Defence Procurement Procedure 2016 Current Affairs - 2020

Defence Minister launches draft of Defence Procurement Procedure, 2020

On March 20, 2020, the Defence Minister Shri Rajnath Singh launched the draft of new Defence Procurement Procedure. The new procedure aims to increase the indigenous manufacturing.

Highlights

The new procedure aims to increase Indigenous Content ratio. The ratio is the percentage of content of the defence equipment built in India. For instance, the Indigenous Content Ratio of Light Combat Aircraft Tejas is 75.5%.

The procedure also incentivizes raw materials like special alloys and software.

Buy Global

The procedure has introduced “Buy Global” category. Under this category, only minimum necessary is to be bought from abroad.

Key Features of DPP, 2020

The new procedure has introduced Leasing as a new category. This is to replace huge initial payments with periodical rental payments. A new system has been introduced for software procurement. This is because, software gets updated at faster rates out of all other technologies.

What is Defence Procurement Procedure?

The Defence Procurement Procedure is the process that is followed to simplify procurement of defence equipment.

New Committee to review Defence Procurement Procedure to strengthen ‘Make in India’

Rajnath Singh, Union Minister of Defence has approved setting up of a Committee to review Defence Procurement Procedure (DPP) 2016 and Defence Procurement Manual (DPM) 2009 as DPP 2016 and DPM 2009 have been due for revision for a while.

Key Highlights about Committee

The 12-member committee will be set up under Chairmanship of Director General (Acquisition). Apart from DG (Acq) the 11 other members who part of this high-level committee should not be below rank of Joint Secretary or Major General equivalent.

Committee will revise and align procedures with aim of ensuring seamless flow from asset acquisition to life cycle support. Aligning procedures will not only ensure seamless flow from asset acquisition to life cycle support but also strengthen Make in India initiative of Government of India.

Term: It has 6 months to submit its recommendations.

Terms of reference of Committee
  • To revise procedures as given in DPP 2016 and DPM 2009 for removing procedural bottlenecks and hasten defence acquisition.
  • To align and standardise provisions in DPP 2016 and DPM 2009 (wherever applicable), for optimising life cycle support for equipment.
  • To simplify policy and procedures for facilitating greater participation of Indian Industry and develop robust Defence Industrial base.
  • Wherever applicable, examine and incorporate new concepts, for instance life cycle costing, performance based logistics, life cycle support, codification & standardisation, lease contracting and Information and Communication Technology (ICT).
  • Include provisions to promote Indian start-ups and research & development (R&D).
  • Any other aspect which will contribute towards refining acquisition process and support the Make in India initiative.