Defence Procurement Procedure [DPP]

By : Neha Dhyani

Updated : Apr 5, 2022, 12:55

The Defence Procurement Procedure (DPP) was first initiated in 2002 to procure military hardware for the country's Armed Forces smoothly, systematically, and time-bound. Later in 2016, it was revised to facilitate the vision of Make in India in the defence sector. Since its inception, the DPP has been periodically revised to encourage the efforts of Aatmanirbhar Bharat Abhiyaan and promote self-reliance and growth of domestic defence manufacturing.

On 28 September 2020, Defence Minister Rajnath Singh released the Defence Acquisition Procedure (DAP), erstwhile known as the Defence Procurement Procedure.

Let's look at some of the significant reforms introduced in the latest Defence Procurement Procedure

Salient features of the Defence Procurement Procedure

The latest revision of the Defence Procurement Procedure - the DAP 2020 aligns with the vision of Aatmanirbhar Bharat Abhiyaan, emphasizing indigenous design, development, and manufacturing of weapon systems to help India move forward in its quest for self-reliance. Some of its salient features are -

1. Reservation in Categories for Indian Vendors

The reservation creates exclusivity in vendor participation in the domestic Indian industry. As such, categories like Buy(Indian-IDDM), Make I, Make II, and Production Agency in Design &Development, among others, were created and reserved exclusively for Indian Vendors.

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2. Enhancement of Indigenous Content

Compared to Defence Procurement Procedure 2016, the Defence Acquisition Procedure 2020 enhances the making of indigenous military material and military software as follows

Sr No

Category

DPP 2016

DAP 2020

(i)

Buy (Indian-IDDM)

Min 40%

Min 50%

ii)

Buy (Indian)

Min 40%

Indigenous design Min 50%

Otherwise Min 60%

(iii)

Buy & Make (Indian)

Min 50% of Make

Min 50% of Make

(iv)

Buy (Global Manufacturer in India)

-

Min 50% of Buy plus Make

(v)

Buy (Global)

-

Min 30% for Indian vendors

3. Rationalisation of Trial and Testing Procedures

Under this, reforms were made based on testing equipment, the scope of trials, duplication of trials, creation of a requisite opportunity for participating vendors, new inspection rules on acceptance of equipment, etc.

4. Introduction of Make & Innovation categories

New make' categories for indigenous design and development of weapons and equipment were introduced. These include -

  • Make I which is government-funded up to 70%
  • Make II which is industry-funded
  • Make III which refers to an indigenously manufactured category of weapons and equipment

5. Design & Development Reforms

The DAP 2020 introduced a separate chapter focusing on acquiring systems designed and developed by DRDO/DPSUs/OFB, etc.

6. Dissolution of Voids

Existing voids from the previous Defence Procurement Procedure were addressed. Some of these include issues and void on Information Communication Technology equipment, among others.

7. Initiation of Industry Friendly Commerical Terms

Reforms were made in favour of the vendors. As such, the price variation clause was introduced for protracted and large contracts, and payment to vendors was streamlined through provisions like parallel processing documents, digital verification, etc.

8. Revision of offset guidelines

Lastly, the offset guidelines were revised, focusing primarily on manufacturing defence products.

The improved features of the defence acquisition procedure 2020 established enhanced transparency and encouraged fair competition in the sector. Apart from aligning with the vision of Atmanirbhar Bharat and providing new impetus to Make in India', the document of DAP 2020 instilled confidence, protecting the interests of stakeholders and domestic manufacturers. Furthermore, it encouraged foreign investment in the country.

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FAQs on Defence Procurement Procedure [DPP]

Q.1. What is the main purpose of the Defence Procurement Procedure?

The Defence Procurement Procedure was initiated to streamline the timely procurement of military equipment, weapons, and other systems and platforms required by the Indian Armed Forces.

Q.2. When was the Defence Procurement Procedure promulgated?

The Defence Procurement Procedure was first initiated in 2002.

Q.3. When was the Defence Procurement Procedure reformed?

The Defence Procurement Procedure has been periodically revised. The latest reforms were undertaken in 2020.

Q.4. Is the Defence Procurement Procedure and the Defence acquisition procedure the same?

Yes. The former name of the Defence Acquisition Procedure, which was unveiled by Defence Minister Rajnath Singh in September 2020, is Defence Procurement Procedure (DPP 2002).