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INDIA'S GOVERNMENT E-MARKETPLACE: MAKING PROCUREMENT SIMPLE!

IBEF, Knowledge Centre

Sep 14, 2018 17:43

The Government e-Marketplace (GeM) is a national public procurement platform in India that was launched about two years back, in August 2016. Till date, the platform claims to have transacted over US$ 1.45 billion worth of Gross Merchandise Value (GMV) via more than 6 lakh transactions. It leverages technology 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 of their money. Being paperless, cashless and contactless platform giving end to end solution, there are 3000 plus orders placed on GeM every day across India. On an average, 450 bids are raised daily to procure goods as wide ranging as automobiles to mobile phones and services from floral services to annual maintenance contracts.

Over 40,000 buyers and sellers have need trained so far to seamlessly operate the platform. The portal was developed by the Directorate General of Supplies and Disposals (DGS&D) with technical support of NeGD. Overall, the platform is managed by fintech startup Intellect Design Arena and ecommerce major Infibeam. GeM program was further transformed in January 2018 when the launch of its 3.0 version. GeM 3.0 offers standardised and enriched catalogue management, powerful search engine, real time price comparison, template-based Bid and RA creation, demand aggregation, e-EMD, e-PBG, user rating, advanced MIS and analytics. “The idea is to streamline the procurement of goods and services making it an easier, go-to portal for sellers and service providers”, according to Ms Radha Chauhan, CEO, GeM.

“GeM 3.0 has undergone a digital transformation with superior technology and ability to scale from the previous version. This will bring together many sellers and service providers for products and services across the country under one roof, truly making it a digital tool of empowerment and entrepreneurship. This initiative gives a huge uplift for growth of MSME’s, manufacturers & service providers”, she adds.

Some notable enhancements in the 3.0 version are market based generic requirements across all government agencies, standardisation of specifications of both products and services enabling empirical price comparability, completely transparent transactions across all ranges, generic standards established through universal service levels and cost comparison enabled and open and dynamic marketplace with rating based on performance of user on website.

Benefits so far

The platform has successfully provided access to more than 4.2 lakh products, using a network of over 1.3 lakh sellers and service providers. These products are being bought by over 25,000 Indian government organisations registered on the platform.

Few top-selling product categories are photocopiers, computers, automobiles and office furniture. Some popular services transacted are human resources, transport, security, digitisation and cleaning. There have been many other benefits that are derived through this platform over the past two years. For instance, more than 40 per cent of transactions are done with MSMEs (micro, small and medium enterprises) registered on the platform, hence promoting the growth of small scale businesses. In July 2017, Indian Industries Association (IIA) and Government-e-Marketplace (GeM) had signed a bilateral MoU agreement to facilitate MSMEs and provide them assistance for registration and transactions through GeM portal.

22 States have signed a formal MoU with GeM to adopt GeM as the core procurement portal in their respective territories. These are Gujarat, Jharkhand, Telangana, Uttar Pradesh, Andhra Pradesh, Assam, Manipur, Arunachal Pradesh, Bihar, Tamil Nadu, Tripura, Punjab, Haryana, Madhya Pradesh, Chhattisgarh, Nagaland, Himachal Pradesh, Uttarakhand, Odisha, Maharashtra, Meghalaya and West Bengal. Statistics so far suggest that the use of GeM portal has resulted in an average savings of 25 per cent for its users.

Training of over 40 thousand buyers and sellers has been conducted across 28 States & UTs to enable them to seamlessly operate the platform. Integration with Quality Council of India (QCI) for ensuring quality compliances of the products and services offered through GeM.

Recently, GeM launched a service for the original equipment manufacturers (OEM) of the goods that are procured through the portal to help them track the movement of their products. While designated dealers who bid for government contracts were the only ones supplying to the government entities during the DGS&D days, e-marketplace has allowed every dealer or vendor of OEMs to participate in the bid.

Rating System

To further improve the procurement process, the GeM has recently introduced a rating system for its buyers and sellers. The move will improve transaction efficiency, as buyers will rate government agencies on the basis of their treatment towards their suppliers.

"If a government agency does not pay on time, rejects orders unnecessarily, does not close its order on time, the pre-set algorithm would downgrade its rating. Similarly, if the seller makes an offer but fails to deliver, or delivers late, or gets rejected for genuine reasons, its ratings get hit," says Ms Chauhan.

At the same time, the GeM has also introduced a review system that allows government departments to track the progress of the procurement process regularly. Over the past two years, the average payment cycle has gone down from 3-4 months to 23 days. The aim is to further bring it down to 10 days. This has been achieved due to the online transparency in monitoring the payment process status.

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