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Public Procurement (Amendment) Order, 2017

The Government of India has amended the Public Procurement (Preference to Make in India) Order, 2017, enabling nodal Ministries/ Departments to notify higher minimum local content requirement for Class-I & Class-II local suppliers which was earlier fixed at 50% and 20% respectively.

Public Procurement (Amendment) Order, 2017

  • As per the Order, entities of countries which do not allow Indian companies to participate in their Government procurement for any item, shall not be allowed to participate in Government procurement in India for all items related to that nodal Ministry/ Department, except for the list of items published by the Ministry/ Department permitting their participation.
  • Specifying foreign certifications/ unreasonable technical specifications/ brands/ models in the bid document is restrictive and discriminatory practice against local suppliers.
  • Foreign certification, if required, shall be stipulated only with the approval of Secretary of the Department concerned.
  • All administrative Ministries/Departments whose procurement exceeds Rs. 1000 Crore per annum shall notify their procurement projections for the next 5 years on their respective website.
  • An upper threshold value of procurement beyond which foreign companies shall enter into a joint venture with an Indian company to participate in government tenders shall be notified.

What is GeM?

  • Government e-Marketplace (GeM) is a one stop portal to facilitate online procurement of common use Goods & Services required by various Government Departments / Organisations / PSUs.
  • GeM aims to enhance transparency, efficiency and speed in public procurement.
  • It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users achieve the best value for their money.
  • All Central government and State Government Ministries/Departments including its attached/subordinate offices, Central and State autonomous bodies, Central and State Public Sector Units and local bodies etc. are authorised to make procurement through GeM portal.

Benefits of GeM 

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 organisation, paying authorities as well as sellers.
  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 standardised on GeM.   These would make GeM an extremely powerful tool in the hands of Government organisations 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.
  4. 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.