Ministry of Defence[Acquisition Wing Secretariat]

Subject: Guidelines for inclusion of Buyer Nominated Equipment (BNE).'

Introduction

l. Use of 'In-Service equipment' for integration as sub systems in newprocurement cases is preferred to enable standardisation, accrue advantageof existing ToT, assist interoperability, optimise training, cost reduction andreduced inventory. Such sub systems/items which are nominated by thebuyer for integration into other main equipment being procured. are termedas BNE.

2. Buyer N~minated Equipment. BNE refers to such items whichare sub-systems/systems to be incorporated into main equipment (underprocurement) or a main equipment for a platform, to meet the operationalrequirement and are already 'in service'. The term BNE, therefore, typicallyapplies to nomination of specific equipment from vendor(s) and which arenominated to be installed/integrated with the maiA equipment or platformbeing procured. In addition to the 'in service' equipment, certainequipment /weapons designed and developed for Services which have clearedUET (User Evaluation Trials) / FET and are cleared for induction may alsobe considered for BNE. Equipment which is neither in-service nor has

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cleared UET/FET shall not be recommended as BNE. However, in certaincontingencies, if any equipment which is not trial evaluated has' to' benominated as BNE then FET/UET will be carried out by respective SHQbefore nominating it as BNE in RFP.~

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.Procedure for Nominating BNE (Other than Ship Building Case~).---, :!~. -.

3. It should be ensured that BNE is limited to the minimirrn essential. . -requirement. Wherever possible, BNE lists should be stipulated'by genericSQRs and adherence to standards rather than by vendors. Necessarytesting of such equipment may be conducted by Service. The followingguidelines will be adhered to while processing Statement of Case (SoC) foraccord of AoN for the case where BNE is to be incorporated:-

(a) SaC processed for obtaining AoN of main equipment shouldclearly bring out the quantity of BNE required, name/make, theirsource(s) & approximate cost and must be accordingly mentioned inApproval Sought.

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(b) While nominating BNE items it would be ensured by SHQ thatthe supplier/ O'Elvlof the BNE item provides firm details on:-

(i) Basic Cost of the BNE item, which would be same for allvendors. RFP should require vendors to indicate cost of eachBNE item separately.

(ii) Procurement of BNE items from OFB will be governed byprovisions of Para 84 of Chapter II DPP-2016.

(iii) Time required for delivery on placement of orders.

(iv) Arrangements for demonstration of BNE equipment tomain equipment vendors, if required before bid submission bythem.

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(c) Detailed interaction between BNE vendor(s) and vendors of mainequipment to whom RFP is to be issued must be ensured before bidsubmission to clarify responsibilities regarding integration and issuesas mentioned at Para 3(b) above.

(d) The details of BNE including specifications & source will beindicated in the RFP. In case proposed BNE items can be procuredfrom Indian OEMs, the list of vendors may not include foreign vendors.

4. Ship Building Cases. The following will apply to Defence ShipBuilding cases under Chapter IV of DPP-2016:-

(a) In ship building. cases, the procurement of equipment isgoverned by Para 39, 40~'41, 42, 45, 64 & 70 of Chapter IV of DPp·2016.

(b) Weapons & Related Sensors System. In cqse..· of amultiveridor scenario, relevant details shall be brought' out in the SoCfor weapons & related sensors nominated on Single VendOt 'hy SHQ,the procedure of obtaining DAC approval as per Para\.o42of .ChapterIV, DPP·2016 will be followed.

(c) ! For other equipment the following guidelines will be adhered to:-

(i) Single Vendor Equipment. Equipment in this categoryis of complex high grade Mil-spec nature, integral to the designof the ship and is core to the performance of the warship inits envisaged role. Vendors for such equipment shall be vettedby a 'Single Vendor Committee' 'in accordance with Para 45Chapter IV, DPP 2016 for Nomination cases and Para 70Chapter IV for competitive cases. The details of such items shallbe included in the SoC.

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(ii) Limited Vendor Base Items. Complex systems with SHQdefined Statement of Technical Reuirements (SOTRs), wherethere is a limited vendor base, fall in this category. The limitedvendor list for these critical equipment/ systems of the ship isprepared by the SHQ and items are being procured. byshipyards. In case such items can be procured from IndianOEMs on competitive basis, the list may not include foreignvendors. This vendor list may be updated regularly.

(iii) Open Tender/Shipyard Vendor List. Low technology/wide production base marine items and other basic COTSequipment falls in this category. The broad/ technicalspecifications are provided by the SHQ and the shipyardsprocures these through their procurement procedure. Suchitems shall not be part of BNE.

5. Any exception or modification to this procedure should be specificallybrought out in SoC to be approved by AoN according authority.

6. This issues with the approval of Defence Secretary.

CISC

AS(J)

JS&AM(LS)

JS{Army)

FM(LS)

TM(LS)

VCOAS

AS(DP)

JS&AM(MS)

JS(Navy)

FM(MS)

TM(MS)

'1'\ I'<j

(Praveen Kumar)Director(Acq)

Telefax: 2379 2865

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VCNS

AS&FA(Acq)> -

JS&AM(Air)

JS(Air) ,FM(Air)

TM(Air)

VCAS DG(CG)

CCR&D(PC&SI) .

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MoD ID No. 1(13)jD(Acq)j 16 dated 30.06.2017

Copy to.-(i) PS to RM(ii) SO to Defence Secretary(iii) PPS to Secretary(DP)(iv) PPS to Secretary(R&D)(v) PPS to FA(DS)(vi) PS to DG(Acq)