Big Relief: MoD Extends Capital Acquisition Deliveries of Domestic Manufactures

The Ministry of Defence (MoD) has now extended the delivery period for all existing capital acquisition contracts with the Indian vendors by four months because of the supply chain disruptions arising out of covid-19 pandemic.

Now an order to this effect has been issued today (June 12, 2020) by the acquisition wing of the Ministry, duly approved by Raksha Mantri Shri Rajnath Singh. It states that, “Force Majeure shall be applicable for a period of four months from 25th March 2020 to 24th July 2020.”

The order further added, “Duration of this Force Majeure will be excluded while calculating the delay in delivery of contracted equipment/service and imposition of Liquidated Damages charges.”

It is to be noted that this measure would bring a big relief to the domestic defence industry, whose production schedules were adversely affected by covid-19 situation. However, the MoD order, said that the Indian vendor is free to deliver the contracted items well within the extended delivery period.

According to the order, no separate contract specific amendments are required to be made to give effect to this decision. With respect to the foreign vendors they can approach the MoD which might consider cases on the basis of the situation taking place in their respective countries.

Credit: PIB