GeM will likely add works procurement for ministries
Premium- Move aims to improve transparency, lower costs, and cut time needed for public procurement
The Government e-Marketplace (GeM) may procure works for ministries, departments, and government organizations, adding a lucrative business strand to the goods and services it already procures, two government officials aware of the development said.
India’s works procurement accounts for around ₹10 trillion. The move aims to improve transparency, lower costs, and cut the time needed for public procurement at GeM.
According to a draft cabinet note for expanding GeM’s special purpose vehicle (SPV) circulated by the ministry of commerce and industry, procurement of work contracts through GeM may be kept optional for at least one year, after which it may be made mandatory.
“It is proposed that the procurement of work contracts through GeM may be kept optional for at least one year post the go-live of the portal, till the platform stabilizes. The decision for making the procurement of works through GeM mandatory will be taken in due course, in consultation with the department of expenditure," said the note reviewed by Mint. The cabinet is set to consider the proposal shortly.
“Whether the centralized procurement through GeM (for works procurement) be made mandatory is being studied, and a policy decision will be taken," said a senior government official cited above requesting anonymity.
The GeM portal also plans to have templates for bid documents across work contract categories, automated pre-qualification assessment, automated commercial evaluation, supplier ratings and past performance statistics, price discovery and benchmarking, and post-contract management. The proposal also entails adding 80 new posts in addition to the 66 permanent positions in GeM and a project management unit (PMU) for GeM Works. This assumes significance given that India’s total procurement of goods, services and works is estimated to be around 15% to 20% of the country’s GDP. Of this, works procurement -- which is related to infrastructure projects such as roads and highway contruction -- accounts for at least ₹10 trillion.
The gross merchandise value (GMV) of GeM is expected to cross Rs1 trillion in the current financial year, with the platform helping in substantial savings for the government.
The plan is to improve efficiency by bringing in parallel work procurement portals run by the Central Public Procurement Portal (CPPP), which is also used by ministries such as road transport and highways, defence, the governments of Uttar Pradesh, Maharashtra, and state-run firms such as Indian Oil Corp. and Bharat Heavy Electricals Ltd. Also tapped will be independent portals run by ministries such as railways, housing and urban affairs and home affairs, state governments of Gujarat and Karnakata and CPSEs such as Oil and Natural Gas Corp. and Hindustan Petroleum Corp. Ltd (HPCL). All of these will be housed under one unified procurement system for all government procurement. Queries emailed to a spokesperson for the ministry of commerce and industry on Saturday afternoon weren’t answered until publishing this story.
The second government official cited above said the transition for works will be easier than that for goods, which saw a move from a manual system of tenders. “The CPPP is traditional, and GeM is modern. The tender portal under GeM is optional at the moment. It’s a question of converting the systems into a more standardized system," the official said.
The Economic Survey 2021-22 noted that anecdotal evidence suggested that the e-marketplace has resulted in a substantial reduction in government procurement costs, with average prices falling by at least 15-20%, up to 56%.
dilasha.seth@livemint.com
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