Defence acquisition to gather steam

The government has told the Parliamentary Standing Committee on defence that the ministry of defence (MoD) is planning four major changes to its defence procurement procedure which are expected to be finalised at least by the end of this month.

These are — the changes in procedures on handling complaints regarding alleged corruption and other issues, procedure for blacklisting a company that includes adopting a

“nuanced” approach, changes in the offset policy and the “make procedure” wherein there will be massive government funding to a government or private company for manufacture of a defence product along with an assured order to the company to ensure feasibility and commercial viability. The report of the Parliamentary Committee, which mentions the proposed changes, was tabled recently in Parliament.

“The revisions made to the Defence Procurement Procedure (DPP) are in the final stages,” government sources said. Defence secretary R.K. Mathur told the Parliamentary panel, “We keep on getting a large number of complaints, which are signed, unsigned, pseudonymous, anonymous, and so on. And, so far the practice is that these complaints actually stall the process.”

Observers point out that the government may put in place some mechanism to ensure that complaints are not used as a device by rejected vendors to stall the procurement procedure, if there is no prima facie evidence of malpractices in a certain acquisition process.

“The second part would be a procedure for blacklisting a company, a more nuanced approach in blacklisting,” he added.

The third is the offset policy, which is presently not effective.

The fourth part is ‘Make procedure’. About 80 percent of the research funding for the ‘Make’ project would be provided by the government-to-a-government-(owned)-or-private company to develop that product in return for an assured order for a certain period so that it becomes commercially viable for the company to get the benefit from this.