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A relook at defence blacklist

New policy makes a provision to do business with a blacklisted firm for support of critical spares, maintenance

November 22, 2016 03:01 pm | Updated November 23, 2016 05:02 am IST - NEW DELHI


Defence Minister Manohar Parrikar on Tuesday said the Ministry will “re-ascertain” the list of blacklisted firms.

The present list has to be re-ascertained in tune with the new policy, Mr. Parrikar said. “That does not mean they will be taken out. Don't interpret... they will be examined. What is the status, why they were blacklisted and for how many years.”

He was speaking on the sidelines of a Navy-FICCI seminar on submarines.

The new policy was approved by the Defence Acquisition Council (DAC) on November 7 and was released by the Ministry on Monday.

The list has over a dozen global companies, mostly blacklisted under the earlier UPA government.

Flexible policy

The new policy, called 'Guidelines of the Ministry of Defence for penalties in business dealings with entities', has reduced the period of blanket ban to five years from 10 years. However, the upper limit of the ban period has not been specified.

The policy makes a provision to do business with a blacklisted firm for support of critical spares and maintenance in view of national security with the approval of the Defence Minister, the designated “competent authority.”

On the grounds of “national security and operational preparedness/export obligations” if the banned entity is the “only source” to support a certain platform or system then the vice-chief of the service concerned, chief of the integrated defence staff or the additional secretary (defence production) has to sign a certificate to that effect and get the approval of the Defence Minister.

For spares and support, the policy states that, “The entity with which business dealings are suspended or banned may with the approval of competent authority, participate in the future RFPs for spares, upgrades, maintenance etc. for equipment/weapon systems supplied by it, if the firm which is the object of the contract is a proprietary item and there are no alternate sources of supply.”

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