Rajnath Singh said DAP was aligned with government’s ‘Aatmanirbhar Bharat’ vision
New Delhi:
In a major move, India removed compensation requirements for government-to-government defense agreements and sole-source contracts as part of a new policy unveiled on Monday for purchasing weapons and platforms. military forms for the armed forces, officials said.
The Defense Procurement Procedure (DAP) issued by Defense Minister Rajnath Singh provides for allowing the three forces to lease military equipment, equipment and platforms such as helicopters, simulators and aircraft. transport according to operational needs, as this could be a cheaper option than acquiring them. , officials said.
The decision to remove the compensation requirements for government-to-government agreements, sole-source contracts and acquisitions under intergovernmental pacts came days after the Comptroller and Auditor General (CAG) harshly criticized the government in due to the poor implementation of the compensation policy.
As part of the compensation policy, foreign defense entities, for all contracts worth over Rs300, have been mandated to spend at least 30% of the total market value in India by purchasing components, by transferring technologies or setting up research and development activities. facilities.
The CAG specifically mentioned the Rs 59,000 crore Rafale deal, and said aircraft maker Dassault Aviation and arms supplier MBDA had yet to meet their compensation obligations to offer high tech to India. The compensation component in the agreement was 50 percent.
“Offsets will not be applicable in sole-source, government-to-government and IGA (inter-government agreement) agreements in accordance with DAP 2020,” said Apurva Chandra, director general of procurement at the Ministry of Defense, adding that the compensation policy will remain in effect. forced contracts involving a call for tenders.
“No compensation contract has led to a transfer of technology,” he said, indicating that this could be the reason behind the government’s decision.
Another official said removing the clearing obligations for contracts falling under all three categories would likely lead to a reduction in the cost of acquisitions, as defense companies used to factor in the funds needed to meet clearing conditions. .
The DAP, released after more than a year of consultation with relevant stakeholders, includes a number of steps aimed at making India a global military platform manufacturing center, reducing procurement times defense equipment and enable the purchase of essential items by the three services through the investment budget under a simplified mechanism.
The first defense procurement process was launched in 2002 and since then it has been revised periodically to give a boost to the growing domestic industry. The DAP will come into effect on October 1.
The DAP also includes new chapters on information and communication technologies, post-contract management, procurement of systems developed by state-run defense entities like DRDO and public sector companies. Defense (DPSU), they said.
In what is considered an important step, the DAP has presented measures to reduce delays in the acquisition of essential items by the three services, as it has proposed a new provision to acquire them through the budget of investment according to a simplified and time-limited procedure.
The defense minister said the DAP also included provisions to encourage foreign direct investment (FDI) to establish manufacturing centers for both import substitution and exports while protecting the interests of the Indian national industry.
“The compensation guidelines have also been revised, in which preference will be given to manufacturing complete defense products over components and various multipliers have been added to incentivize the discharge of offsets,” the defense minister tweeted. .
Happy to unveil today the new Defense Acquisition Procedure (DAP) -2020 document. The formulation of the DAP 2020 was made after incorporating comments and suggestions from a wide range of stakeholders. pic.twitter.com/quRiyAKY3W
– Rajnath Singh (@rajnathsingh) September 28, 2020
He said the DAP was aligned with the government’s vision ”Aatmanirbhar Bharat(Autonomous India) and to empower Indian national industry through ‘Make in India’ projects with the ultimate goal of transforming the country into a global manufacturing hub.
The policy also provides for a one-step AoN (Acceptance of Necessity) agreement in all cases up to Rs 500 crore to reduce delays in the approval of acquisition proposals.
The DAP also spoke of measures to reform the pre-induction tests of defense equipment.
“The scope of testing will be limited to the physical evaluation of basic operational parameters. Other parameters can be evaluated based on supplier certification, certification by accredited laboratories, computer simulations of parameters, etc. “, did he declare.
