Lok Sabha Question No. 185 (STARRED), answered on 2017-07-28
Subject: Manufacturing of Ammunition
Ministry: DEFENCE
Asked by: ANANDRAO  ADSUL, Shrirang Appa Barne

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK  SABHA STARRED QUESTION NO.185

TO BE ANSWERED ON THE 28 TH  JULY, 2017

## MANUFACTURING OF AMMUNITION

*185.  SHRI  ANANDRAO ADSUL: SHRI  SHRIRANG APPA  BARNE:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) whether the Government has formulated a policy to set up manufacturing units in collaboration  with  Indian  firms  /  Companies  and  foreign  vendors  to  meet  the  defence requirement  of  the  country  and  if  so,  the  details  thereof  along  with  the  names  of  the private companies which have collaborated with foreign vendors for the purpose;
- (b) whether  private  companies  have  been  permitted  to  tie  up  for  manufacturing ammunition with foreign vendors / companies which have been black listed / banned for wrong doings / corrupt practices and if so, the details thereof and the reasons therefor;
- (c) the names of the companies / vendors along with the reasons for which these have been banned and the circumstances under which these have been allowed to manufacture ammunition;
- (d) whether ammunition for which tender has been given to the black listed / banned vendors  /  companies  are  also  easily  available  from  other  non-black  listed  vendors  / companies; and
- (e) if  so,  the  details  thereof  and  the  response  of  the  Government  thereto  and  the measures taken by the Government to recover penalty from foreign vendors / companies which adopt wrongful business practices while bidding for Indian contracts?

## A    N    S    W    E    R

MINISTER OF DEFENCE                                            (SHRI ARUN JAITLEY)

j{kk ea=h

¼Jh v#.k tsVyh½

(a) to (e): A Statement is laid on the Table of the House.

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## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  LOK SABHA STARRED QUESTION NO. 185 FOR ANSWER ON 28.07.2017

(a) The Government has finalised the policy on Strategic Partnerships in the  Defence  Sector.  The  Policy  on  Strategic  Partnership  is  intended  to institutionalise  a  transparent,  objective  and  functional  mechanism  to encourage  broader  participation  of  the  private  sector,  in  addition  to Defence  Public  Sector  Undertakings  (DPSUs)  /  Ordnance  Factory  Board (OFB), in manufacture of major defence platforms and equipment, such as aircraft, submarines, helicopters and armoured vehicles. The selection of private companies under this policy has not yet been made. (b) to (e): The Government has approved a proposal for manufacturing of ammunition  for  Indian  Army  by  Indian  Industry.  Request  For  Proposal (RFP) under Open Tender Enquiry for the said proposal has been issued on 25 th & 27 th March 2017. Since the proposal is presently at RFP stage, grant of  permission  to  any  private  company  for  manufacturing  ammunition  in partnership with foreign vendors/ companies which have been black listed/ banned for wrong doings/ corrupt practices, does not arise. Defence  Procurement Procedure  (DPP) /Defence  Procurement Manual (DPM) contains penal provisions in Standard Clauses of Contract  for  use  of  undue  influence  including  engagement  of  Agents unauthorisedly by the Seller. DPP/ DPM also provides for execution of a Pre Contract Integrity Pact (PCIP) with the objective of ensuring that the  procurement process is free from any  wrongful business practice. PCIP is a binding agreement between the bidder and the Government. The  selected  vendor  is  also  required  to  submit  an  Integrity  Pact  Bank Guarantee  (IPBG)  alongwith  the  PCIP.  Violation  of  PCIP  can  result  in calling  off  the  negotiations,  cancellation  of  contracts,  encashment  of bank guarantees and debarment from future procurement.

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