Government e-Marketplace
gem.gov.in
Procurement Made Smart
A. Introduction:Public
procurement forms a very important part of Government activity and reform in
Public Procurement is one of the top priorities of the present Government.
Government e-Marketplace (GeM) is a very bold step of the Government with the
aim to transform the way in which procurement of goods and services is done by
the Government Ministries/Departments, PSUs, autonomous bodies etc.
B. Background:GeM
owes its genesis to the recommendations of two Groups of Secretaries made to
the Hon’ble PM in January 2016. They recommended setting up of a dedicated
e-market for different goods & services procured/sold by Government/PSUs
besides reforming DGS&D. Subsequently, the Hon’ble FM in his Budget speech for
FY 2016-17, announced setting up of a technology driven platform to facilitate
procurement of goods and services by various Ministries and agencies of the
Government.
DGS&D
with technical support of NeGD (MeitY) has developed GeM portal for procurement
of both Products & Services. The portal was launched on 9th
August 2016 by the Hon’ble Commerce & Industry Minister. Procurement on GeM
has been authorized by GFR by adding Rule 141A (DoE OM dated 3rd May
2016). Presently more than 7400 products in about 150 product categories and
hiring of transport service are available on GeM POC portal. Transactions for
more than Rs 140
Crore have already been processed through GeM.
GeM
is a completely paperless, cashless and system driven e-market place that
enables procurement of common use goods and services with minimal human
interface.
C. Benefits
of GeM to the Government, Sellers and the Indian industry and economy
1. Transparency:
GeM
eliminates human interface in vendor registration, order placement and payment
processing, to a great extent. Being an open platform, GeM offers no entry
barriers to bonafide suppliers who wish to do business with the Government. At
every step, SMS and e-Mail notifications are sent to both buyer, his/her head
of organization, paying authorities as well as sellers. Online, cashless and
time bound payment on GeM is facilitated through integration with PFMS and
State Bank Multi Option System (SBMOPS); web-services integration is being
extended to payment systems of Railways, Defence, major PSUs and State
Governments. Seamless processes and online time-bound payment, which is also
mandated by the OM issued by Department of Expenditure, has given confidence to
the vendors and reduced their ‘administrative’ cost involved in pursuing
officers for timely payment.
2.
Efficiency: Direct purchase on GeM
can be done in a matter of minutes and the entire process in online, end to end
integrated and with online tools for assessing price reasonability. For
procurements of higher value, the bidding/RA facility on GeM is among the most
transparent and efficient, in comparison to e-procurement systems in vogue
within the Government sector. For creating a bid/RA, the buyer does not need to
create his/her own technical specifications as they have been standardized on
GeM. The bid/RA can be created in a matter of minutes and finalized within a
minimum of 7 days.The bid/RA is notified via e-mail and SMS to all the eligible
suppliers; new suppliers are also notified once they get themselves registered
online on GeM and are determined as ‘eligible’ by the system. GeM bidding/RA
therefore ensures competition, fair play, speed & efficiency and leads to
proper price discovery. The reasonableness of the rates can also be confirmed
through online comparison with market price on leading e-Commerce portals. Very
soon, GeM will also start getting feeds from various other public procurement
portals in order to ensure that the same item has not been procured at a lesser
rate by any other Government agency, from the same or a different vendor.The
reasonability of price would be further strengthened by way of integration with
GSTN and ICEGATE that will enable the buyer to ascertain the price of an item
when it exited the factory gate or when it got imported into the country.
These would make GeM an extremely powerful tool in the hands of Government
organizations to plan and procure.
3. Secure
and safe: GeM is a completely secure platform and all the
documents on GeM are e-Signed at various stages by the buyers and sellers. The
antecedents of the suppliers are verified online and automatically through
MCA21, Aadhar and PAN databases. In addition, SEBI empaneled credit rating
agencies are also being used for conducting third-party assessment of
suppliers. This would further strengthen due diligence about the veracity of
suppliers wanting to do business on GeM.For high value bids/RA on GeM, an
e-Bank Guarantee is also being introduced.
GeM is a far better system than the
existing one which relies more on financial instruments (EMD in case of tenders
for large procurements only) to guarantee good conduct by the suppliers. In the
existing system, there is zero check on the antecedents of the suppliers for
small value procurements (uptoRs 1 lakh) whose cumulative value is huge across
the Government organizations. GeM does a 100% online verification of all
vendors irrespective of the value of procurement.
4. Potential
to support Make in India:On GeM, the filters for selecting
goods which are Preferential Market Access (PMA) compliant and those
manufactured by Small Scale Industries(SSI), enables the Government buyers to procure
Make in India and SSI goods very easily. Easily accessible MIS also enables the
administrators and policy makers to easily and effectively enforce the
Government regulations on PMA and SSI sourcing. After the launch of GeM it has
been noticed that several leading computer manufacturers have placed PMA
compliant products on GeM.
5.
Savings to the Government:
The transparency, efficiency and ease of use of the GeM portal has resulted in
a substantial reduction in prices on GeM, in comparison to the tender, Rate Contract
and direct purchase rates. The average prices on GeM are lower by atleast
15-20%, and in some cases even upto 56%. GeM is also doing Demand Aggregation
for items that are to be procured by various Central/State Government
Departments. Demand Aggregation is expected to further drive the prices south,
by way of standardization of specifications and economy of scale. Demand
aggregation for most of the common use goods and services is estimated to
result in annual savings to the tune ofRs 40,000 Crore per annum. If pursued to
its logical conclusion, GeM would eventually emerge as the National Public
Procurement Portal, keeping in tune with the Global best practices; most of the
OECD countries, like USA, South Korea, UK, Singapore etc, have a single NPPP
and as a result annual savings of billions of dollars are made in public
procurement, besides giving a fillip to the domestic industry.
