Union Government unveiled Defence Procurement Procedure 2016

The Union Defence Minister Manohar Parrikar on 28 March 2016 unveiled the Defence Procurement Procedure 2016 (DPP 2016). It was unveiled on the sidelines of the Defexpo-2016 that was inaugurated by him at Naqueri Quitol in Quepem Taluka, Goa.

The DPP 2016 will replace the Defence Procurement Procedure 2013 (DPP 2013). It will come into force on 1 April 2016.

The key provisions of the DPP 2016 are based on the Dhirendra Singh committee report that was appointed in May 2015 to review the DPP 2013.

Highlights of Defence Procurement Procedure 2016

• Aim: The aim of the DPP is to ensure timely procurement of military equipment, systems, and platforms as required by the armed forces through optimum utilization of allocated budgetary resources.

• Scope: Except for medical equipment, it will cover all capital acquisitions undertaken by the Ministry of Defence, Defence Services and Indian Coast Guard both from indigenous sources and ex-import.

• Capital Acquisitions: Capital Acquisition schemes are broadly classified into 3 categories - Buy, Buy and Make and Make.

• The Buy scheme refers to an outright purchase of equipment and procurements under this scheme are further categorized as Buy (Indian – IDDM), Buy (Indian), and Buy (Global).

• Under the Buy and Make scheme, the procurements are categorized as Buy and Make (Indian) and Buy and Make.

• In decreasing order of priority, the procurement of defence equipment under this procedure are categorized as

1) Buy (Indian – IDDM)

2) Buy (Indian)

3) Buy and Make (Indian)

4) Buy and Make

5) Buy (Global)

• The Make category aims at developing long-term indigenous defence capabilities and procurements under this category would be pursued in isolation, in sequence or in tandem with any of the five categories under Buy or Buy and Make classifications.

• It allows the Defence Acquisition Council (DAC) to take a fast-track route to acquire weapons, which was limited to the armed forces till now.

• The Buy (Indian - Indigenously Designed, Developed and Manufactured or IDDM) category was created to boost indigenous production. For procurements under this category, it is mandatory that 40 percent of the content to be sourced locally.

• This new category was created to promote domestic manufacturing, including government funding for Research & Development and recognition of the Micro, Small and Medium Enterprises in technology development.

• Validity of the Acceptance of Necessity (AoN) has been brought down to six months from the earlier one year. It will help the defence forces to issue tenders faster.

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