Source: News on Air
Context: Ministry of Defence approved Defence Procurement Manual (DPM) 2025, replacing the 2009 manual to accelerate revenue procurement and promote Aatmanirbharta.
About Defence Procurement Manual (DPM) 2025:
What it is?
- A policy document guiding all revenue procurement of goods/services for Armed Forces & MoD organisations, worth ~₹1 lakh crore annually.
- Updated after 16 years to align with public procurement norms, technology adoption, and operational needs of modern warfare.
Aim:
- Streamline & Simplify: Cut red tape, enable faster approvals, and avoid file movement delays.
- Support Industry: Address working capital issues, ease penalties, and provide order assurance.
- Boost R&D & Innovation: Collaborate with IITs, IISc, academia, and industry for indigenisation.
Key Features:
- Ease of Doing Business:
- Removes redundant approvals, ensures timely payment, and promotes transparent, competitive bidding.
- NOC requirement from DPSUs for open tenders dispensed with for level playing field.
- Industry-Friendly Provisions:
- Assured orders up to 5 years (+5 years in special cases) for industry confidence.
- Government to provide technical handholding, equipment sharing for prototype development.
- Relaxed Penalties:
- No Liquidated Damages (LD) during development phase; minimal 0.1% LD post-prototype.
- LD capped at 5% normally (10% only in exceptional, prolonged delays) – incentivises genuine suppliers.
- Decentralised Decision-Making: Empowers Competent Financial Authorities (CFAs) at field level to extend delivery periods, revise bid dates, approve cases without file movement to higher levels.
- Technology & Innovation Push:
- New chapter on Innovation & Indigenisation for in-house design, R&D with academia–industry collaboration.
- Encourages development of import substitutes and local spare part production.
- Collegiate Decision-Making: Strengthens multi-level consultation for fair, transparent, and quicker decision-making process.
- Repair & Maintenance Efficiency: Upfront 15% growth provision in work contracts for aerial & naval platforms to reduce downtime.
- Limited Tendering & Proprietary Procurement:
- Allows limited tenders for goods/services up to ₹50 lakh (higher in special cases).
- Proprietary Article Certificate procurement allowed with parallel efforts to identify alternate sources.
- Government-to-Government (G2G) Procurement: Clear procedure for high-value G2G deals for faster acquisition of critical equipment.
- Alignment with Finance Ministry Guidelines: Fully synchronised with Manual for Procurement of Goods (MoF) ensuring transparency, fairness, and audit compliance.
