The new procurement manual of the Defense Research and Development Organization has raised the advance payment limit to suppliers, has allowed the award of contracts to the second lowest bidder (L2) if L1 (the lowest bidder) withdraws, and it has eliminated the need to provide a performance bench. Guarantees: Key measures that seek to provide a boost to the indigenous defense industry, said DRDO chief G Satheesh Reddy.
Defense Minister Rajnath Singh published the Procurement Manual (PM-2020) on Tuesday that seeks to encourage greater participation from Indian industry, especially emerging companies and micro, small and medium-sized enterprises (MSMEs), to achieve self-sufficiency in the defense sector. the Defense Ministry said in a statement.
Changes to the manual were suggested by a high-powered committee after a one-year study. DRDO’s current industrial base consists of 1,800 MSMEs, defense public sector companies, explosive ordnance factories and large-scale industries.
“DRDO’s new procurement manual will facilitate the indigenous defense industry by streamlining processes and ensuring their participation in design and development activities,” said Singh.
The last major renovation of the manual took place in 2006, with some changes introduced a decade later in 2016. “Some more enabling measures of PM-2020 are the waiver of bid guarantee and performance guarantee of up to ₹ 10 lakh, no trade negotiations ready-to-use items / services (COTS) wherever price is discovered through market forces and the acquisition of development partner stores, ”the ministry said, adding that PM-2020 will facilitate an execution faster R&D projects.
DRDO’s annual budget for procurement, R&D and grants is around 15 billion rupees.
Reddy said the new manual has also streamlined internal processes. “What took six months before will now be accomplished in one month. Acquisitions will move at a faster pace. The lead-time extension process has also been streamlined, and project managers have the power to make quick decisions. ”
He added that PM-2020 has introduced a provision for the leasing of necessary equipment for a short period if it is a better option for a direct purchase.
“In the new PM-2020, the rate of liquidated damages (LD) for development contracts has been reduced,” the statement said. The changes to the procurement manual were suggested by a high-powered committee established in October 2019 and led by CEO (Naval Systems and Materials) Samir V Kamat. The new manual incorporates at least 60 changes, most of them focused on supporting MSMEs.
Raising the vendor / partner prepayment limit is seen by analysts as an important step. Until now, they received only 15% of the cost as an advance, but the new manual has raised it to almost 40%, said the head of DRDO. The decision to order with L2 if L1 backs out will eliminate the need to re-bid that causes delays in procurement, Reddy added.
The co-chair of the IIC’s national council for MSMEs, Ashok Saigal, said MSMEs would benefit significantly from the anticipated increase from 15% to 40%.
“It is an important step, as it will help MSMEs to sustain themselves through the long gestation period of product introduction, qualification and use in commercially significant quantities,” Saigal said. The IIC has around 9,000 members, and MSMEs account for 70% of that number.
In August, DRDO presented a list of 108 systems and subsystems that it would help Indian industry design and develop to strengthen the local defense ecosystem, from mini UAVs to fire detection systems and bulletproof vehicles and transporters. of tanks.
The other items on the list include NBC (nuclear, biological, and chemical) shelters, missile boats, navigation radars, satellite navigation receivers, mine-laying equipment, and armored engineering reconnaissance vehicles.
The government has already announced that it will ban the import of 101 different types of weapons, systems, and ammunition for the next five years, a significant step on the long road to achieving self-sufficiency in the defense sector.
The negative import list included artillery cannons, light military transport aircraft, conventional submarines, and long-range land-attack cruise missiles.
The detailed equipment list published by the Defense Ministry in August also details that the import embargo will take effect between December 2020 and December 2025 for different categories of military hardware.
Military equipment on the negative import list includes assault rifles, sniper rifles, short-range surface-to-air missiles, air-to-air missiles beyond visual range, corvettes, missile destroyers, light combat helicopters, cruise missiles ships, light combat aircraft, a variety of radars and different types of ammunition.
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