Defence Acquisition Procedure – 2020 released

Defence Acquisition Procedure – 2020 released

Part of: GS Prelims and GS-III – Defence; Security

In news

• Union Defence Minister unveiled the Defence Acquisition Procedure (DAP) – 2020 recently.
• DAP 2020 will be applicable with effect from 01 October 2020. 
• The first Defence Procurement Procedure (DPP) was promulgated in 2002 and has since been revised periodically.

Key takeaways

• The New Category of Buy (Global – Manufacture in India) incorporates ‘manufacture of either the entire/part of the equipment or Maintenance, Repair and Overhaul (MRO) facility for the equipment, through its subsidiary in India.
• The categories of Buy(Indian-IDDM), Make I, Make II, Production Agency in Design & Development, OFB/DPSU and SP model will be exclusively reserved for Indian Vendors meeting the criteria of Ownership and Control by resident Indian Citizens with FDI not more than 49%.
• A simple and practical verification process has been instituted and Indigenous Content (IC) will now be calculated on ‘Base Contract Price’.
• Provision for exploring options for operating base applications like Fire Control  System,  Radars,  Encryption, Communications etc. on indigenous software in Buy (Indian- IDDM) & Buy (Indian) cases has been included.
• A separate dedicated chapter has been incorporated in the DAP 2020 for acquisition of systems Designed and Developed by DRDO/DPSUs/OFB.
• The Offset guidelines have been revised, wherein preference will be given to manufacture of complete defence products over components and various multipliers have been added to give incentivisation in discharge of Offsets.