Defence Procurement Manual (DPM) 2025
Kartavya Desk Staff
Source: News on Air
Context: Ministry of Defence approved Defence Procurement Manual (DPM) 2025, replacing the 2009 manual to accelerate revenue procurement and promote Aatmanirbharta.
About Defence Procurement Manual (DPM) 2025:
What it is?
• A policy document guiding all revenue procurement of goods/services for Armed Forces & MoD organisations, worth ~₹1 lakh crore annually.
• Updated after 16 years to align with public procurement norms, technology adoption, and operational needs of modern warfare.
• Streamline & Simplify: Cut red tape, enable faster approvals, and avoid file movement delays.
• Support Industry: Address working capital issues, ease penalties, and provide order assurance.
• Boost R&D & Innovation: Collaborate with IITs, IISc, academia, and industry for indigenisation.
Key Features:
• Ease of Doing Business: Removes redundant approvals, ensures timely payment, and promotes transparent, competitive bidding. NOC requirement from DPSUs for open tenders dispensed with for level playing field.
• Removes redundant approvals, ensures timely payment, and promotes transparent, competitive bidding.
• NOC requirement from DPSUs for open tenders dispensed with for level playing field.
• Industry-Friendly Provisions: Assured orders up to 5 years (+5 years in special cases) for industry confidence. Government to provide technical handholding, equipment sharing for prototype development.
• Assured orders up to 5 years (+5 years in special cases) for industry confidence.
• Government to provide technical handholding, equipment sharing for prototype development.
• Relaxed Penalties: No Liquidated Damages (LD) during development phase; minimal 0.1% LD post-prototype. LD capped at 5% normally (10% only in exceptional, prolonged delays) – incentivises genuine suppliers.
• No Liquidated Damages (LD) during development phase; minimal 0.1% LD post-prototype.
• LD capped at 5% normally (10% only in exceptional, prolonged delays) – incentivises genuine suppliers.
• Decentralised Decision-Making: Empowers Competent Financial Authorities (CFAs) at field level to extend delivery periods, revise bid dates, approve cases without file movement to higher levels.
• Technology & Innovation Push: New chapter on Innovation & Indigenisation for in-house design, R&D with academia–industry collaboration. Encourages development of import substitutes and local spare part production.
• New chapter on Innovation & Indigenisation for in-house design, R&D with academia–industry collaboration.
• Encourages development of import substitutes and local spare part production.
• Collegiate Decision-Making: Strengthens multi-level consultation for fair, transparent, and quicker decision-making process.
• Repair & Maintenance Efficiency: Upfront 15% growth provision in work contracts for aerial & naval platforms to reduce downtime.
• Limited Tendering & Proprietary Procurement: Allows limited tenders for goods/services up to ₹50 lakh (higher in special cases). Proprietary Article Certificate procurement allowed with parallel efforts to identify alternate sources.
• Allows limited tenders for goods/services up to ₹50 lakh (higher in special cases).
• Proprietary Article Certificate procurement allowed with parallel efforts to identify alternate sources.
• Government-to-Government (G2G) Procurement: Clear procedure for high-value G2G deals for faster acquisition of critical equipment.
• Alignment with Finance Ministry Guidelines: Fully synchronised with Manual for Procurement of Goods (MoF) ensuring transparency, fairness, and audit compliance.