Prelims: Current events of national and international importance | Defence
Why in news?
The Defence Minister approved the Defence Procurement Manual (DPM) 2025, the document governing defence revenue procurements.
DPM, 2025– It lays down the guiding principles and provisions for all revenue procurements in the Defence Ministry valued around Rs.1 lakh crore for the current fiscal.
Aim -
To streamline, simplify and rationalize the revenue procurement process for the armed forces.
Achieving self-reliance in fulfilling the needs of the armed forces under the revenue head (operations and sustenance segment).
DPM was last promulgated in 2009, updated after 16 years.
Changes from the Previous Manual
Dispensing with NOCs - The requirement for a No Objection Certificate (NOC) from Public Sector Undertakings (PSUs) for open tenders has been removed to create a more competitive environment.
Government Support -The government will now provide more direct support to industry, including technical assistance and equipment sharing to facilitate prototype development.
Key Provisions -
Focus on Modern Warfare - The manual incorporates the latest technological advancements and addresses the operational needs of modern warfare.
Support for Industry - It provides industry-friendly provisions, including assured orders for up to 5 years, technical handholding, equipment sharing, and a reduction in penalties for delays, especially in R&D.
Promoting Indigenization - Supports the "Aatmanirbhar Bharat" (self-reliant India) initiative by encouraging R&D and collaboration with institutions like IITs and IISc for indigenization.
Ease of Doing Business -It removes redundant approvals and ensures transparent, competitive bidding, creating a level playing field for all suppliers.
Timely Payments - The manual emphasizes ensuring timely payment to vendors, which helps with managing working capital.
Incentivizing the suppliers -By relaxing the Liquidity Damages (LD) provision - not to levy LD during the development phase, but levied in the post development phase (Minimum LD of 0.1% and maximum LD 5%).
