The Indian Defence Procurement Organisation have the following bodies -
1. Defence Acquisition Council (DAC)
2. Defence Procurement Board (DPB)
3. Defence Production Board (DPB)
4. The Defence R&D Board.
Defence Acquisition Council (DAC)
Defence Acquisition Council was constituted in August, 2001. DAC is the highest body headed by the Raksha Mantri (Defence Minister) which oversees the entire acquisition process for the Armed Forces. It approves the long-term perspective plans and accords the acceptance of necessity in each case of capital acquisition. This process of according the Acceptance of Necessity (AON) involves categorization of items into “Buy”, “Buy & Make” and “Make”. This process of approving the categorization is the starting point of the acquisition process. Decisions that follow from here are implemented under the overall supervision of DAC by the Defence Procurement Board, Defence Production Board and the Defence R&D Board.
Defence Procurement Board (DPB)
The Defence Procurement Board is the body which oversees all activities related to procurement on capital account in the Department of Defence flowing out of the “Buy” and “Buy & Make” decisions of the DAC. It functions mainly as a coordinating, supervising and monitoring body for the procurement process undertaken by the Acquisition Wing of the Department of Defence for the “Buy” and “Buy & Make” categories. In this process, it has the responsibility of approving the Annual Acquisitions Plans for the three Services. It essentially accords approvals to all major projects which are beyond the powers of the Raksha Mantri and require the approval of CCS or the Minister of Defence and Minister of Finance. Its functioning is governed by the Defence Procurement Procedure (DPP), which was modified in the year 2006. The Defence Secretary is the Chairman of this Board. Its Members include representatives from the various Departments in the Ministry of Defence, the three Wings of the Armed Forces, Chief of Integrated Defence Staff and the Member Secretary is the Financial Advisor in the Acquisition Wing of the Department of Defence.
Defence Production Board
Defence Production Board is a body, which is tasked to oversee indigenous manufacture and it derives its powers from the direction given by the DAC in respect of the categories of “Make” and “Buy & Make”. It is expected to closely monitor the “make” projects, advise the DAC on policy issues regarding licensed production, ToT and new development projects. Its membership is very similar to the Defence Procurement Board with the exception that the Chairman OFB and some CMDs of the DPSUs are also included. The Member Secretary of the Defence Production Board is the Director, Planning & Coordination, in the Department of Defence Production.
Defence R&D Board
The Defence R&D Board has been constituted essentially to monitor and report on indigenous R&D proposals flowing out of the “Buy & make” and “Make” decisions of the DAC. It is a body that is expected to work closely with the Defence Production Board and to ensure that the transfer of technology from the laboratory to the factory is done in the most effective manner. The Chairman of this Board is the Scientific Advisor to RM and Secretary, R&D. Its Members are similar to the other two Boards with the exception that certain distinguished scientists have been included. The Member Secretary of this Board is the Chief Coordinator, R&D, in the DRDO Headquarters.
The Acquisition Wing of MOD/DOD
The Acquisition Wing of the Deptt. of Defence is the main secretariat that provides the necessary inputs to the Defence Procurement Board. This wing is headed by an officer of the rank of Special Secretary or Addl. Secretary and is assisted by Financial Adviser (Acquisition) in the rank of Addl. Secretary and three Acquisition Managers, three Technical Managers and three Financial Managers, dealing with Land systems, Air and Maritime & Systems respectively, all in the rank of Joint Secretary.
The Acquisition Wing essentially deals with cases, which have been categorized as “Buy” or “Buy & Make”. The guiding principles of procurement through the Acquisition Wing are contained in the notified Defence Procurement Procedure 2006.
Current Acquisition Practices
Presently Acquisition in MOD can be clearly demarcated into two separate sections. Firstly, the proposals being dealt with by the Acquisition Wing of the MOD, which is essentially functioning as a Procurement (Buying) Agency of MOD and therefore deals only with “Buy” and “Buy & Make” category of items. The second section is dealing with the “Make” category, which is essentially an acquisition process, akin to the acquisition procedure followed in major weapon producing countries.