Rajnath Singh releases DRDO’s Procurement Manual-2020

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.

New Delhi: Defence Minister Rajnath Singh released a new version of Defence Research and Development Organisation (DRDO) Procurement Manual 2020 (PM-2020) to encourage participation of Indian industry, including Start-ups and Micro, Small & Medium Enterprises (MSMEs) in Defence Research and Development (R&D) for achieving ‘Atmanirbhar Bharat’.

Secretary and Chairman DRDO Dr G Satheesh Reddy, Secretary (Defence Finance) Gargi Kaul and other senior officials of Ministry of Defence were present on the occassion of the launch The PM-2020, will facilitate faster execution of R&D projects/programmes.

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“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,” as per a release by the Ministry of Defence.

The other salient features 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