Defence Minister Rajnath Singh approves new DRDO Procurement Manual

Defence Minister Rajnath Singh

New Delhi (NVI): Defence Minister Rajnath Singh today approved a new DRDO Procurement Manual (PM-2020) to facilitate the indigenous defence industry by simplifying the processes and ensuring their participation in design and development activities.

“Raksha Mantri Shri @rajnathsingh has approved a new @DRDO_India Procurement Manual (PM-2020) to encourage more participation of the Indian Industry including startups and MSMEs in Research & Development activity and also to achieve the goal of self reliance in Defence,” the Defence Minister’s Office said in a tweet.

PM-2020 will help towards realising Prime Minister Narendra Modi’s dream of ‘Atmanirbhar Bharat’ (self-reliant India), Rajanath said in a tweet after the approval.

He also appreciated the contribution of all the officials of DRDO and Finance wing in the Ministry of Defence for their contribution in bringing out the revised PM-2020.

“The PM-2020, will facilitate faster execution of R&D projects/programmes. The modified features the Manual will go a long way to facilitate participation of industry in various R&D projects,” the Ministry of Defence said in a statement.

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, which will assist the industry for the speedy execution of projects, MoD said.

Some more enabling measures of PM-2020 are exemption of bid security and performance security up to Rs 10 lakh, 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) are other 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. It may be noted that the previous Procurement Manual of DRDO was last modified in 2016, the Ministry said.

Those present on the occasion included Secretary Department of Defence Research & Development and Chairman DRDO Dr G Satheesh Reddy, Secretary (Defence Finance) SmtGargi Kauland other senior officials of Ministry of Defence.

The Defence Ministry and its top research and development arm DRDO have been working on a war footing for indigenous development of defence systems, especially amid tensions with China.