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MoD:Defence Procurement Policies Issues and Discussions

The Military Issues & History Forum is a venue to discuss issues relating to the military aspects of the Indian Armed Forces, whether the past, present or future. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
ramana
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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 16 Mar 2018 06:03

^^^ Not a good idea. It shows the frustration with things and the solution is worse than the problem.

It will lead to Praetorization of Government civil services.

Glad MoD has not taken this up with any seriousness.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 17 Mar 2018 10:26

Ministry of Defence16-March, 2018 15:49 IST
RM initiates development of tamil nadu defence corridor at defence industry meet

Under the Prime Minister Shri Narendra Modi’s larger vision of pushing Make in India, the Ministry of Defence has taken multiple measures to promote indigenisation in the defence industry. In the 2018 budget, two Defence Corridors were announced in Tamil Nadu and Uttar Pradesh. Subsequent to the announcement, the process has begun to set up these corridors.



As one of the first steps to initiate development of the Tamil Nadu Defence Corridor, an interactive meeting with local industry was held at Tiruchirappalli, today. The meeting, which was attended by over 200 representatives from the industry, was addressed by Raksha Mantri Smt Nirmala Sitharaman. Several ministers and senior officials of Tamil Nadu Government and senior officials from Ministry of Defence, Defence Public Sector Undertakings, Bharat Heavy Electricals Limited (BHEL) and Ordnance Factory Board were also present in the meeting. In her inaugural address, the Raksha Mantri gave a brief overview of the importance of the defence sector in the overall growth and development of the country and highlighted the importance of the proposed Defence Corridor in this respect. She sought the active support of all the stakeholders to make the project successful. Smt Sitharaman also invited the local manufacturers to showcase their products related to defence supplies so as to attract the attention of more than 300 manufacturers expected to be present in the DefExpo 2018, scheduled between 11 to 14 April 2018 in Chennai.



Several presentations ranging from measures taken to promote indigenisation and self-reliance in defence production, the industry friendly measures taken by the Tamil Nadu government, the envisaged role of the Public Sector Enterprises in the proposed Defence Corridor and the capabilities and expectations of the local industry were made. The presentations were followed by a very vibrant question answer session.



The Tamil Nadu Defence Corridor, also called the Tamil Nadu Defence Production Quad as the nodal cities form a quadrilateral, will include Chennai, Hosur, Salem and Coimbatore, Tiruchirappalli as nodes. These nodal cities have existing defence ecosystem in the form of OFBs, vendors working with Defence PSUs, and other allied industries. The Tamil Nadu Defence Corridor aims to bolster interaction between all industry players in order to create long-term synergy and eventual development of the area into a Defence Production powerhouse.



SRR/NAo/Rajib


(Release ID :177569)

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 17 Mar 2018 10:29

Delegation of Financial Powers to Armed Forces

Raksha Mantri Smt. Nirmala Sitharaman has approved the enhancement of powers of the Vice Chief of the Armed Forces in respect of Proprietary Article Certificate (PAC) and Single Tender Enquiry (STE) procurement cases with the objective to empower our forces for ensuring operational preparedness. Till now, powers for procurement of articles under PAC and STE had been restricted to 50 and 5 per cent respectively of normal powers delegated for revenue procurements. Wherever full powers had been delegated in respect PAC and STE, a cap of Rs 50 crore and Rs 5 crore respectively were made applicable.

A number of initiatives have been taken by the Ministry of Defence, in the recent past, to simplify and streamline the procedures and decentralise the decision-making through delegation of powers. Now, the Government has enhanced financial delegation to the Armed Forces in respect of Revenue Procurement as well.

With this delegation, the powers of the Vice Chiefs in respect of PAC cases, hitherto restricted to 50 per cent of competitive bidding cases, has been increased and made equal to the powers delegated in competitive bidding cases. In respect of STE cases, the powers have been enhanced to 50 per cent of the powers of competitive bidding cases from the existing cap of 5 per cent of competitive bidding powers.

This delegation will greatly enhance the ability of the Armed Forces to keep a high degree of serviceability of the in-service equipment, procurement of stores including ammunition, etc. thereby leading towards a significant boost in ensuring operational preparedness.



SRR/NAo/Nampi/DK/Rajib


(Release ID :177436)

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 17 Mar 2018 10:38

Ministry of Defence14-March, 2018 16:34 IST
Modernisation of Defence

Modernisation of defence sector is a continuous process and is undertaken based on threat perception, operational challenges, technological changes and available resources. The process of defence acquisition is based on the fifteen years Long Term Integrated Perspective Plan (LTIPP), five years Services Capital Acquisition Plan (SCAP) and an Annual Acquisition Plan (AAP). Government also constantly reviews the security scenario and accordingly decides to induct appropriate defence equipment to keep the Armed Forces in a state of readiness.



