Defence ministry approves new framework to streamline revenue procurement

NEW DELHI: Defence Minister Rajnath Singh on Sunday approved the Defence Procurement Manual (DPM) 2025, which aims to streamline, simplify, and rationalise the revenue procurement process in the Ministry of Defence while addressing the evolving needs of the Armed Forces in modern warfare. The new manual aims to achieve self-reliance in fulfilling the needs of the Armed Forces under Revenue Head (Operations & Sustenance Segment). It will foster jointness among the three Services and help in maintaining the highest level of military preparedness through expeditious decision-making. It will ensure the timely availability of requisite resources to the Armed Forces and at an appropriate cost, the Ministry of Defence said in a statement. The DPM 2025 strengthens ease of doing business and seeks to boost Atma Nirbharta's involvement in defence manufacturing and technology. It aims to harness the domestic market's potential, expertise, and capability by encouraging the participation of private players, MSMEs, start-ups, and established Defence Public Sector Undertakings (DPSUs). The manual, last updated in 2009, regulates the procurement of goods and services by the Defence Services and other organisations under the Ministry. It lays down principles and provisions for revenue procurements valued at around Rs 1 lakh crore for the current financial year, while aligning processes with the latest public procurement developments to ensure fairness, transparency, accountability, and technology use. A new chapter has been added to promote self-reliance through innovation and indigenisation, facilitating in-house design and development in collaboration with public and private industries, academia, IITs, IISc and other institutions. Several provisions for development contracts have been relaxed to incentivise new entrants. Provision has been introduced not to levy Liquidity Damages (LD) during the development phase. Minimal LD @ 0.1% will be levied post development of the prototype. The maximum LD to be levied has been lowered to 5%, and in case of inordinate delays only, the maximum LD will be 10%. This will result in incentivising those suppliers who genuinely try to meet the deadline but make the supplies with little delay, the MoD said. The manual also provides guaranteed orders for up to five years, with extensions under special circumstances, along with technical hand-holding support from the Services. Competent Financial Authorities (CFAs) at field levels have been empowered to expedite decisions, avoid unnecessary file movements, and ensure timely payment to suppliers. Other provisions include extending bid opening dates to increase participation, allowing limited tendering for specialised goods up to Rs 50 lakh, streamlining Government-to-Government procurement agreements, and removing the need for No Objection Certificates from some DPSUs before open bidding, ensuring competitive tendering.