Context:

The Ministry of Defence recently approved the Defence Procurement Manual (DPM) 2025, a significant overhaul of the 2009 manual. This updated framework aims to streamline the procurement process for the Armed Forces, ensuring timely, efficient, and cost-effective acquisition of necessary resources.

Key objectives of DPM 2025:

• Streamline and rationalise the procurement process to meet the evolving needs of the Armed Forces.
• Promote Aatmanirbhar Bharat by encouraging domestic industries, including MSMEs and start-ups, to participate in defence manufacturing.
• Improve the efficiency of procurement, ensuring timely availability of resources at appropriate costs.
• Foster jointness among the Army, Navy, and Air Force to enhance military preparedness.

Key Features of Defence Procurement Manual (DPM) 2025:

  Relaxation of Development Contracts:

·         Liquidity Damages (LD) will not be levied during the development phase.

·         Minimal LD (0.1%) applied post-prototype development, with a maximum of 5% LD and up to 10% in case of significant delays.

  Assured Orders and Handholding Support:

·         Assured guarantee of orders for up to five years, extendable in special cases.

·         Services to provide support like technical knowhow and existing equipment to ensure successful development.

Empowerment of Competent Financial Authorities (CFAs):

·         CFAs empowered to make decisions at the field level without referring matters to higher authorities.

·         Faster decision-making and reduced delays, including for delivery extensions and bid date changes.

  Support for Repair/Refit Activities:

·         15% growth provision for repair/refit/maintenance activities of aerial and naval platforms to minimize downtime.

Limited Tendering and Proprietary Items:

·         Limited Tendering for specialized items up to Rs 50 lakh, and beyond that in exceptional cases.

·         Proprietary items can be procured with a Propriety Article Certificate, provided market exploration for alternatives is also conducted.

Government-to-Government Agreements:

·         Streamlined procedure for high-value procurements based on such agreements.

Level Playing Field and Competitive Bidding:

·         No Objection Certificate from DPSUs no longer required for open bidding.

·         Tenders will be awarded purely on a competitive basis to ensure a level playing field among participants.

Impact on the Defence Industry:

The DPM 2025 is expected to transform India’s defence procurement landscape. It simplifies processes, encourages private sector participation, and provides clear guidelines. This will boost the competitiveness of Indian industries, enhance the quality of products for the Armed Forces, and ensure timely availability of resources.

About the Defence Acquisition Council (DAC):

The DAC is the highest decision-making body for defence procurement in India. Established in 2001 post-Kargil War, its primary function is to ensure the expeditious and efficient procurement of defence resources within the allocated budget and time frame. The DAC is chaired by the Defence Minister and includes key defence and financial officials.

Conclusion:

The approval of DPM 2025 represents a crucial step towards achieving self-reliance in India’s defence sector. By promoting innovation, simplifying procurement, and supporting domestic industries, India is set to build a self-sustaining and competitive defence industry, ensuring enhanced military readiness and technological advancements in the future.