The Government of India remains continuously vigilant and is firm in its resolve to take all necessary steps to effectively safeguard India’s security and territorial integrity.



Apart from the main responsibility of defending the borders of the country, the Armed Forces render timely assistance to civil authorities for the maintenance of law and order and / or essential services as also in rescue and relief operations during natural calamities. Specific details of action taken in this regard are included in chapter-12 of the Annual Reports regarding “Cooperation between Armed Forces and Civil Authorities” of the Ministry of Defence, which are available on the website of the Ministry (mod.nic.in).



The Government is pursuing several initiatives to strengthen the defence industry as per details, given below:-

Defence Procurement Procedure (DPP) has been revised in 2016 wherein specific provisions have been introduced for stimulating growth of the domestic defence industry.
A new category of procurement ‘Buy [Indian-IDMM (Indigenously Designed, Developed and Manufactured)]’ has been introduced in DPP-2016 to promote indigenous design and development of defence equipment.
Government has notified the ‘Strategic Partnership (SP)’ Model which envisages establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, wherein they would tie up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chain.
The ‘Make’ Procedures has been simplified with provisions for funding of 90% of development cost by the Government to Indian Industry and reserving projects not exceeding development cost of Rs. 10 crore (Government funded) and Rs. 3 crore (Industry funded) for MSMEs.
The ‘Make’ Procedures has been simplified with provisions for funding of 90% of development cost by the Government to Indian Industry and reserving projects not exceeding development cost of Rs. 10 crore (Government funded) and Rs. 3 crore (Industry funded) for MSMEs.
Separate procedure for ‘Make-II’ sub-category has been notified wherein a number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry / individual etc., have been introduced.
Defence Investor Cell has been created in the Ministry to provide all necessary information including addressing queries related to investment opportunities, procedure and regulatory requirements for investment in the sector.
FDI Policy has been revised and under the revised policy, FDI is allowed under automatic route upto 49% and beyond 49% through Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.
The Defence Products List for the purpose of issuing Industrial Licenses (ILs) under IDR Act has been revised and most of the components, parts, sub-systems, testing equipment and production equipment have been removed from the list, so as to reduce the entry barriers for the industry particularly small & medium segment.
The initial validity of the Industrial Licence granted under the IDR Act has been increased from 3 years to 15 years with a provision to further extend it by 3 years on a case-to-case basis.
Offset guidelines have been made flexible by allowing change of Indian Offset Partners (IOPs) and offset components, even in signed contracts.
To promote the participation of private sector, Outsourcing and Vendor Development Guidelines for DPSUs and OFB have been issued.
The Government has set up the Technology Development Fund (TDF), which aims at funding the development of defence and dual use technologies that are currently not available in the defence industries.
In addition, Technology Perspective and Capability Roadmap (TPCR), which gives out the details of the equipment and technologies, required by the Armed Forces, has been put in the public domain to provide the Indian Defence Industry an overview of the direction in which the Armed Forces intend to seek specific capability in the long run.


This information was given by RakshaRajyaMantriDr.SubhashBhamrein a written reply to ShriN.K. Premachandranin LokSabha today.

NAo/Nampi/Rajib




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jaysimha
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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 17 Mar 2018 11:25

Setting up of defence production IT division ( DP IT DIVISION ). Can we assume this to be MRM initiative of putting burners under the seat of all babuns. Now they can no longer work in silos.

HAL is major contributor. May be Tejas effect

http://dgaeroqa.gov.in/ADMIN_CIRCULARS/Circulars/SETTING%20UP%20OF%20DEFENCE%20PRODUCTION%20IT%20DIVISION%20(DP%20IT%20DIVISION).pdf

Phone numbers are given in the letter. we can call and find/check status.many times I have tried doing that. unfortunately I use to get Koooooooooooooooooooonnnn fax tone from the "phone" lines.

one more thing i fail to understand.. Why the official letters publications are all "theda" . May be because Mod people cannot handle the weight of the paper to feed properly to the printer / or while scanning .

