Defence Procurement Procedure - 2008 (Amendment- 2009)

The following amendments to DPP-2008 have been made:

(a) Introduction of new category for acquisition - Buy & Make (Indian).
(b) Sharing of information with Indian Industry.
(c) Enhancing role of Independent Monitors.
(d) Removal of ambiguity regarding EMD in signing the Integrity Pact.
(e) Formulation of SQRs including issue of Request for Information (RFI).
(f) Offsets requirement in 'Option Clause', cases and change of offset partner in exceptional cases.

The amendments to DPP-2008 are being issued in the form of Defence Procurement Procedure - 2008 (Amendment - 2009), details of which are given on
http://mod.nic.in/dpm/welcome.html

These amendments are incorporated to the existing DPP-2008 in relevant pages/paragraphs as mentioned and will take effect from 01 Nov 2009.

Brigadier(Retired) Sukhwindar Singh
http://www.svipja.com/
(A Global Solution for Offsets)
Credit: http://www.mod.nic.in/

National Seminar on Defence Acquisition

National Seminar on Defence Acquisition was organised by the Institute of Defence Studies & Analyses on 27 Oct 2009 in New Delhi. The Defence Minister and Fomer DG, Defence Acquition Council (DAC) delieverd addresses which contained important points. These may find inclusion in the Revised DPP 2008, due in 2009. The following addresses are linked:

Address by Defence Minister

Address by Former Director General (Acquisition)


Brigadier(Retired) Sukhwindar Singh
www.svipja.com
(A Global Solution for Offsets)

Credit: Institute of Defence Studies & Analyses, http://www.idsa.in/

Likely Policy Changes to Boost Indian Defence Sector

A new category of Buy and Make (Indian) is likely to be introduced in DPP 2008. If a project is selected by the Defence Acquisition Council to be categorised as Buy and Make (Indian), Indian firms, both public and private, will play a lead role in negotiating and obtaining technology and co-production arrangements with the foreign original equipment manufacturers (OEMs). As such, the request for proposal will be issued to the Indian firms and not to the foreign OEMs.

Indian firms identified to have requisite technical and financial capabilities would be required to submit project proposals indicating detailed roadmap for development and production of the items over its life cycle. They will also be required to spell out the proposed production arrangement with the foreign OEM along with the content of the Transfer of Technology (ToT). The product so manufactured and supplied by the Indian Company to the MOD / Its Agencies must have 50% indigenous content. Thus amended DPP-2008, would enable pro-active participation of Indian Defence Industry in manufacturing defence products through co-production arrangements, such as JVs, with foreign manufacturers and through ToT.

Under Amendment 2009 to the DPP-2008, a public version of the Long Term Perspective Plan of the Armed Forces outlining technology perspective and capability roadmap covering a period of 15 years will be widely publicised and made available on MoDs website.

Further, to facilitate active participation of domestic industry in acquisition planning, Reps of Companies and Industry Associations will be invited for presentations and consultations in procurement meetings before decisions on the source of procurement are taken.

By an amendment, the role of the Independent Monitors (IM) is more defined and enlarged. It would enable them to scrutinize complaints with regards to violation of Integrity Pact.

Pse read the full Article on http://in.biz.yahoo.com/091029/50/baugiy.html and http://www.defencetalk.com/dpp-2009-to-boost-technology-transfer-to-indian-industry-22748/


Brigadier(Retired) Sukhwindar Singh
http://www.svipja.com/
(A Global Solution for Offsets)
Credit: http://www.in.biz.yahoo.com/ and www.defencetalk.com

HAL to Supply Flaperons for Boeing 777

State-owned aerospace firm Hindustan Aeronautics Limited (HAL) has signed an agreement with Boeing to supply flaperons for the Boeing's 777 series commercial jetliners. It is understood that HAL will supply 600 units of flaperons to Boeing which will be delivered in phases by 2019.

Indian carriers have already ordered a total of 36 Boeing 777s. This includes 23 from Air India and 13 from Jet Airways.

