In a big development, the government on Monday (25 April) amended the Defence Acquisition Procedure-2020 (DAP-2020) to further promote ‘Make in India’ and ‘Aatmanirbharta’ (self-reliance) in defence and enable Ease of Doing Business.

The DAP-2020 has been amended based on the approvals accorded by Defence Acquisition Council (DAC), according to a Defence Ministry release.

With the amendments in DAP, going forward all modernisation requirements of the defence services and Indian Coast Guard will be indigenously sourced irrespective of the nature of procurement, the ministry said.

However, import of defence equipment and sourcing from foreign industry of capital acquisitions will be the only exception and will be undertaken with specific approval of Defence Acquisition Council and Defence Minister.

Further, as per the advise of the Ministry of Finance and to reduce financial burden on the Indian Defence Industry while maintaining financial safeguards, the requirement of Integrity Pact Bank Guarantee (IPBG) has also been dispensed with and instead, Earnest Money Deposit (EMD) will be taken as a bid security for all acquisition cases with Acceptance of Necessity (AoN) cost more than Rs 100 crore.

According to the ministry, the EMD will be valid for the selected vendor up to signing of contracts and returned to remaining vendors post declaration of selection.

After contract, Integrity Pact will be covered through the Performance Cum Warranty Bank Guarantee (PWBG). Further, as per extant Government of India policy, EMD is not required from Micro and Small Enterprises (MSEs), the ministry said.

Further, to encourage wider participation and broad base indigenous defence manufacturing sector in the country, the total order quantities in acquisition cases will be split between shortlisted vendors, wherever viable.

Moreover, the other technically qualified bidders who have not been awarded contract will be issued a certificate by the services indicating that the product has been successfully trial evaluated, to facilitate vendors to explore other markets.

In a bid to create an ecosystem which fosters innovation and encourages technology development in Defence by engaging R&D institutes, academia, industries, startups and individual innovators, the iDEX framework was launched by Prime Minister Shri Narendra Modi in April 2018.

Existing provisions of DAP 2020 links the procedures of Staff Evaluation, CNC and award of Contract for iDEX procurement, to the procedure in 'Buy (Indian- IDDM)', which entails a long period of approximately two years before placement of the order.

To enable the budding startup talent pool of the country to contribute towards the twin mantras of self-sufficiency and indigenization, the procurement process under iDEX procedure of DAP 2020 has been simplified.

With this simplification, time taken from grant of AoN to signing of contract will be reduced to 22 weeks, the ministry said.

Further, Make-II procedure of DAP-2020, involving indigenisation of defence equipment through industry funded projects at prototype development stage, has been simplified by incorporating Single Stage Composite Trials of prototypes and dispensing off with quantity vetting and scaling for initial procurements in the delegated cases.

Post simplification, the timelines in Make-II procedure will be reduced to 101-109 weeks from an existing total time-period of 122-180 weeks, it said.