New DRDO Procurement Manual 2020 encourages participation of MSMEs, start-ups

  • Industry News
  • Oct 22,20
The new DRDO Procurement Manual will facilitate the indigenous defence industry by simplifying the processes and ensure their participation in design and development activities.
New DRDO Procurement Manual 2020 encourages participation of MSMEs, start-ups

New Delhi

To encourage more participation of Indian industry, including start-ups and micro, small & medium enterprises (MSMEs) in Defence Research & Development (R&D) for achieving ‘Atmanirbhar Bharat’, Defence Minister Rajnath Singh released a new version of Defence Research and Development Organisation (DRDO) Procurement Manual 2020 (PM-2020) on October 20, 2020.

Speaking on the occasion, Rajnath Singh said, “The new DRDO Procurement Manual will facilitate the indigenous defence industry by simplifying the processes and ensure their participation in design and development activities. The PM-2020 will help towards realising Prime Minister Shri Narendra Modi’s dream of ‘Aatmanirbhar Bharat." He appreciated the contribution of all the officials of DRDO and Finance wing in the Ministry of Defence for their contribution in bringing out the revised PM-2020.

The PM-2020, will facilitate faster execution of R&D projects/programmes. The modified features the Manual will go a long way to facilitate participation of industry in various R&D projects.

Bid security declaration option for earnest money deposit, increase of threshold limit for advance payment, placement of order on lowest bidder 2 (L2) in case L1 backs out are some of the salient features of the new manual, which will assist the industry for the speedy execution of projects.

Some more enabling measures of PM-2020 are exemption of bid security and performance security up to Rs 10 lakh, no negotiations for commercial off-the-shelf (COTS) items/services wherever price discovery is happening through market forces.

Performance security for service contracts is linked to the payment cycle instead of total contract value. Procurement of stores from development partners, safeguarding of free issue material through insurance cover instead of bank guarantee (BG) are other facilitating measures adopted to help the industry.

In the new PM-2020, the liquidated damage (LD) rate for development contracts has been reduced. The delivery period (DP) extension process has been simplified for faster decision making. Many of the internal procedures have been further simplified for faster engagement with industry. It may be noted that the previous Procurement Manual of DRDO was last modified in 2016.

Those present on the occasion included Secretary Department of Defence Research & Development and Chairman DRDO Dr G Satheesh Reddy, Secretary (Defence Finance) Gargi Kauland other senior officials of Ministry of Defence.

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