Defence Minister Releases DRDO’s New Procurement Manual

To encourage Indian industry, including Start-ups and MSMEs in Defence Research & Development to achieve ‘Atmanirbhar Bharat’, Defence Minister Rajnath Singh released the new version of Defence Research and Development Organisation Procurement Manual 2020 (PM-2020) .

The PM-2020, will facilitate faster execution of R&D projects and programmes. The modified features in the manual will go a long way to facilitate participation of industry in various R&D projects.

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.

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 are other features.

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. The previous Procurement Manual of DRDO was last modified in 2016.

Speaking on the occasion, Rajnath Singh said, “The new DRDO Procurement Manual will facilitate the indigenous Defence Industry by simplifying the processes and ensure their participation in design and development activities. The PM-2020 will help towards realising Prime Minister Narendra Modi’s dream of ‘Atmanirbhar Bharat’.”

Secretary Department of Defence Research & Development and Chairman DRDO Dr G Satheesh Reddy, Secretary (Defence Finance) SmtGargi Kaul and other senior officials of Ministry of Defence participated in the event.

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