Defence Acquisition Procedure 2020

In News

• The government amended the Defence Acquisition Procedure 2020 in order to promote “Make in India” in military procurement.

Key highlights of the amendment

• Indigenously sourced:
  • All modernisation requirements of the defence services and Indian Coast Guard are to be indigenously sourced irrespective of the nature of the procurement.
• Import from foreign industry would be an exception:
  • Import of defence equipment and sourcing it from the foreign industry under capital acquisitions should only be an exception and undertaken with specific approval of the defence acquisition council or the defence minister.
• Earnest Money Deposit [EMD]:
  • It will be taken as a bid security for all acquisition cases with Acceptance of Necessity [AoN] cost more than Rs 100 crore.
  • EMD will be valid for the selected vendor up to the signing of contracts and returned to remaining vendors post declaration of selection.
  • EMD is not required from Micro and Small Enterprises [MSEs].
• Acquisition cases are to be split:
  • To encourage wider participation and a broad base of indigenous defence manufacturing sector in the country, the total order quantities in acquisition cases are to be split between shortlisted vendors.
• Certification 
  • The other technically qualified bidders who have not been awarded a contract will be issued a certificate by the services indicating that the product has been successfully trial evaluated, to facilitate vendors to explore other markets.
• iDEX framework
  • The defence ministry also decided to cut waiting time for projects under the iDEX framework.
  • The iDEX programme was launched in 2018 as an ecosystem to foster innovation and technology development in the defence and aerospace sectors by engaging innovators and entrepreneurs.
• Start-up talent pool
  • To enable the budding start-up talent pool of the country to contribute towards the twin mantras of self-sufficiency and indigenisation, the procurement process under the iDEX procedure of DAP [Defence Acquisition Procedure] 2020 has been simplified.
  • With this simplification, time taken from grant of AoN to signing of the contract will be reduced to 22 weeks.
• Make-II procedure of DAP-2020
  • Involving indigenisation of defence equipment through industry-funded projects at the prototype development stage has been simplified by incorporating single-stage composite trials of prototypes and dispensing off with quantity vetting and scaling for initial procurements.
  • Post simplification, the timelines in the Make-II procedure will be reduced to 101-109 weeks from an existing total time period of 122-180 weeks

Significance

• Make in India initiative: It is expected to strengthen the Make in India initiative in the defence sector, and will help in reducing the financial burden on the domestic defence industry.
• Wider exposure: To encourage wider exposure to indigenous defence manufacturing sector.
• Development of Industry: The indigenous development of these projects will help harness the design capabilities of the domestic defence industry.
• Global Footing: Such developments will position India as a design leader in these technologies.
• Serving the needs of armed forces: The list of ‘Make-II’ projects is dynamic in nature and the projects which are relevant to the requirements of Indian Armed forces.
• Greater Efficiency: It will accord greater efficiency in attaining operational preparedness of the Defence Services. 
• More Employment: This will give a chance to employing more people in India and thereby increasing the Growth parameters of the Economy.

Source: PIB