NATIONAL CONFERENCE

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NATIONAL CONFERENCE

• PUBLIC PROCUREMENT

INTRICACIES OF PROCUREMENT IN DEFENCE
SERVICES
FRIDAY 10th November 2006
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Directorate General of Aeronautical Quality
Assurance (DGAQA)

• DGAQA is a Govt. Quality Assurance organisation
  for Military Aviation, dealing with
• AERONAUTICS AIR ARMAMENT
• MISSILES GROUND SUPPORT EQUIPMENT
• SUPPORT ROLE IN DEFENCE PROCUREMENT
• HQ is situated at New Delhi, with 34 Field
  Establishments co-located at
• DPSUs PSUs OFs
• ADA DRDO Labs
• Total Technical manpower is 1327 with 350
  officers from various Engineering disciplines
• Value of Aero stores under Quality Assurance
  coverage during the year 2006-07 will be approx.
  Rs. 5500 crores

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CARDINAL PRINCIPLE IN PUBLIC PROCUREMENT

• To procure the material/services of the specified
  quality, at the most competitive prices in a
  fair, just and transparent manner.

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BROAD GUIDELINES IN MAKING PUBLIC PROCUREMENT

• SPECIFICATION IN TERMS OF QUALITY/TYPE
• AVOID INVENTORY CARRYING COST/PURCHASE IN EXCESS
  OF REQUIREMENTS.
• OFFERS TO BE INVITED AS PER DOCUMENTED PROCEDURE
  FOLLOWING A FAIR, REASONABLE AND TRANSPARENT
  POLICY.
• SELECTED OFFER MUST MEET REQUIREMENTS ADEQUATELY
  IN ALL RESPECTS.
• PRICE REASONABLENESS CONSISTENT WITH THE QUALITY
  REQUIREMENTS.
• RECORD AT EACH STAGE OF PROCUREMENT HIGHLIGHTING
  CONSIDERATION THAT WEIGHTED DECISIONS

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DEFENCE PROCUREMENT PROCEDURE 2006(DPP-2006)
Website www.mod.nic.in

• This procedure is meant for capital
  acquisition. In DPP-2006, a procedure for
  development of systems based on indigenous
• R D categorized as MAKE is also put in place
  for increased participation of Indian Industries.
  
• Highlights
• Fast Track Procedure
• Major decisions on procurement to be taken
  simultaneously.
• Enhanced transparency Vendor registration
  through internet for generic requirements of the
  defence services.
• Increased transparency in the conduct of field
  trials.
• Integrity pact.
• Offset obligation.

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DEFENCE PROCUREMENT MANUAL 2006 (DPM-2006)
Website www.mod.nic.in

• This manual covers detailed procedure to be
  followed in the procurement process of revenue
  items.

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• Highlights DPM- 2006
• GFR-2005 provisions incorporated relating to
  limited Tender Enquiry, Cash Purchase Limit,
  Purchases through Proprietary Article
  Certificate, price variation clause and limit for
  advance payment.
• Apportioning quantity to L2 L3 when L1 does not
  have capacity ,as per CVC guidelines.
• Re-floating tenders after reformulating Services
  Quality Requirement for competitive bidding, in
  case of single tender situation after TEC.
• Level playing field to indigenous vendor
  vis-à-vis foreign vendor.
• RATE CONTRACT PROVISION FOR COMMON USER ITEMS.
• Reduction in repeat order quantity from 100 to
  50.

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CVC GUIDELINES

• Guidelines encourage transparency and the culture
  of honesty.
• CVC website www.cvc.nic.in
• Highlights
• Documented Purchase Manual
• Provisioning Guidelines
• Estimate Guidelines (market rate, LPP, economic
  indices, input cost/intrinsic value).
• Mode of Tendering/Period to quote/Bid
  document/Postponement of tender opening.
• Purchase policy/Reasonableness of prices/Advance
  payment/bank Guarantee.
• Post Contract management (amendment/monitoring)

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INTRICACIES OF PROCUREMENT IN DEFENCE SERVICES

• TECHNOLOGY ISSUES
• Poor response/viability in High technology low
  volume cases
• Limited items available in COTS.
• Limited response due to stringent/special
  technical requirements of defence
  specification-cost also increases.
• Non-availability of indigenous technology for
  defence equipment.
• SUPPLY ISSUES
• Fast changes in technology-obsolescence/storage
  life.
• In open TE Cases, assessing capability of large
  number of firms at different locations in short
  time is difficult.
• Limited qualified vendors for specialized items
  for Defence Services.
• POLICY AND DATA ISSUES
• Procurement policy to consider L1.
• Life cycle cost data not available.
• Reliability Data

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REGISTRATION CRITERIAReference document
JSG-015-02

• Design Development Capability.
• Technical Know-how
• Infrastructure Manufacturing facilities Plant
  Machinery-Test facilities.
• Quality System/Practices.
• Accreditations Approvals.
• Financial Capacity.
• Skilled/Technical Manpower Resources.
• Past Supplies performance.

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THANK YOU