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Post at: Jun 03 2022

Defence Acquisition Procedure 2020 Amendment

Why in News?

  • On March 22, 2022 Defence Acquisition Council (DAC) chaired by Defence Minister Rajnath Singh has announced the amendment in Defence Acquisition Procedure (DAP) 2020. These amendments have been approved on 25 April 2022 by DAC and incorporated formally.

Aim 

  • To promote the drive for 'Make in India’ and 'Aatmanirbharta'  in arms production and  enable Ease of Doing Business on the industry.

Defence Acquisition Procedure (DAP) 2020 Amendment

  • Going forward all modernisation requirements of the three Services and Indian Coast Guard will be indigenously sourced irrespective of nature of procurement.
  • Import of defence equipment/sourcing from Foreign Industry of capital acquisitions should only be an exception and undertaken with specific approval of DAC/Defence Minister.
  • To reduce financial burden on the Indian Defence Industry whilst maintaining financial safeguards, requirement of Integrity Pact Bank Guarantee (IPBG) has been dispensed with.
  • Earnest Money Deposit (EMD) 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 signing of contracts and returned to remaining vendors post declaration of selection.
  • Post contract, Integrity Pact will be covered through the Performance Cum Warranty Bank Guarantee (PWBG). Further, as per extant Government of India policy, EMD is not required from Micro and Small Enterprises (MSEs).
  • The total order quantities in acquisition cases are to be split between shortlisted vendors, wherever viable.
  • The other technically qualified bidders who have not been awarded 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.

Significance

  • It will encourage wider participation and broad base indigenous defence manufacturing sector in the country.
  • It will create an ecosystem which fosters innovation and encourages technology development in Defence by engaging R&D institutes, academia, industries, startups and individual innovators.
  • As advised by Ministry of Finance, it will also reduce financial burden on the Indian Defence Industry through MAKE initiative.

Conclusion

  • Self-reliance and indigenisation in defence is important for both strategic and economic reasons and has, therefore, been an important guiding principle for the government.The government is considering their importance for the industrial and technological development in the defence sector thus will make it possible the Make in india a great success.


 


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