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 22 Mar 2018 01:53

Please read between the lines and connect the dots. Arms procurement was a huge funding mechanism for Congress. Most requirements flown down to DRDO are designed to ensure failure and clamor for import. Could be such requirements are borrowed from import lobby.

http://www.opindia.com/2018/03/wikileak ... ssion=true

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 22 Mar 2018 10:23

Ministry of defence circular

amendment to dfpds 2016

https://mod.gov.in/dod/sites/default/files/fdsf.pdf
http://cgda.gov.in/ifa/circulars/cir052018-28022018.pdf

can any body throw more light on this please.
Thanks in advance.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Aditya_V » 22 Mar 2018 11:40

For those interested in this putting some excel files with data which I will later turn to graphs

₹ in crore
2009-10 Actual 2010-11 Actual 2011-12 Actual 2012-13 Actual 2013-14 Actual 2014-15 Actual 2015-16 Actual 2016-17 Actual 2017-18 RE 2018-19 Bud
Defense Spending

Capital Expenditure 51112.37 62055.98 67902.38 70499.12 79125.05 81886.98 79958.32 86370.92 86499.48 94010.55
Revenue Expenditure 94376.37 96393.09 107623.71 116485.1 128890.21 145145.95 151599 173025.04 187405.99 195273.51

Defense Budget 145488.74 158449.07 175526.09 186984.22 208015.26 227032.93 231557.32 259395.96 273905.47 289284.06
Total Expenditure 1057478.35 1186115.2 1305195.3 1420472.7 1575096.57 1695136.79 1779528 1933018.06 2217534.2 2409895.12
Defense % of total Expenditure 13.8% 13.4% 13.4% 13.2% 13.2% 13.4% 13.0% 13.4% 12.4% 12.0%
Rev Exp YOY Inc 2.1% 11.7% 8.2% 10.6% 12.6% 4.4% 14.1% 8.3% 4.2%
Capex YOY Inc 21.4% 9.4% 3.8% 12.2% 3.5% -2.4% 8.0% 0.1% 8.7%
Bud Inc 8.9% 10.8% 6.5% 11.2% 9.1% 2.0% 12.0% 5.6% 5.6%

http://s931.photobucket.com/user/adivik/media/Def%20Budget_zpsea6wpr6f.jpg.html

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 24 Mar 2018 09:57

ware waaaaa !! This is what we were all waiting for.....

Draft Defence Production Policy 2018- Invite for Comments
Govt of India has announced in the General Budget 2018-19 that the
Govt will bring out an industry friendly Defence Production Policy 2018
to promote domestic production by public sector, private sector and
MSMEs. In pursuance of the above, the Govt. has formulated a draft
Defence Production Policy 2018 which is placed below.
It is requested to provide your comments on the draft policy at dirpncddp@nic.in
latest by 30.03.2018


http://ddpmod.gov.in/sites/default/files/Draft%20Defence%20Production%20Policy%202018%20-%20for%20website.pdf

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ShauryaT » 24 Mar 2018 19:04

The skepticism of another document.
Another MOD document that means little?
MOD released for public scrutiny and for potential stakeholder comments from industry a draft Defence Production Policy (DProdP) 2018 on Thursday, March 24. It was met with less enthusiasm than weariness by private sector firms who have gone through such rigmarole previously to be excited. After all, the Defence Procurement Procedure 2016 remains unimplemented. So what chance that the DProdP will meet its deadline of 2025 for realization of its amply ambitious aims of making India one of the “top five countries in Aeropace and defence industries”, self-reliant in development and manufacturing” of 17 leading conventional weapons systems, including fighter aircraft, medium lift and utility helicopters, warships, land combat vehicles, autonomous weapons systems, missile systems, gun systems, small arms, ammunition and explosives, surveillance systems, electronic warfare systems, communications systems, night fighting enablers, reaching an annual turnover level of Rs 1,70,000 crores or $26 billion in “defence goods and services” including, presumably, Rs 35,000 crores in arms exports and also, as the document says, “making India a global leader in cyberspace and AI systems”?

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 27 Mar 2018 00:45

Nitin Gokhale interviews Lt. Gen. Nimbhorkar the Master General of Ordnance and clears up a lot of FUD about ammo supply etc. and fast track of procurements due to MoD Procurement reforms and setting up base repair stations for the helicopters.

http://bharatshakti.in/dont-panic-the-a ... projected/

Please read and share the optimism.

For the first time since the Kargil conflict in 1999, the Indian Army’s ammunition stock, inventory of spares and maintenance of its existing crucial equipment is up to date, thanks to a combination of emergency procurement and revamped management system......


For nearly 12-13 years after Kargil, the management of ammunition and spares in the three forces was tardy and below par, resulting in accumulated shortages. The reality began to bite in the immediate aftermath of the Uri attack and the surgical strikes in Pakistan-Occupied Kashmir (PoK) in September 2016.

