Prashant Gogia asked: Is the Fall Clause applicable to direct purchase/urgent procurement and purchase requisition on GeM?

Amit Cowshish replies: The standard format of Request for Proposal (RfP) given in the Defence Acquisition Procedure 2020 (DAP 2020) includes the Fall Clause. This clause requires the bidders to submit a written undertaking as a part of the technical offer that they have not supplied, or are not supplying, similar systems or subsystems at a price lower than that offered in the present bid to any other ministry or department of the Government of India. If similar systems or subsystems have been supplied at a lower price, information regarding the cost, time of supply and quantity, etc. is to be furnished as a part of the commercial offer.

Unless decided otherwise by the Ministry of Defence (MoD) or the Service Headquarters (SHQ) concerned, depending on within whose powers the proposal falls, this clause is to be included in all RfPs issued for procurement of defence materiel under various procurement categories defined in DAP 2020. This would also apply to urgent procurements. This clause can also be stipulated as an additional condition for purchase through the government e-marketplace (GeM) portal, if decided by the MoD/SHQ.

To encapsulate the scattered provisions concerning the Fall Clause in DAP 2020, the procuring authority has the discretion to include or exclude the Fall Clause while finalising the RfP based on various considerations such as the type and complexity of the equipment to be procured and operational imperatives.

Posted on 25 August 2021

Views expressed are of the expert and do not necessarily reflect the views of the Manohar Parrikar IDSA or the Government of India.