The 248 page document will become operational from 1 September 2008.

Highlights of DPP-2008 Transparency
Vendors will be given advance information before the issue of Request For Proposal (RFP) in all procurement cases excepting those for security sensitive products. This information given on MoD website will provide them a lead time for preparation of their offers in response to the RFP. All verbal communications with the vendors during the course of trials will be confirmed in writing within a week. The result of technical/trial evaluations along with reason(s) for disqualification would also be intimated to vendors after the acceptance of technical/staff evaluation reports. Defence Public Sector Undertakings would be required to sign Integrity Pact with their sub-vendor(s) in all cases where the procurement value exceeds Rs.20 crores.

Field Trials
In order to increase the transparency in evaluation process, qualitative requirement of the equipment under procurement, as laid down by the Services Headquarters, would be analyzed right at the inception stage for the methods and agency responsible for it evaluation. Trial methodology so prepared would be incorporated in RFP for advance information of the vendors. Inclusion of trial methodology in the RFP would ensure that there is a common assumption by all agencies involved in the trial including participating vendors. The result of trial evaluation of the parameters so far was being conveyed to the vendors verbally in the form of debriefing on a day to day basis, which has now been made mandatory to be confirmed as a written communication also. This would ensure adequate information is provided to the vendors regarding the performance of their equipment and is well documented for future references. Another important aspect with regard to providing oversight on the conducted trial procedure, in large value projects, is enlarging the mandate of the Technical Oversight committee, which is responsible to see whether trials has been conducted as per prescribed procedures. Technical Oversight committee has now also been mandated to oversee whether the trials have been carried out according to trial methodology given in the RFP as well as trial directive. A more broad based and multidisciplinary trial team has been proposed in DPP-2008 for cases where an equipment is being procured for more than one Service or if it involves transfer of technology.

Encourage competition by broadening the Vendor Base
In order to make broad based Service Qualitative Requirements(SQRs) Service Headquarters may obtain inputs by issuing Request For Information(RFI) on MoD website. It would also ensure that vendors get advance information regarding likely procurement schemes. To ensure that SQRs are broad based and would result in multi-vendor situation, a compliance table of SQRs, vis-à-vis technical parameters of available equipment in as much details as feasible, would be prepared at the stage of formulation/approval of SQRs. If only one vendor is found compliant to the SQR parameters after the technical evaluation stage, a review would be carried out by the Technical Evaluation Committee(TEC) to derive causes of such single vendor situation for recommending suitable corrective measures for review of the acquisition scheme.

Quality and Reliability
To ensure better reliability and quality assurance, vendors would be required to give details of reliability model and basis of reliability prediction. The efficacy of such model will be verified during technical and environmental evaluation. A seller is required to rectify any failure in the equipment during the period of warranty. The seller, however, is not required to inform the cause of such a failure. Knowledge of cause of failure may be of valuable help to the user in long term maintenance of the equipment. The new provision in the warranty clause requires that the seller shall intimate the assignable cause of the failure to the user.

Enhancement of Delegation of Financial Powers to the Services
The Services have been given greater delegation of financial powers for capital acquisition to enhance efficiency and expedite decision-making. Service Headquarters will now approve cases up to Rs.50 crores. Financial power delegated to the Defence Secretary has also been enhanced to Rs. 75 crores. Further, the Defence Procurement Board(DPB) would accord AON (Acceptance of Necessity) to cases up to Rs.100 crores. Only cases above Rs.100 crores are to be brought before the Defence Acquisition Council. To cut delays, the existing provisions for grant of extension of time against RFP has been limited to only eight weeks. In multi-vendor cases, once L-1 vendor is identified, normally there would be no need for any further price negotiations. To check long delays in issuing of RFP after AON and quantity vetting, a provision has been incorporated that the AON would lapse where RFP after approval of quantity is not issued within two years from accord of AON. In such cases, fresh AON will be considered only after re-examination of available technology and operational necessity.

History of DPP As part of the implementation of the report of the Group of Ministers on reforming the National Security System post Kargil Operations, new Defence Procurement Management Structures and Systems were set up in the Ministry of Defence in the year 2001. For operationalizing these structures and systems, the procedure for Defence Procurement existing since 1992, was revised. The Defence Procurement Procedure-2002 (known as DPP-2002) came into effect from December 30, 2002. It was applicable to procurements flowing out of 'Buy' decision of Defence Acquisition Council. The scope of this procedure was enlarged in June 2003 to include procurements flowing out of 'Buy and Make' decisions. The procedure was further reviewed and DPP-2005 came into effect from July 01, 2005.

The DPP-2005 was also reviewed and revised based on experience gained in its implementation, and further enlarged to include revised Fast Track Procedure and Procedure for Indigenous Warship Building. It also included procurements categorized in the 'Make' category for bridging the existing critical gap and provided requisite framework for increased participation of Indian Industry in the Defence Sector. The DPP-2006 thus came into effect from September 01, 2006.

While promulgating DPP-2006, it was envisaged that review of the procurement procedure would be undertaken every two years. The DPP-2008 is the outcome of the experience and feedback gained in implementation of the existing procedure. The revised procedure being named as DPP-2008, will come into effect from September 01, 2008. DPP-2008 aims to strengthen the procurement framework by making it more transparent, impartial and accountable.