Defence Minister Rajnath Singh released a new version of the Defence Research and Development Organisation (DRDO) Procurement Manual 2020 (PM-2020) on Tuesday. The previous Procurement Manual was modified in 2016.

“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,” an official statement said.

This is being done to encourage more participation of Indian industry, including start-ups and micro, small & medium enterprises (MSMEs) in defence research and development, the statement added.

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

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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 are other facilitating measures have been 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,” the statement said.

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