Defense Acquisition Procedure 2020 [UPSC Notes]

The Defense Acquisition Procedure (DAP) 2020 has been amended recently. Amendments were made in light of the Defense Acquisition Council’s (DAC) recommendations in order to further encourage “Make in India” and “Aatmanirbharta” in the defense industry and facilitate Ease of Doing Business.

The topics involving the indigenisation of defense technology, government initiatives and security challenges are important from the GS2 and GS3 perspectives of the UPSC mains exam.

Defense Acquisition Procedure (DAP)

The Defense Procurement Procedure (DAP) seeks to assure the timely acquisition of military platforms, systems, and equipment that meet the performance, capability, and quality criteria required by the Indian Armed Forces.

• The DAP covers all Capital Acquisitions other than Works and Land undertaken by the Ministry of Defense (MoD) and Service Headquarters (SHQ) both from indigenous sources and ex-import, except for medical equipment.

Defense Acquisition Procedure 2020 Amendment

• In the future, regardless of the nature of the procurement, all modernization needs for the Defense Services and Indian Coast Guard to be indigenously sourced.
  • Capital acquisitions from foreign companies or the import of defense-related equipment should only be an exception and undertaken with specific approval of DAC/Raksha Mantri.
• The amended DAP has also dispensed with the requirement for an Integrity Pact Bank Guarantee (IPBG).
  • The requirement for the Integrity Pact Bank Guarantee (IPBG) has been waived, as recommended by the Ministry of Finance, in order to lessen the financial burden on the Indian Defense industry while ensuring financial safeguards.
  • Instead, all purchase cases with Acceptance of Necessity (AoN) costs greater than Rs 100 crore will require Earnest Money Deposit (EMD) as a bid security.
  • EMD will be valid for the chosen vendor up until the signing of contracts and returned to the remaining vendors following the declaration of selection.
  • The Integrity Pact will be covered by the Performance Cum Warranty Bank Guarantee (PWBG) following the deal.
  • Furthermore, EMD is not necessary for Micro and Small Enterprises (MSEs), according to the current Government of India policy.
• Wherever possible, the total order quantities in acquisition cases are to be split among shortlisted vendors in order to encourage wider involvement and a broad foundation of indigenous defense manufacturing in the nation.
  • A certificate from the Services stating that the product has undergone a successful trial evaluation will also be given to the other technically eligible bidders who were not given contracts, allowing vendors to explore additional markets.
• The procurement process under the iDEX method of DAP 2020 has been streamlined to enable the nation’s burgeoning startup talent pool to contribute to the twin mantras of self-sufficiency and indigenization.
  • With this simplification, the amount of time needed to go from granting an AoN to signing a contract will decrease from two years to just 22 weeks.
• By incorporating Single Stage Composite Trials of prototypes and doing away with quantity vetting and scaling for initial procurements in the delegated cases, the Make-II procedure of DAP-2020 has been made simpler.
  • After simplification, the timelines for the Make-II procedure will be reduced from the current total time period of 122-180 weeks to 101-109 weeks.

Defence Acquisition Procedure, 2020 (DAP):- Download PDF Here