If you run an IT firm, a logistics company, or a specialized consultancy, you’ve probably looked at the Indian Defence sector and thought, “Not for me. They only buy guns, tanks, and aircraft.”
For years, you were mostly right. The Defence Procurement Manual (DPM) was written for goods. Trying to sell “services” or “expertise” to the Ministry of Defence (MoD) was like trying to fit a square peg in a round hole. Service contracts were often shoehorned into “Goods” procurement rules, leading to the dreaded L1 (Lowest Bidder) trap—where the cheapest (and often least capable) provider won, and quality suffered.
That era ended with the release of DPM 2025.
Hidden away in this massive document is a brand-new addition that changes everything for the service sector: Chapter 12.
For the first time, the MoD has codified specific rules for “Procurement of Services.” They have finally acknowledged that buying expert advice is not the same as buying spare parts.
Here is why Chapter 12 is a game-changer for your business.
1. The Death of “L1 Only”: Enter QCBS
This is the single biggest victory for quality. Under the old system, if you were a top-tier engineering consultancy competing against a “mom-and-pop” shop that quoted peanuts, you lost. The system was blind to expertise; it only saw price.
Chapter 12 changes the rules. It explicitly authorizes Quality and Cost Based Selection (QCBS) for consultancy services.
What does this mean? It means the Armed Forces can now give up to 80% weightage to Technical Capability and only 20% to Price. If you have superior domain knowledge, better past performance, or a more robust methodology, you can win the contract even if you are more expensive.
Armed Forces are no longer forced to buy the cheapest advice. They can now buy the best.
2. Defining the Opportunity: It’s Not Just “Consulting”
The manual breaks services into two massive buckets, both of which are now open for structured business:
- Consultancy Services: This is for the “Brain Power.” Think Advisory, Project Management, Engineering Services, Architectural Design, and Specialized IT studies.
- Non-Consultancy Services: This is for the “Muscle Power.” Logistics, Facility Management, Security, IT Support, Outsourcing of routine maintenance, and Training.
The market is huge. The Armed Forces are looking to shed non-core activities. They want to outsource logistics, IT management, and facility operations so soldiers can focus on fighting. Chapter 12 is the green light to make that happen.
3. Stability: The Shift to Long-Term Outsourcing
Ad-hoc contracts are a nightmare for business planning. You can’t hire staff if you don’t know if the contract will exist in six months.
DPM 2025 explicitly promotes the Outsourcing of Services on a long-term basis. This means the MoD is moving towards multi-year contracts with defined Service Level Agreements (SLAs). For an MSME, this translates to predictable revenue streams and the confidence to invest in scaling up your team.
4. The ‘Single Source’ Exception
Have a niche capability that no one else has?
Previously, we had to force a “multi-vendor situation” even if it didn’t make sense. Now, Chapter 12 provides a clear, codified path for Single Source Selection (Nomination). If you can justify that you are the only firm with the requisite expertise for a highly specialized task, the system now has a mechanism to hire you directly without the theatre of a generic tender.
The Catch: The “Paper” Wall
The opportunity is massive, but let me be clear: The process is rigorous.
Because we are moving away from L1, the scrutiny on the Technical Bid is intense. To win under QCBS, your proposal needs to be flawless.
- Your Statement of Case (SoC) must prove the necessity.
- Your Terms of Reference (ToR) must be watertight to avoid scope creep.
- Your response to the Technical Evaluation Criteria must be mapped to the specific operational needs of the user.
Writing these documents is harder than selling a product. You aren’t just selling a spec sheet; you are selling a solution.
This is where an experienced Veteran would help you.
The government wants to buy your services, but you need to know how to sell them on paper. Experienced Veterans can help companies draft the Terms of Reference and Proposals that align with these new DPM statutes, ensuring your expertise gets the score it deserves.
The door to the Defence Service Sector is finally open. Don’t stand outside just because you don’t know how to knock.
Let’s get to work.
