Capital acquisition deliveries of domestic manufactures extended by four months due to COVID-19

Issue: 5-6/2020

On June 12, 2020, the Ministry of Defence (MoD) announced that it had extended the delivery period for all existing capital acquisition contracts with the Indian vendors by four months due to supply chain disruptions arising out of COVID-19 pandemic. The order issued by the acquisition wing of the MoD, duly approved by Raksha Mantri Rajnath Singh states, “Force Majeure shall be applicable for a period of four months i.e. March 25, 2020 to July 24, 2020.” The order adds, “Duration of this Force Majeure will be excluded while calculating the delay in delivery of contracted equipment/service and imposition of Liquidated Damages charges.” With respect to the foreign vendors, they can approach the MoD which may consider cases on the basis of the situation prevailing in their respective countries.