Defence Minister Rajnath Singh Sunday approved the Defence Procurement Manual (DPM) 2025 — the document governing defence revenue procurements including those for spares and ammunition — which adds a new chapter to promote self-reliance through innovation and indigenisation, among other changes.
Last promulgated in 2009, this manual was under revision in the Ministry in consultation with the Armed Forces and other stakeholders.
The revised DPM aims to further streamline, simplify, enable and rationalise the revenue procurement process. The Defence Acquisition Procedure (DAP) 2020 — which governs all capital procurements – is also being revised to streamline big-ticket defence acquisitions.
“The new manual is aimed at achieving self-reliance in fulfilling the needs of the Armed Forces under Revenue Head (Operations & Sustenance Segment),” the Defence Ministry said in a statement. It added that it will foster jointness among the three Services and help maintain the highest level of military preparedness through expeditious decision-making and ensure the timely availability of requisite resources to the Armed Forces at an appropriate cost.
The new DPM discusses promoting self-reliance through innovation and indigenisation to help in the indigenisation of defence items or spares through in-house designing and development in collaboration with public or private industries, academia, IITs, IISc and other private institutions of repute by utilising the talent of young bright minds.
The new document also addresses the concerns of individuals or companies who want to venture into the defence sector by relaxing many provisions of development contracts. For instance, it makes a provision not to levy Liquidity Damages (LD) during the development phase.
“Minimal LD @ 0.1% will be levied post development of the prototype. The maximum LD to be levied has been lowered to 5%, and in case of inordinate delays only, the maximum LD will be 10%,” the ministry said, adding that this will result in incentivising those suppliers who genuinely try to meet the deadline but make the supplies with little delay.
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A critical provision has also been introduced to provide assured guarantee of orders in terms of quantity, up to five years and beyond that up to another five years in special circumstances.
Another provision has been introduced to provide requisite support through hand-holding by the defence services in terms of sharing of technical know-how, existing equipment, to ensure successful development.
The new document also facilitates and streamlines procurements based on government-to-government agreements through adequate provisions, the defence ministry noted.
“The issues related to level playing field between various players have been addressed by incorporating suitable provisions in the revised manual,” it said, adding that the requirement of obtaining No Objection Certificate from some DPSUs before going for open bidding has been dispensed with and tenders will be awarded purely on competitive basis.
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According to the defence ministry, the ease of doing business has been further strengthened in the document, which aims to boost ‘Atmanirbharta’ in defence manufacturing and technology.
“The objective is to utilise the potential, expertise, and capability of the domestic market in the defence sector by ensuring active participation of private players, MSMEs, start-ups etc. along with the well-established Defence Public Sector Undertakings (DPSUs),” it said.
The DPM lays down the guiding principles and provisions for all revenue procurements in the Ministry valuing around Rs 1 lakh crore for the current financial year.
The statement noted that the revised document will empower the Competent Financial Authorities at field level/lower formations, expedite decision making, avoid movement of files between lower-higher level and ensure timely payment to the suppliers.
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“Competent Financial Authorities (CFAs) have been empowered to take decisions in consultation with their financial advisors in respect of granting extension in delivery period irrespective of quantum of delay without approaching higher authorities,” it said.
It added: “The CFAs have now been delegated power to increase bid opening dates up to a certain limit in case there is lack of participation without referring the matter to their Financial Advisors to increase participation.”
It said Limited Tendering can be resorted to for value up to Rs 50 lakh, and beyond that in exceptional circumstances. “In case of proprietary items, provision for procurement on Propriety Article Certificate basis has been kept subject to parallel efforts for exploring the market for identification of alternative sources,” it added.
