(a) whether the Government is considering to change the defence procurement procedure;
(b) if so, the details thereof;
(c) whether the Government has come out with a new defence procurement procedure which will
govern all defence procurements henceforth; and
(d) if so, the details thereof along with the time by which it is likely to be implemented?
MINISTER OF DEFENCE (SHRI A.K. ANTONY)
(a) to (d): A statement is attached.
STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF LOK SABHA UNSTARRED QUESTION NO. 5340 FOR ANSWER ON 29.4.2013
(a) to (d): Yes, Madam. The review of the Defence Procurement Procedure (DPP) which deals with
capital acquisition cases, is a continuous and an ongoing process. Para-76 of DPP-2011 stipulates
review of the procurement procedure to be undertaken by the Defence Procurement Board (DPB) after
every two years. The amendment proposals based on the current review have recently been approved by
the Defence Acquisition Council (DAC). These amendments aim at enhancing indigenization, reducing
processing time and bring further clarity in the capital acquisition process. Some of the salient
features of these amendments are as follows:-
(i) Prioritization of various categories of capital acquisitions under DPP: Preference will now be
given for indigenous production. The Categorization Committees will now follow a preferred order
of categorization beginning with (1)’Buy (Indian)’ followed by (2)’Buy & Make (Indian)’, (3)’Make’
(4)’Buy & Make with Transfer of Technology’ and (5)’Buy (Global)’.
(ii)Finalization of Services Qualitative Requirements (SQRs) before grant of Acceptance of Necessity
(AON) and reducing the time of validity of AON: The proposed amendments now stipulate that the SQR
will be frozen before the AON has been granted. Further, the validity period of AON has also been
reduced from two years to one year. Together, these measures are expected to expedite the acquisition
process and increase transparency.
(iii) Simplification of ‘Buy & make (Indian)’ procedure: The procedure for ‘Buy & Make (Indian)’ cases
has been further simplified. It is expected to result in faster processing of the cases under this category.
(iv) Clear definition of Indigenous Content: The ‘Indigenous Content’ has now been defined in more
specific term providing requisite clarity.
(v) Enhanced delegation of financial powers: The financial powers of the Defence Procurement Board
(DPB) for according AON has been enhanced from the existing `100 crore to `300 crore for capital
acquisition cases. Likewise, the financial powers of the Services Capital Acquisition Plan
Categorization Higher Committee (SCAPCHC) has been enhanced from the existing `50 crore to
`150 crore.
(vi) Advance Consultations for ‘Make’ Procedure: The proposed amendments also mandate advance
consultations with various stakeholders including DRDO and the Indian Industry on the potential
‘Make’ cases. This is expected to improve the participation of the Indian Industry in the ‘Make’
category cases.
(vii) Powers of DAC: Approval of all deviations from the DPP will henceforth be sought from the DAC
instead of the Raksha Mantri.
Efforts are at hand to promulgate the amended DPP within the current quarter of the Financial
Year 2013-14.