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NATIONAL CONFERENCE INTRICACIES OF PROCUREMENT IN DEFENCE SERVICES PUBLIC PROCUREMENT FRIDAY 10 th November 2006 Directorate General of Aeronautical Quality Assurance ( DGAQA ) DGAQA is a Govt. Quality Assurance organisation for Military Aviation, dealing with

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NATIONAL CONFERENCE

INTRICACIES OF PROCUREMENT

IN DEFENCE SERVICES

PUBLIC PROCUREMENT

FRIDAY 10th November 2006


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Directorate General of Aeronautical Quality Assurance (DGAQA)

DGAQA is a Govt. Quality Assurance organisation for Military Aviation, dealing with

AERONAUTICSAIR ARMAMENT

MISSILESGROUND SUPPORT EQUIPMENT

SUPPORT ROLE IN DEFENCE PROCUREMENT

HQ is situated at New Delhi, with 34 Field Establishments co-located at:

DPSUs PSUs OFs

ADA DRDO Labs

Total Technical manpower is 1327 with 350 officers from various Engineering disciplines

Value of Aero stores under Quality Assurance coverage during the year 2006-07 will be approx. Rs. 5500 crores


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CARDINAL PRINCIPLE IN PUBLIC PROCUREMENT

To procure the material/services of the specified quality, at the most competitive prices in a fair, just and transparent manner.


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BROAD GUIDELINES IN MAKING PUBLIC PROCUREMENT

  • SPECIFICATION IN TERMS OF QUALITY/TYPE

  • AVOID INVENTORY CARRYING COST/PURCHASE IN EXCESS OF REQUIREMENTS.

  • OFFERS TO BE INVITED AS PER DOCUMENTED PROCEDURE FOLLOWING A FAIR, REASONABLE AND TRANSPARENT POLICY.

  • SELECTED OFFER MUST MEET REQUIREMENTS ADEQUATELY IN ALL RESPECTS.

  • PRICE REASONABLENESS CONSISTENT WITH THE QUALITY REQUIREMENTS.

  • RECORD AT EACH STAGE OF PROCUREMENT HIGHLIGHTING CONSIDERATION THAT WEIGHTED DECISIONS


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DEFENCE PROCUREMENT PROCEDURE 2006(DPP-2006) Website : www.mod.nic.in

This procedure is meant for capital acquisition. In DPP-2006, a procedure for development of systems based on indigenous

R & D categorized as ‘MAKE’ is also put in place for increased participation of Indian Industries.

Highlights

  • Fast Track Procedure

  • Major decisions on procurement to be taken simultaneously.

  • Enhanced transparency : Vendor registration through internet for generic requirements of the defence services.

  • Increased transparency in the conduct of field trials.

  • Integrity pact.

  • Offset obligation.


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DEFENCE PROCUREMENT MANUAL – 2006 (DPM-2006)Website : www.mod.nic.in

This manual covers detailed procedure to be followed in the procurement process of revenue items.


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Highlights : DPM- 2006

  • GFR-2005 provisions incorporated relating to limited Tender Enquiry, Cash Purchase Limit, Purchases through Proprietary Article Certificate, price variation clause and limit for advance payment.

  • Apportioning quantity to L2 & L3 when L1 does not have capacity ,as per CVC guidelines.

  • Re-floating tenders after reformulating Services’ Quality Requirement for competitive bidding, in case of single tender situation after TEC.

  • Level playing field to indigenous vendor vis-à-vis foreign vendor.

  • RATE CONTRACT PROVISION FOR COMMON USER ITEMS.

  • Reduction in repeat order quantity from 100 to 50%.


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CVC GUIDELINES

Guidelines encourage transparency and the culture of honesty.

CVC website : www.cvc.nic.in

Highlights

  • Documented Purchase Manual

  • Provisioning Guidelines

  • Estimate Guidelines (market rate, LPP, economic indices, input cost/intrinsic value).

  • Mode of Tendering/Period to quote/Bid document/Postponement of tender opening.

  • Purchase policy/Reasonableness of prices/Advance payment/bank Guarantee.

  • Post Contract management (amendment/monitoring)


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INTRICACIES OF PROCUREMENT IN DEFENCE SERVICES

TECHNOLOGY ISSUES

  • Poor response/viability in High technology low volume cases

  • Limited items available in COTS.

  • Limited response due to stringent/special technical requirements of defence specification-cost also increases.

  • Non-availability of indigenous technologyfor defence equipment.

    SUPPLY ISSUES

  • Fast changes in technology-obsolescence/storage life.

  • In open TE Cases, assessing capability of large number of firms at different locations in short time is difficult.

  • Limited qualified vendors for specialized items for Defence Services.

    POLICY AND DATA ISSUES

  • Procurement policy to consider L1.

  • Life cycle cost data not available.

  • Reliability Data


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REGISTRATION CRITERIAReference document : JSG-015-02

  • Design & Development Capability.

  • Technical Know-how

  • Infrastructure & Manufacturing facilities : Plant & Machinery-Test facilities.

  • Quality System/Practices.

  • Accreditations & Approvals.

  • Financial Capacity.

  • Skilled/Technical Manpower Resources.

  • Past Supplies & performance.



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