GOVERNMENT OF INDIA MINISTRY OF DEFENCE

1 GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEFENCE PROCUREMENT MANUAL 2021 (Revenue Procurement) DRAFT DPM 2021 - CHAPTERS01 MAR 21 DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEFENCE PROCUREMENT MANUAL 2021 (DPM 2021) (Revenue Procurement) DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFTDPM 2021 DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT MINISTER OF DEFENCE FOREWORD Revenue Procurement in the DEFENCE Services is undertaken for provisioning goods, services and support activities so as to maintain their combat readiness and sustenance.

2 The Procurement procedures are aimed at ensuring objective and fair dealings as also observing highest standards of probity and financial prudence. DEFENCE Services have huge capacity for consumption and offer an attractive market to the industry , MSMEs and budding start-ups. There have been a number of changes in the operating philosophies, threat perception and economic policies since the issue of the last version of the procurement manual in 2009. The manual has been revised to meet unique requirements of the DEFENCE Services whilst remaining within the overall framework of the procedures and policies of the GOVERNMENT of INDIA . Revision of the document has been possible due to unrelenting efforts of the MINISTRY of DEFENCE and the Headquarters Integrated DEFENCE Staff with due participation of all stakeholders.

3 The document has been cast after suitably addressing all the issues faced by the users with an aim to bring in transparency, accountability and clarity in procurement procedures. It has been aligned with the Aatma Nirbhar Bharat Abhiyan, promoting indigenisation and facilitating preferential treatment to local firms with due emphasis on e-Procurement, removing procedural delays, promoting healthy competition and efficiency in DEFENCE Revenue procurement. DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT I firmly believe that the revised Revenue Procurement procedures, will meet the broader objectives of enabling Make In INDIA , enhancing ease of doing business and boosting economic growth.

4 Jai Hind New Delhi Date : Feb 21 (Rajnath Singh) DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFTDPM 2021 P a g e| (i) INDEX Ser Heading Pages 1 Foreword - 2 Index (i) - (ii) 3 Abbreviations and Acronyms (iii) - (vi) 4 Record of Amendments (vii) - (viii) Chapters 1 Introduction 1 - 10 2 Procurement Objective and Policy 11 - 24 3 Sourcing and Quality 25 - 36 4 Approval Process 37 - 46 5 Tendering and Evaluation 47 - 92 6 Contract and its Conditions 93 - 124 7 Procurement of Goods and Services from Foreign Countries and Standard Conditions of Contracts 125 - 140 8 Rate Contract 141 - 148 9 Repair and Maintenance Contracts with Foreign and Indigenous Firms 149 - 154 10 Indigenous Design, Development, Fabrication, Upgradation and Product Improvement Contracts 155 - 178 11 Information and Communication Technology (ICT)

5 Procurement 179 - 188 12 Procurement of Consultancy Services 189 - 196 13 Outsourcing of Non-Consultancy Services 197 - 204 14 Offloading of Partial/ Complete Refits/ Repairs of Ships/ Submarines/ Craft/ Assets to Indian PSU/ Private Shipyards/ Trade 205 - 214 15 Banking Instruments 215 - 224 DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT(ii ) | P a g e DPM 2021 DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT ABW Army Base Workshop ACL Annual Consumption Limit AD Acknowledgement Due Addl Additional ADG Assistant Director General AFMS Armed Forces Medical Services AFSQR Air Force Staff Qualitative Requirements AHSP Authority Holding Sealed Particulars AIP Approval In Principle AMC Annual Maintenance Contract AoN Acceptance of Necessity APBG Advance Payment Bank Guarantee APSO Assistant Principal Staff Officer ARC Annual Refit Conference ARPP Annual Revenue Procurement Plan ASD Admiral Superintendent Dockyard ASSOCHAM Associated Chambers of commerce of INDIA ASTM American Society for Testing and Materials AT Accepted Tender ATE Advertised Tender Enquiry AV Audio-Visual AWB Air Waybill BA Business

6 Analytics BC Bills for Collection BE Budget Estimates BEUS Bulk Encryption Units BG Bank Guarantee BIS Bureau of Indian Standards BMU Base Maintenance Unit BOI Bought Out Items BPC Bulk Production Certificate BPT Battle Practice Targets BQ Budgetary Quote BRD Base Repair Depot BS British Standards CAD Computer-Aided Design CAG Comptroller and Auditor General CAM Computer-Aided Manufacturing CAPEX Capital Expenditure CB Contingent Bill CBI Central Bureau of Investigation CCI Competition Commission of INDIA CDA Controller of DEFENCE Accounts CE European Economic Area Standards CEC Consultancy Evaluation Committee CEMILAC Centre for Military Airworthiness & Certification CERC Cost Estimation & Reasonability Committee CERT-In Indian Computer Emergency Response Team CFA Competent Financial Authority CFR Cost and Freight CFY Current Financial Year CGDA Controller General of DEFENCE Accounts CIF Cost Insurance and Freight CII Confederation of Indian industry C-in-C Commanding/ Commander-in-Chief CIP Carriage and Insurance Paid To CISC Chief of Integrated DEFENCE Staff to the Chairman Chiefs of Staff Committee CMC Comprehensive Maintenance Contract/ Contract Monitoring Committee CMIE Centre for Monitoring Indian Economy CMMI Capability Maturity Model Integration CNC Commercial Negotiation Committee/ Contract Negotiation Committee COA Contract Operating Authority COM Chief of Materiel COMCASA Communications Compatibility and Security Agreement COMCG Commander of Coast Guard Region COMDIS Commander of Coast Guard District COMSEC Communications Security COTS Commercial off-the-shelf CP Central Procurement CPO Central Procurement Organisation CPPP

