India’s Defense Acquisition Council, the top decision-making body of the Defense Ministry, has approved major policy changes that include increased offset baselines, reduced delays in procedures, and emphasis on local production.
Accordingly, in the new Defense Procurement Policy, threshold contract value for which offsets are mandatory has been revised from the earlier $46 million to $320 million.
Delays in procurement will be reduced by eliminating repetitive procedures. Certain procurements will be allowed in case of single vendor situations with proper justifications. Earlier, no purchase order was issued if there was only a single vendor bidding for any project.
The Defense Ministry clarified that representatives who are on the payroll of a defense firm should not be called agents. It defines agents as those whose income/remuneration is dependent on whether they are able to win the contract. “The representative should be paid a reasonable fee…he should not be a commission agent or be paid depending on the cost of a deal or the success or failure of the deal,” Minister for Defense Manohar Parrikar said.
The new Defense Procurement Policy also includes guidelines for the government to enter into strategic partnerships with private sector companies in six critical areas, ranging from aircraft and warships to tanks and guided missile systems, reports Defense World.