Government extends delivery period of all capital acquisition contracts in view of COVID-19

NEW DELHI: The defence ministry on Friday said that it has extended the delivery period of all capital acquisition contracts with Indian vendors by four months due to supply chain disruption arising out of the COVID-19 pandemic.

The ministry’s acquisition wing on Friday issued an order, approved by Defence Minister Rajnath Singh, to this effect. It 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.”


The Finance Ministry in a circular issued last month and in February has clarified that supply chain disruption due to the spread of COVID-19 in the country will be considered in the Force Majeure clause of public procurement contracts.

This measure would bring a big relief to the domestic defence industry, whose production schedules have been adversely affected by COVID-19 situation, the ministry said.

“Interim and final delivery period of the stage of the contract that is affected by the lockdown will stand extended by four months without imposition of any charges,” the order says.

However, it adds that the Indian vendor is free to deliver the contracted items well within the extended delivery period. According to the order, no separate contract specific amendments are required to be made to give effect to this decision.

Foreign vendors can approach the ministry, which may consider cases on the basis of the situation prevailing in their respective countries.