater delegation of financial powers for capital acquisation.

''Service headquarters can now approve cases upto Rs 50 crores and the Defence Secretary upto Rs 75 crores, apart from the Defence Procurement Board that can now accord AON (Acceptance of Necessity) to cases upto Rs 100 crores,'' he said.

UNI MMG RR RN1427