Government e-Marketplace: The National Public Procurement Portal
Government e-Marketplace (GeM) is India’s national public procurement portal, an effort to transform the legacy procurement system and revolutionize public procurement in the country. The flagship initiative, launched on 9th August 2016, serves as an end-to-end marketplace to facilitate online procurement of common use goods and services required by central and state government ministries, departments, public sector undertakings, etc. The platform has surpassed INR 68,000Cr in transaction value, working with over 6 Lakh registered sellers and covering about 49 Lakh transactions. Since its inception, GeM has achieved a momentous scale in operations by leveraging a disruptive marketplace and the use of technology, analytics, and digitization of processes. GeM has since taken many strides towards realizing inclusivity, transparency, and efficiency on the platform and has leveraged technology to bring about structural reforms.
GeM has brought transparency in public procurement of goods and services. It is an example of how a digital platform created with a strategic and clear-minded intent can bring about lasting change for the nation and the underserved. The government to business (G2B) platform offers products and services by several sellers wherein all the buyers (i.e. government agencies and departments) can then procure products and services through a transparent bidding process. This process thus enables competitive pricing and ensures that government procures more cost-efficiently. A report from the World Bank indicates an average savings of 9.75% for the period February 2019 to January 2020, with maximum savings in the top five categories ranging from 23.48% to 60.52%. This can be attributed largely to increased participation per bid and therefore, efficient price discovery.
True to its commitment as an efficient marketplace, GeM has undertaken various initiatives, especially during the Covid-19 pandemic, to soften the blow to sellers on the platform. The procurement cycle shortened for COVID-19 related items: Bid Cycle for COVID-19 related categories has been reduced to 3 days from the existing 10 days. Buyers would also be able to reduce the Delivery Period for such items to 2 days considering the time-critical nature of the items. Similarly, GeM has also actively sought to make transparent to all sellers the reason for rejecting bids. It has extended offer validity and longer delivery periods and integrated with banks/ERP systems to facilitate timely payments and bill discounting. These efforts have enabled wider seller participation; the number of product and service categories on the platform has increased by 106% and 16% respectively. Similarly, the number of sellers has increased by 67% while that of MSME sellers by 83%. Overall, the cumulative Gross Merchandise Value (GMV) has seen a considerable increase of 75% from INR 32,942 Crore to INR 57,516 Crore.
GeM 4.0 will offer an array of process enhancements and features that large buyers such as Railways, Defense, and CPSEs prefer. Various enhancements in Catalog Management System include adding new specifications in categories, adding special terms and conditions at category level, and uploading engineering drawings during the creation of bids. Software processes for ushering in GeM 4.0 include features such as item wise consignee wise bidding, demand aggregation, price variation clauses, installation, testing, commissioning, and AMC/CMC bundled with product procurement, staggered delivery, timely payments to sellers, facility of publishing bids for goods and services on GeM in case of non-availability or partial availability of products and services, and one-time caution money deposit for sellers for purchase up to INR 5 Lakh. All these features are driven towards enhancing the experience of sellers and buyers on the portal.
For the first time, GeM can accurately provide information as to whether timely payments are being made to suppliers including MSMEs and startups. GeM is now moving towards deemed acceptance as timely payments to suppliers is a must for the successful development of a strong buyer-supplier ecosystem in an e-Marketplace. To promote greater discipline and timeliness in payment to vendors, it has been decided that whenever a Consignee Receipt and Acceptance Certificate (CRAC) is auto-generated or issued by a buyer and payment is not made 10 days thereafter, the buyer organization will be required to pay penal interest @1% per month for the delayed payment beyond the prescribed timeline till the date of such payment. The amount collected in this regard shall be deposited in an account maintained by GeM. This interest will not be paid to the vendors and will be kept by GeM in a separate account which will be used only for the education of sellers/ buyers etc. or other purposes related to GeM or public procurement with the prior approval of the Department of Expenditure. This will be applicable for all procurements made from October 1, 2020.
GeM is also moving towards realizing the vision of Aatmanirbhar Bharat. Recently, GeM made it mandatory for all sellers to disclose the country of origin for the products offered on the platform. This step of disclosing the country of origin in the marketplace flows directly from the implementation of the Public Procurement (Preference to Make in India) Order in line with the vision for GeM. Moreover, sellers who had already uploaded their products before the introduction of this new feature on GeM are being reminded regularly to update the country of origin. Work on this deployment had started in February 2020 and went live on 2 May 2020. GeM has also enabled a provision for an indication of the percentage of local content in products. With this new feature now, the country of origin as well as the local content percentage will be visible in the marketplace for all items. GeM has taken a significant step towards ‘Aatmanirbhar Bharat’ and is committed to serving the nation by bringing in transparency, inclusion, and efficiency in public procurement.
(Mr. Kumar is an IAS officer and the CEO of GeM. This is an edited excerpt from the article that appeared in the November 2020 edition of Sampada, the monthly magazine of MCCIA. The complete issue of Sampada can be accessed at https://www.mcciapune.com/media/Publication/Publication_File/final_Oct_-_Nov_Diwali_Issue_2020_2.pdf )