Defence procurement procedure: MoD to release new system by March

The Ministry of Defence (MoD), which has been criticised for its cumbersome and slow procurement, is evolving reformed procedures to make defence tendering and contracting simple, flexible and quick.

The MoD’s procurement head, Apurva Chandra, told an aerospace industry gathering in New Delhi on Thursday: “An empowered committee has been instituted to review the Defence Procurement Procedure (DPP 2016) and the Defence Procurement Manual (DPM 2009) [and] to release revised versions of both documents by March 2020.”

The DPP stipulates the procedure for buying weapons and equipment from the defence capital budget, whereas the DPM governs acquisitions from the defence revenue budget. The former is regarded as the procedure for “equipment modernisation”, while the latter is the procedure for “running expenses”.

DPP 2020 will be the eighth revision of a procurement procedure that was first formalised in 2002. Successive defence ministers, most recently Manohar Parrikar, vowed to make it shorter and more flexible. However, the DPP has only grown wordier and more process-oriented, rather than outcome-oriented.

Chandra stated that he was chairing the empowered committee in his capacity as Director General (Acquisitions). Under him, there would be three specialised subcommittees for reviewing various aspects of the DPP. The “Subcommittee on Air Systems”, chaired by the Indian Air Force (IAF) deputy chief, Air Marshal V R Chaudhari, would evolve a better procedure for purchasing aircraft.

The Subcommittee on Trial and Testing, chaired by Air Marshal Rajeev Sachdeva, would simplify and improve the processes of equipment trials, which have often taken years to conclude.

The third subcommittee, chaired by Chandra himself, would integrate all acquisition processes such as Make-1, Make-2, iDEX and procurements from the Technology Development Fund into a unified, common procedure.

Chandra also said his subcommittee would consider including a separate chapter for information and communication technology projects in the revised DPP. 

“The subcommittees will be inviting industry to deliberate and seek their inputs to formalise the DPP and DPM.  A draft DPM has already been shared with industry for their feedback,” stated the Confederation of Indian Industry, which organised the aerospace seminar. 

The Director General (Acquisitions) also revealed that some important contracts would fructify in the next few months. This includes a Rs 5,500-crore contract for the indigenous Akash air defence missile, which Bharat Electronics is building.  In addition, the MoD’s negotiating committee for buying 83 Tejas fighters from Hindustan Aeronautics (HAL) has finalised the per aircraft price two days ago. Negotiations are now centred on the cost of “lifecycle support” for these aircraft. The contract is likely to be signed in the next three-to-four months, said Chandra. 

Meanwhile, negotiations with HAL for procuring the Light Combat Helicopter are making progress and a contract could be three-four months away, he said.