The 777 flaperon is a complex composite assembly that is instrumental in controlling the airplane’s maneuverability in flight. Referred to as a 'control surface', flaperons work both as an aileron to control roll and as a flap to control lift.

“HAL and Boeing share a very special relationship. Showcasing HAL’s composite manufacturing capability on one of the world’s premier long-haul commercial jets positions us for even greater opportunities at the forefront of technology,” Soundara Rajan, Director, Corporate Planning & Marketing, HAL said. Boeing's relationship with HAL date back to 1991. Boeing India President Dinesh Keskar said, "The composite 777 flaperon that HAL will produce represents a significant leap forward in technological capability, and supports Boeing’s strategy to work in partnership with India’s aerospace industry for the long-term.”

Brigadier(Retired) Sukhwindar Singh
http://www.defenceoffsetsindia.com/
(A Global Solution for Offsets)
Credit: Business Standard.

FDI Norms in Defence Production

The Finance Ministry is taking up the new regime for calculating foreign investment in Indian companies. The MOD has voiced concern that it opens up the possibility of foreigners taking ownership in defence production companies in excess of the 26% if allowed now, and creating more pressure to modify the policy later.

The Ministry has argued with the Finance and Commerce Ministries the need for putting safeguards to prevent the abuse of the new norms that do not recognise indirect foreign investment if the investing company is owned and controlled by the Resident Indians.

Foreign Direct Investment (FDI) ceiling for defence production is not applicable to services such as defence product design and development. Therefore, companies in this service segment with up to 49% FDI can invest in defence production without their investment being counted as FDI as they are 51% owned and controlled by resident Indians, said a Government official. Read the full article on http://economictimes.indiatimes.com/articleshow/5140216.cms

Brigadier(Retired) Sukhwindar Singh
http://www.defenceoffsetsindia.com/
(A Global Solution for Offsets)
Credit: The Economic Times.

Indigenous Manufacure of Components/Sub-Systems/Systems for Defence

Indian industry should mature to manufacturing complete systems for the Defence sector on par with international standards and deliver them on time and at competitive costs, said Dr V.K. Saraswat, Scientific Adviser to the Defence Minister.

So far, most companies have been doing components and sub-systems of good quality. More than 800 industries are involved in projects taken up by the Defence Research Development Organisation (DRDO), but the scale of self reliance index is around 30-40 per cent indigenous production and rest is import.

Calling for a reversal of this scenario and overcoming the syndrome of imports, Dr Saraswat said: “There is a need to make big investments in focused areas to bridge the technology gap and reduce dependence on imported components.”

Read the full Article on http://www.thehindubusinessline.com/2009/10/15/stories/2009101551051700.htm

Components, sub-systems & systems supply to the Armed Forces has been a 'burning issue' for Years especially for the erstwhile USSR origin equipment held in the inventory with Us. DRDOs focus on the issue is a welcome step. However there are issues of technology, and numbers needed which make indigenous manufacturing problematic. Detailed thought is needed on these issues.

Brigadier(Retired) Sukhwindar Singh
http://www.defenceoffsetsindia.com/
(A Global Solution for Offsets)
Credit: Business Line of The Hindu.

Govt Should Encourage Pvt Players in Defence R&D: A Study

The government should encourage private players in defence R&D and also fund 80 per cent of the research and development activities to emerge as a significant player in the global defence market, a study said. Since defence research, design and development is fraught with risks, the privte sector is unlikely to come forward, the joint study of Assocham and Ernst and Young said.

If India wishes to emerge as a significant player in the global market, it would have to fund export driven products and make export variants of high end systems, it said. "Therefore, there is a need for a policy as per which 80 per cent of Indias R&D is funded from government resources, effectively encouraging the private sector to undertake risks associated with developing defence products," it said.

Read the full Article on http://in.news.yahoo.com/20/20091001/372/tbs-govt-should-encourage-pvt-players-in.html

Brigadier(Retired) Sukhwindar Singh

http://www.svipja.com/

(A Global Solution for Offsets)

Credit: http://www.in.news.yahoo.com/