Make in India in defence sector: Centre simplifies procedure to attract greater participation

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New Delhi | Published: January 18, 2018 5:39:47 AM

The decision was announced after the meeting of DAC, chaired by defence minister Nirmala Sitharaman, on Tuesday. The amended ‘Make in India’ procedure reduces the total time from in-principle approval to placing of order by 50 % and the estimated time to finish the whole process has come down to 69 from 103 weeks

Make in India, Defence sector, Centre, make in India projectMake in India in defence sector: Centre simplifies procedure to attract greater participation (Reuters)

In an effort to further boost ‘Make in India’ in the sector, the Defence Acquisition Council (DAC) has cleared a simplified ‘Make-II’ (Make in India) procedure which will enable greater participation of industry in acquisition of defence equipment. The decision was announced after the meeting of DAC, chaired by defence minister Nirmala Sitharaman, on Tuesday. The amended ‘Make in India’ procedure reduces the total time from in-principle approval to placing of order by 50 % and the estimated time to finish the whole process has come down to 69 from 103 weeks. Under the new provisions, projects involving developmental cost of less than 3 crore will be reserved for MSMEs. According to a statement released by the defence ministry, “this process will greatly help import substitution and promote innovative solutions. This simplified ‘Make-II’ procedure will amend the existing ‘Make Procedure’ in Defence Procurement Procedure (DPP)-2016”. The revised procedure has been finalised after a series of consultations held with the industry. The industry can now suggest projects, especially among those items which are currently being imported. Start-ups or individuals can also give proposals. The services headquarters will also list out a series of projects which can be undertaken as ‘Make-II’ projects under the new procedure.

Under the simplified procedure, the potential ‘Make-II’ projects will be approved by a collegiate comprising DRDO, HQ (IDS), and the department of defence under a committee chaired by the secretary (defence production). Based on the in-principle approval given by the committee, the projects will be hosted on the ministry of defence or the department of defence production’s website inviting the industry to participate. Also, now there will be no limit to the number of industries which may respond to the EoI for development of the prototype, subject to meeting the minimum qualification criteria. The design and development time of 12-30 weeks has been granted to the industry to offer the prototypes. There will be no limit to the number of industry players who may show interest and offer prototype, followed by a commercial request for proposal (RFP) to be issued. Once the RFP is issued, it will not be retracted and whoever wins the bid is assured of an order.

DAC has also decided that the services headquarters will constitute a project facilitation team to facilitate the process under this procedure. Even if there is a single entry offering innovative solution, the case will be progressed and retain the title and ownership and all other rights in intellectual property. However, for some specified reasons like national security, the government shall have ‘march-in’ rights. Normally, there shall be no negotiations by Contract Negotiation Committee (CNC) in multi-vendor contracts.

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