New DPP from November 1: Defence Minister Antony

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New Delhi, Oct 27 (ANI): Defence Minister A.K. Antony announced here on Tuesday that the new defence procuring procedure (DPP) would be effective from November 1.

Addressing a national seminar on defence acquisition, organized by the Institute for Defence Studies and Analyses (IDSA) Antony said: "The new policy would be akin to the existing make procedure with a vital difference that the production and development by Indian industry will be through transfer of technology and not through Research and Development."

"The move is primarily aimed at encouraging pro-active participation by the Indian industry who could establish joint venture production arrangements with any foreign manufacturer," he added

Antony said the needs of the services would be shared with capable Indian firms who in turn would submit a roadmap for development and production of a particular item over its life cycle.

"This would help Indian Industry to work out the technological requirements and build in-house capabilities in order to meet the future defence requirements. I am sure that the industry will respond positively to this proposal," he said.

Under the current procedure in buy and make cases request for proposal (RFP) is issued only to foreign vendors, who are required to transfer technology to Indian defence industry. This does not promote setting up of joint ventures or co-production arrangements in India by big foreign original equipment manufacturers (OEMs).

But the new policy has the potential to revolutionize the Indian defence industry, with its clause buy and make (Indian) which can issue RFP to Indian industries having requisite financial and technical capabilities to absorb technology and undertake indigenous manufacture.

The Defence Minister said, the twin objectives of DPP-2009 aim at promoting and facilitating wide participation of defence industry, while enabling transparency and integrity in all acquisitions.

"To ensure transparency and enhanced awareness in the Indian industry, the government will prepare a public version of the fifteen years long term acquisition plan of the armed forces," Antony said.

"This will be placed on the Defence Ministry's website and shared with industry associations to create requisite awareness amongst them," he added.

The DPP-2009 made it mandatory for the ministry to issue of Request for Information (RFI) all acquisition cases on its websites.

According to Defence Ministry, to enable participation of industry in defence acquisition planning, it will henceforth invite industry representatives for consultations and presentations in high-level procurement meetings before a decision is taken on the source and methodology for procurement of defence weapons and equipment.

The new policy also proposes to enhance the role of independent monitors, to scrutinize complaints with regard to violations of integrity pact, which prohibits corruption in defence deals.

In order to facilitate discharge of offset obligations, an enabling clause has also been incorporated to permit change of offset partners in exceptional cases.

"The offset provisions for the option clause has been amplified to state that the Offsets will not be applicable in cases where the same was not included in the original contract," Defence Ministry stated.

Antony expressed hope that these changes will bring in greater degree of probity in the procedure and also encourage domestic defence industry to develop.

Antony asked defence personnel to ensure that the qualitative requirements (QRs) formulation is done in a manner that fulfils the end user's basic requirements while at the same time it should encourage the widest possible competition.

"It is only through competition that we can ensure the maximum value for our money. It is important to have broad-based and realistic QRs that would lead to multivendor competition", he said.

Noting that the occasional changes in QRs by the services also led to delays in defence acquisitions, Antony said: "Acquisitions once approved by the Defence Acquisition Council (DAC), changes to RFP and QRs should be avoided and exercised only exceptionally."

Referring to the technical and commercial aspects of evaluation, Antony said: "We need to ensure these vital stages are completed not only in a fair, objective and transparent manner, but within the stipulated time frame." (ANI)

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