That’s why in late 2016, the Army signed 19 major contracts worth Rs 11,000 crore to replenish about 10 different types of ammunition. Deliveries in three of the bigger contracts have been completed and 13 others would complete the supply progressively by end of the current calendar year, defence sources have revealed. Similarly, the Indian Air Force and Indian Navy too bought ammunition and spares worth over Rs 10,000 crores to make up for years of neglect and indecision.

Additionally, over 75 contracts to buy and stock crucial spares for different equipment worth over Rs 15,000 crore (to be spent over the next four years) have been signed by the Army in 2017-18. These two measures alone have ensured that ammunition stock is up to date and almost 95 per cent of crucial equipment and platforms like Type A vehicles (armoured personnel carriers, army air defence platforms), all guns, UAVs and LORROS–Long-Range Reconnaissance and Observation System–and even general vehicles are on road that is they are serviced and ready for use whenever required. Earlier, at least 40 per cent of these platforms used to be ‘off-road.

Similarly, a decision to establish two MRO (maintenance, repair and overhaul) hubs for the Army’s fleet of Advance Light Helicopters (ALH) at Mamun and Missamari has ensured that at least 65 to 70 per cent of the fleet is now available to fly any time against just about 30 to 35 per cent before 2015 because the helicopters had to be sent to Bangalore or the maintenance staff had to travel the long distance to the bases spread across Northern and Eastern Commands.
....
This has been made possible, according to Lt Gen RR Nimborkar, the Army’s Master General Ordinance (MGO), because of improved coordination and synergy between the MoD and the Army’s decision-makers. The MGO – the man in-charge of ensuring all the in-service equipment held by the entire Indian Army is in top shape – speaking to BharatShakti.in pointed out that for the first time in years, the entire annual budget of over Rs 15,000 crores that his branch handles has been spent even before the financial year has ended. “Thanks to clear directions of the Army Chief Gen Bipin Rawat and quick decision-making by the current defence secretary Mr Sanjay Mitra and his team, we have managed to retrieve the dire situation that we faced for over a decade. This has been made possible because of optimum use of resources and simplification of procedures”, Lt Gen Nimborkar said.

He pointed out to decentralization of financial powers and emphasis on sourcing more equipment and stores from indigenous sources, thanks to the decision made by former defence minister Manohar Parrikar and continued to be supported by the incumbent minister Nirmala Sitharaman, has resulted in improved efficiency.


For example, earlier even a simple decision to buy light utility vehicles for the Army had to go to the MoD which meant the entire process used to take a minimum of two years. Now thanks to decentralization, service HQs are able to procure them in six months!

Similarly, the decision to source ‘non-core’ items from the local suppliers rather them buying them through the Ordnance Factory Board (OFB) as was done earlier, is resulting in massive saving. Over 80 items like berets, caps, socks, belts, sweaters, sports shoes etc. are now being directly bought from the market. Earlier, OFB used to source these items from the market and used to sell it to the forces at a higher price. For instance, the common combat uniform worn by all the troops was costing the organization four times the market cost! Today thanks to direct sourcing, best quality light rucksacks, knives, sports shoes, track suits and uniform, is being made available to the troops at a much lesser cost. The likely saving: Nearly 1200 crores a year!

{This is called burden rate on procured items. The OFB machine has to charge the burden rates regardless of who makes the item. }



Digitization of records and inventory has now allowed the top leadership, including the Army Chief, Vice Chief and the MGO, to have a 360 degree view of equipment availability, the MGO said. “This allows us to reduce dead inventory. There have been instances in the past when we had bought spares worth tens of thousands of crores of rupees and didn’t use them. In some cases, these spares were not even opened and have now become dead stock since the equipment they were meant for have been retired from service,” Lt Gen Nimborkar revealed. Keeping these examples in view the current Army Chief has issued a directive to reduce unnecessary and excessive procurement. “We now follow a ‘just in time’ model of keeping spares which means only absolute minimum number of spares will be kept in stock,” the MGO revealed.

As mentioned earlier, the beginning of the turnaround dates back to end-September 2016. A thorough stock taking then revealed that some of the critical ammunition was down to less than a day’s stock and some others were dangerously low. For instance, Anti-tank ammunition called armour-piercing, fin-stabilised, discarding sabot (APFSDS) was completely out of stock, while ammunition for Smerch system and Konkurs missiles was down to two days of supply.

So teams were dispatched to friendly countries with authorization to sign contracts on the spot. Simultaneously, all the three vice chiefs were authorized to ensure that all ammunition and spares needed to fight ten days of intense war is always kept in stock. Called the 10i (ten days of intense war fighting) scheme, the three vice chiefs have made sure between September 2016 and now, all the procurement have been done to meet that requirement. From here on, all measures to build on the long term plan to equip the military for a 30-day war, will continue apace.

