Ahead of the Aero-India 2019, later this month, in the third phase of reforms the Defence Acquisition Council (DAC) headed by defence minister Nirmala Sitharaman last week approved significant changes in the Defence Procurement Procedure (DPP) 2016.
These are focussed on making the procedure industry friendly and simplifying certain aspects in an effort to make it easy for making is smoother and faster for procurement of operationally urgent requirements of the Armed Forces.
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Simplification of the best price determination process is one of the major steps incorporated in these changes wherein latest government policies on GST and custom duties have now been taken into account in an effort to evaluate the lowest bidder and the existing price bid format has been simplified. This is expected to encourage more Indian vendors to participate in the process as it gives them a duty advantage compared to foreign bidders.
Submission of bank guarantees from Indian Private Sector Banks authorized by RBI in addition to all Public Sector Banks has been approved in order to ease financial transactions enabling competitive pricing.
The idea behind this is to cut overhead costs of seller incurred while obtaining these guarantees from banks and to enable faster financial transactions. The MoD has also tried to streamline the Fast Track Procedure for speedy procurement of operationally urgent requirements has also been approved.
With the aim to enhance efficiency and reduce timelines, these amendments are expected to provide further impetus to the indigenous defence industry in the country as also to encourage foreign manufacturers to `Make in India’.
Important measures instituted in earlier phases included amendments to the Repeat Order clause which allowed orders to be placed for equipment procured by CAPF/CPMF and other agencies of the MoD including Border Road Organisation without evaluation trials thereby saving on time required for these.