7 Central Public Procurement Portal CPSE Central Public Sector Enterprises CPT Carriage Paid To CPU Central Processing Unit CRV Certified Receipt Voucher CST Comparative Statement of Tenders CSY Commodore Superintendent Yard CTA Competent Technical Authority CV Curriculum Vitae CVC Central Vigilance Commission DA DEFENCE Attach DAP DEFENCE Acquisition Procedure/ Delivered at Place ABBREVIATIONS AND ACRONYMS DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFTDAVP Directorate of Advertising and Visual Publicity DBT Direct Bank Transfer DCF Discounted Cash Flow DDO Direct Demanding Officers DDP Department of DEFENCE Production/ Delivered Duty Paid DDPMAS Design, Development & Production of Military Airborne Stores Def Fin DEFENCE Finance DePP DEFENCE e-Procurement Portal Dept Department DFM Directorate of Fleet Maintenance DFPDS Delegation of Financial Powers to DEFENCE Services DFPM Delegation of Financial Powers in MoD DG Director General DGAQA Director General of Aeronautical Quality Assurance DGFT Directorate General of Foreign Trade DGNAI Director General of Naval Armament Inspection DGQA Director General Quality Assurance DHQ District Headquarter DIN Deutsches Institut f r Normung (Germany)

8 DL Defect List DMA Department of Military Affairs DP Delivery Period DPIIT Department for Promotion of industry and Internal Trade DPM DEFENCE Procurement Manual DPMF DEFENCE Procurement Manual Form DPR Detailed Project Report DPSU DEFENCE Public Sector Undertaking DPU Delivered at Place Unloaded DRDO DEFENCE Research and Development Organisation DS DEFENCE Services DSC Digital Signature Certificate EAS Expenditure Angle Sanction e-BG Electronic Bank Guarantee ECS Electronic Clearing Services e-EMD Electronic Earnest Money Deposit EMD Earnest Money Deposit (also Bid Security) EoI Expression of Interest EOW Economic Order Quantity EPF Employees Provident Fund ERP Enterprise Resource Planning ERV Exchange Rate Variation ESI Employees State Insurance ESIC Employees State Insurance Corporation EXW Ex Works FA Financial Advisor FAS Free Alongside Ship FAT Factory Acceptance Trials FCA Free Carrier FDA Food and Drug Administration (US)

9 FDR Fixed Deposit Receipt FE Foreign Exchange FEMA Foreign Exchange Management Act FICCI Federation of Indian Chambers of commerce & industry FMS Foreign Military Sales FOB Free On Board FOL Fuels, Oils and Lubricants FP Financial Proposal FSMTC Federal Service of Military-Technical Cooperation FY Financial Year GCS Green Channel Status GeM GOVERNMENT e-Marketplace GeMAR&PTS GeM Availability Report and Past Transaction Summary GFR General Financial Rules GoI GOVERNMENT of INDIA GOST Gosudarstvennyy Standart (Russia) Govt GOVERNMENT GoW Growth of Work GSQR General Staff Qualitative Requirements GST Goods and Services Tax GSTIN GST Identification Number GTE Global Tender Enquiry HAT Harbour Acceptance Trials HQ Headquarter HSN Harmonised System of Nomenclature HW Hardware IAF Indian Air Force ICA Indian Council of Arbitration ICADR International Centre For Alternative Dispute Resolution ICC International Chamber of commerce ICG Indian Coast Guard ICT Information and Communications Technology IEEE Institute of Electrical and Electronics Engineers IFA Integrated Financial Advisor IGA Inter GOVERNMENT Agreement IIT Indian Institute of Technology IMF International Monetary Fund DRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFT DPM 2021 - CHAPTERSDRAFTIN Indian Navy Incoterms International Commercial Terms Infosec

10 Information Security INR/ Indian Rupee IP Integrity Pact/ Internet Protocol IPBG Integrity Pact Bank Guarantee IPR Intellectual Property Rights IS International Standards ISO Inter-Services Organisation/ International Organization for Standardization IT Information Technology ITU International Telecommunication Union JAKLI Jammu & Kashmir Light Infantry JIT Just-in-Time JLG Joint Liability Group JRI Joint Receipt Inspection JS Joint Secretary JS & Addl FA Joint Secretary & Additional Financial Advisor JSG Joint Services Guide JSQR Joint Staff Qualitative Requirements JV Joint Venture km Kilometre KVIC Khadi & Village Industries Commission L1 Lowest Bid in Tender Evaluation Process Lab Laboratory LAO Local Audit Office LC Letter of Credit LCS Least Cost System LD Liquidated Damages LED Light Emitting Diode LEMOA Logistics Exchange Memorandum of Agreement LME London Metal Exchange LOA Letter of Offer and Acceptance LoI/ LOI Letter of Intent LOR Letter of Request LP Local Purchase LPC Local Purchase Committee LPP Last Purchase Price LTBA Long Term Business Agreements LTE Limited Tender Enquiry MeitY MINISTRY of Electronics and Information Technology MET Maintainability Evaluation Trials MHR Man-Hour Rate MM19 Aerospace and electronic cost indices (UK)