....The government will have to find ways to augment the necessary budget if it wants to ensure that the military remains in top shape and ready for the twin challenges it faces from Pakistan and China.


Interesting that these flaws were not revealed in all those Parliament reports or CAG audits or motivated leaks by disgruntled people.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Manish_P » 27 Mar 2018 11:30

Great article

Ramana ji, some parts were known (from previous CAG reports IIRC, and highlighted on BRF forums). For example the high price paid by OFBs towards purchase of equipment like shoes, clothing etc

What was missing perhaps was a whole 360 degrees picture

Great to see that it is on it's way to being made available to the powers-that-be in the GOI, the MOD, the services themselves etc

Just need to be very very careful about data security

My colleagues were part of a team which is building a product for the military. Recently they had presented the alpha and then the beta version of the product to a very high level comittee of the services. The product itself is being tested extensively by the concerned branch of the services but my colleagues (who were not really familiar with the military environment) were really glad and impressed to see how much importance the senior-most chiefs and each and every senior officer was giving to the robustness of data security, access levels, encryption, masking, disinformation, destruction etc. Was really an un-nerving experience for some of the spoilt guys from our side to face the polite, smiling but steely eyed military men who didn't give any prior hint of their knowledge on the subject :D

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Rakesh » 27 Mar 2018 23:27

Finance ministry shoots down MoD’s proposal for “non-lapsable defence modernisation fund”
http://ajaishukla.blogspot.ca/2018/03/f ... -mods.html

BJP govt shoots down a BJP proposal, first budgeted in 2004 by Finance Minister Jaswant Singh.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 10 Apr 2018 10:05

https://mod.gov.in/sites/default/files/scan123.pdf

details of firms debarred/put on hold/suspended etc from doing business with MoD as on 4th april 2018

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 10 Apr 2018 10:22

ShauryaT wrote:The skepticism of another document.


IMO, this means a lot..
because MOD/MRM can take many decisions boldly.
If some upavasi start barking, then they can say why dint you comment when there was opportunity..


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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 23 Apr 2018 18:00

https://defproc.gov.in/nicgep/app;jsess ... lUMAVAo%3D

Government e-Procurement System -PSU’s under Ministry of Defence
IMPORTANT NOTICE TO BIDDERS ON e-TENDERING

The Government e-Procurement system has successfully rolled out the e-bid submission TenderingSystem through its web site of various Departments have been uploaded, their bids submitted and the same havebeen opened on line. Bids for various tenders published in the web site of Departments can be submitted onlineby enrolling with the above mentioned web site.

The bidders can enroll themselves on the website using the option “Click here to Enroll”. Thisenrollment is free at this point of time. Possession of a Valid Class II/III Digital Signature Certificate (DSC)in the form of smart card/e-token in the Company's name is a prerequisite for registration and participating inthe bid submission activities through this web site. Digital Signature Certificates can be obtained from theauthorized certifying agencies, details of which are available in the web site under the link “Information aboutDSC”.

The web site also has user manuals with detailed guidelines on enrollment and participation in theonline bidding process. The user manuals can be downloaded for ready reference. Vendors can also attend thetraining/familiarization programme on the e-tendering system conducted periodically by the e-Procurementsystem in association with NIC.

Advantages of E-Tendering System

The bidders will be able to see the status of the tenders for which they have submitted quotes indifferent stages and would also be informed of the status by E-Mail. For the bidders who have registeredthemselves on the website through the “Stay Updated” option, information of all the tenders for which they areinterested to participate will be sent by E-MailPlease note that all the departments of e-Procurement system are gradually switching over to e-Tendering system in a phased manner. All the tenders in future will be issued only through the e-Tendering system and only registered vendors will be allowed to participate in the tendering process.

Administrator,
Government e-Procurement System

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby JayS » 23 Apr 2018 18:15

ramana wrote:Nitin Gokhale interviews Lt. Gen. Nimbhorkar the Master General of Ordnance and clears up a lot of FUD about ammo supply etc. and fast track of procurements due to MoD Procurement reforms and setting up base repair stations for the helicopters.

http://bharatshakti.in/dont-panic-the-a ... projected/

Please read and share the optimism.


Interesting that these flaws were not revealed in all those Parliament reports or CAG audits or motivated leaks by disgruntled people.


Shows the importance of delegating powers to the right positions and giving autonomy to complete the triangle of responsibility, accountability and Authority at one place.

I remember when we were bidding for a small work package for IN, the cost had to be kept below 5lac as otherwise it would go to Delhi for clearance. Below 5lac was within IN Mumbai's power. We have come a long way from there.


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