The Amended Defence Acquisition Procedure (DAP) comes with a series of new proposals
A detailed chapter on ‘Leasing’ included for maximum utilisation of funds has been introduced
New Delhi: The Ministry of Defence has issued the second draft of Defence Procurement Procedure (DPP) in line with Prime Minster Narendra Modi’s call for Aatmanirbhar Bharat. The amended draft has been issued for the second time after it being released earlier this year in April. The new procedure aims at updating the DPP 2016.
This time the ministry has gone for a change in terminology, with the title of the procedure being changed to Defence Acquisition Procedure (DAP) against the previously-used Defence Procurement Procedure. “Based on inputs received from the environment, DPP-2020 has now been titled as Defence Acquisition Procedure (DAP) 2020,” read the new draft. All the stakeholders have been asked to submit their comments by August 10.
2nd draft DPP: So, what’s new?
In the new proposal, ban on import of certain weapons has been mooted with a view to push for the goal of self-reliance in defence manufacturing. However, the proposed list is yet to be decided and will be notified at a later stage. The draft said, “With a view to promote domestic and indigenous industry as also align the DAP with the reforms enunciated in the Aatmanirbhar Abhiyan (self-reliance campaign), the MoD will notify a list of weapons/platforms banned for import, updated from time to time.”
The amended draft also includes a new procurement category — buy, which envisages global players manufacturing in India. The category calls for foreign vendors to indigenise purchase to the extent of at least 50 percent of the contract value. The category would push foreign vendors to manufacture a larger part of their materials in India. Vendors may achieve the desired level of indigenous manufacturing by either making the entire equipment, spares or undertaking assemblies, sub-assemblies or through the maintenance, repair and overhaul (MRO) facility for the equipment, through its subsidiary in India.
The new procedure has given a larger window for concluding a contract, including the time for trial evaluation, which has been increased from the existing 112-169 days to a period of 122-231 days.
Detailed chapter on leasing
The draft issued in April 2020 had introduced a provision of ‘Leasing,’ which allowed the defence forces to lease the equipment from defence firms or countries rather than purchasing them. And the updated draft carries a detailed chapter on the subject. The argument given by the MoD is that the leasing process would save money by substituting huge capital outlays with periodical rental payments.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)