New Delhi: In the wake of coronavirus locckdown, the Ministry of Defence on Friday announced it has extended the delivery period for existing capital acquisition contracts with Indian vendors by four months due of supply chain disruptions.
An order from the ministry’s acquisition wing, and approved by defence minister Rajnath Singh, noted that “force majeure shall be applicable for a period of four months i.e. 25th March 2020 to 24th July 2020,” the defence ministry said in a statement.
Force majeure refers to unexpected circumstances that prevent someone from fulfilling a contract.
The duration of the force majeure will be excluded while calculating the delay in delivery of the contracted equipment or service and imposition of liquidated damages charges, it said.
“This measure would bring a big relief to the domestic defence industry whose production schedules have been adversely affected by the Covid-19 situation,” it added.
The ministry order, however, adds that the Indian vendor is free to deliver the contracted items well within the extended delivery period.
Further, as per 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 ministry which may consider cases on the basis of the situation prevailing in their respective countries.