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DRDO's new Procurement Manual aims at industry participation in Military Products Development

The vision of Defence Research & Development Organisation (DRDO) is to empower India with cutting edge defence technologies. Its mission is to facilitate achievement of self-reliance in critical technologies, while equipping the Armed Forces with state-of- the-art equipment, weapon systems and platforms developed in partnership with the industry, academia and other R&D institutions.

DRDO was set up in 1958 with only ten laboratories and has grown manifold and emerged today as a core defence research organisation with a large network of laboratories and establishments spread across the country. It has completed many major projects relating to development of strategic & tactical military hardware and related technologies successfully, which has led DRDO to win national and global recognition.

The defence research agency, has released its procurement manual for 2020 that is aimed at increasing the scope of participation of local industry in military products development. Defence Research and Development Organisation‘s (DRDO’s) Procurement Manual 2020 (PM-2020), was released to the public on 24 Oct.

The latest procurement manual is expected to encourage more participation of the Indian industry, including Startups and Micro, Small and Medium Enterprises (MSMEs) in Defence Research and Development (R&D) for achieving ‘Atmanirbhar Bharat‘, according to a Ministry of Defence statement

“The new DRDO Procurement Manual will facilitate the indigenous defence Industry by simplifying the processes and ensure their participation in design and development activities."

New features of the PM-2020

· Bid security declaration option for earnest money deposit.

· Increase of threshold limit for advance payment.

· Placement of order on lowest bidder 2 (L2) in case L1 backs out are some of the salient features of the new manual. This will assist the industry for early execution of projects.

· Exemption of bid security and performance security up to INR 10,00,000 (INR One Million/USD13,544).

· No negotiations for commercial off-the-shelf (COTS) items/services wherever price discovery is happening through market forces.

· Performance security for ‘service contracts’ is linked to the payment cycle instead of total contract value.

· Procurement of stores from development partners.

· Safeguarding of free issue material through insurance cover instead of bank guarantee (BG) as a facilitating measures adopted to help the industry.

· In the new PM-2020, the liquidated damage (LD) rate for development contracts has been reduced.

· The delivery period (DP) extension process has been simplified for faster decision making. Many of the internal procedures have been further simplified for faster engagement with industry.

· DRDO’s Procurement Manual was last modified in 2016.

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