Guide 04 Procurement and tendering
What changed in the Defence Procurement Manual 2025 (DPM 2025)
The Defence Procurement Manual 2025 governs revenue procurement, spares, repairs, refits and services, for the three Services and other Ministry of Defence establishments. Released on 23 October 2025 and effective from 1 November 2025, it replaced DPM 2009 and relaxed several rules, from liquidated damages to limited tender limits, that affect suppliers directly.
- Topic
- Procurement and tendering
- Checked
- 23 September 2026
- Sources
- 2
- Questions
- 6
01
What DPM 2025 covers and when it applies
DPM 2025 is the Ministry of Defence manual for revenue procurement, worth roughly Rs 1 lakh crore a year, covering goods and services bought by the Army, Navy and Air Force and other Ministry of Defence establishments outside the capital acquisition process. It replaced DPM 2009 and added chapters on indigenisation, ICT procurement and consultancy services.
RFPs issued on or after 1 November 2025 follow DPM 2025. A case where the RFP was issued up to 31 October 2025 continues under DPM 2009 as amended, unless that RFP is retracted and reissued on or after 1 November 2025, in which case the reissued RFP follows DPM 2025. Check the RFP's issue date before assuming which manual applies.
02
Liquidated damages, relaxed
DPM 2025 relaxed liquidated damages for late delivery across the board, and gave indigenisation contracts a materially lower rate. Your own contract's LD clause still governs what actually gets deducted, so read it before quoting a delivery period that cannot be held.
Liquidated damages under DPM 2025
- General contracts
- Maximum 10 percent, levied only for inordinate delay
- Indigenisation contracts
- 0.1 percent per week, instead of the 0.5 percent per week that applies elsewhere
03
Limited tenders, assured orders and the PAC
Under DPM 2025, a Limited Tender Enquiry, sent to selected registered vendors rather than advertised openly, can be used for purchases up to Rs 50 lakh, and only in exceptional cases beyond that. Being on a buyer's registered vendor list matters directly for smaller-value revenue work as a result.
For items developed under indigenisation, DPM 2025 includes provisions for assured orders running up to five years and beyond, alongside the lower liquidated damages rate above. It also kept the Proprietary Article Certificate's initial validity at two years while redefining the rules for procurement on that basis, and removed the old requirement for Service buyers to get a No Objection Certificate from the erstwhile Ordnance Factory Board before procuring from other sources.
04
Ship and aviation repair: the 15 percent growth-of-work provision
DPM 2025 lets buyers make an upfront provision for 15 percent growth of work in ship repair and refit, and in repair or overhaul of aviation equipment. The Ministry of Defence describes this as reducing downtime, because extra work found once equipment is opened up no longer needs to restart the approval process from zero; it can be covered within the provision already built into the contract.
This matters most to marine and aviation repair contractors, where the true extent of wear or damage is rarely known until a hull, shaft or engine is actually opened up. Where the growth-of-work provision is exhausted, the extra work still needs its own approval, so track it against the contract's provision rather than assume it is unlimited.
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What changed in the Defence Procurement Manual 2025 (DPM 2025)
When did DPM 2025 take effect?
The Ministry of Defence released DPM 2025 on 23 October 2025, and it became effective for RFPs issued on or after 1 November 2025. It replaced DPM 2009 as the manual governing revenue procurement, worth roughly Rs 1 lakh crore a year, for the three Services and other Ministry of Defence establishments.
Which tenders follow DPM 2025 and which follow DPM 2009?
RFPs issued on or after 1 November 2025 follow DPM 2025. Cases where the RFP was issued up to 31 October 2025 continue under DPM 2009 as amended. If an older RFP is retracted and reissued on or after 1 November 2025, the reissued RFP follows DPM 2025. Check the RFP date on the tender itself.
What are the liquidated damages rules in DPM 2025?
DPM 2025 relaxed liquidated damages for late delivery: the maximum of 10 percent is levied only for inordinate delay. For indigenisation contracts, LD is 0.1 percent per week instead of the 0.5 percent per week that applies in other cases. The specific contract's LD clause still governs, so read it before quoting delivery periods.
What is the limited tender limit under DPM 2025?
Under DPM 2025, a Limited Tender Enquiry, sent to selected registered vendors instead of an open advertised tender, can be used for purchases up to Rs 50 lakh, and beyond that only in exceptional cases. This is one reason being on a buyer's registered vendor list matters for smaller orders.
Does DPM 2025 give assured orders for indigenised items?
Yes. DPM 2025 includes provisions for assured orders ranging up to five years and beyond for items developed by public or private players under indigenisation. It also caps liquidated damages on indigenisation contracts at 0.1 percent per week. Exact order quantities and terms are set case by case in the indigenisation contract.
What changed for ship repair and refit contracts in DPM 2025?
DPM 2025 lets buyers make an upfront provision for 15 percent growth of work in repair and refit of ships and in repair or overhaul of aviation equipment. The Ministry of Defence said this reduces downtime, because extra work found after opening up equipment no longer needs a fresh approval cycle from zero.
Checked against
Sources
- 01DPM 2025 key features, Press Information Bureau, Ministry of Defence
- 02Defence Procurement Manual page, Ministry of Defence
This guide explains how the system works in general, as the documents above describe it, and was last checked on 23 September 2026. Rules and thresholds change: the governing document is the authority, not this page.
On this site
Where this meets the work
- Vendor registration information for new suppliers
- Marine engineering and ship repair capability
- How indigenisation works
- Defence contract works
More in Procurement and tendering
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- Where Indian defence tenders are published, and how to bid
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- MSME benefits in Indian public procurement, and what is excluded
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