Types of Tender on Government e Marketplace

The Indian Government launched a transparent e-Marketplace popularly known as GeM to empower small traders and manufacturers.

Any small trader or manufacturer can get a GeM registration for its business easily. A business can then access the wide interface to sell its products and services to the distinguished buyers from Government sector or PSUs, where there is a huge requirement for such supplies.
Now the question arises,

How do the sellers having GeM registration sell their products to the Government sector buyers?

How do the merchandisers or Sellers having GeM Registration sell their products to the Government sector buyers?
This is fulfilled by a process called Public procurement. The government buys the goods of registered buyers through the process of Public procurement.

What is Public Procurment?

Just like private companies, the Governments' services purchase goods and services as per their functional and sanctioned demand.
Public procurement refers to the process by which central, state governments, and PSUs buy goods & services from private dealers and manufacturers. In common terms, this is called government tender.
Public procurement requires a strict procedure in order to ensure that the purchases are fair, effective, transparent, and with minimum public offers.
Now, we shall bandy different kinds of Public procurement or government tender.

What is Tender?

The tender is an offer to perform some task or to supply goods at a fixed price. The contractors will be invited to submit sealed bids for construction or for the provision of specifically designed services or goods during a particular time frame in the initial step of this tender process.

Understanding a Tender

India's e-tender process is structured to ensure that the work to be performed for the government or a specific client is accomplished reasonably. For example, some places may have specific procurement policies that direct on how to make a decision, and which tender to accept.

An open tender is the main form of tender, followed by both the government and the private sector. The client advertises the tender offers in the local newspaper along with the critical information of the proposed works inviting interested contractors.

1. Advertised Tender Enquiry

The government advertises specifications on GeM portal and Central Public Procurement Portal (CPPP) for the acquisition of goods and services. And give Note to sellers to apply for tenders. This method is used by government institutions when the acquisition of goods and services of the value of INR. 25 lakhs and above.

2. Limited Tender Enquiry

This method is applied when any goods and services regularly secured by government departments such as paper, printer cartridge filler, water supply, etc. Under limited tender inquiries, limited suppliers are impaneled by the Government Department. Usually, Limited Tender Enquiry is used when the expected value of the goods and help to be procured is less than INR 25 Lac.

3. Two-Stage Bidding

    This is a conventional method used to procure high-value items such as buying plants and machines etc. and when any acquisition requires to assess complex and technical terms. Under Two-Stage Bidding, tender is allocated to a supplier based on strongly passing below 2 stages:
  • Technical Assessment,
  • Financial L1 (Lowest Price) Bid

4. Single Tender Enquiry

This approach is adopted when the availability of wanted goods and services limited in the open market or suppliers is very limited. This method is very useful for startups having unique and innovative products. In order to enable startups, the government has also launched a special scheme “Startup Runway” for getting unique and innovative products directly from startups.

There can be several factors such as:

  • Only a single supplier is available to the best of the knowledge of the management department's officials.
  • When the acquisition of goods is urgent and necessary to purchase from a particular known source.
  • When specific additional machines or spare parts are required which are only harmonious with existing procured machinery.

5. Electronic Reverse Auctions

Auction is what when you give a higher bid to buy the auctioneered item. Under Reverse auction, you bid a more economical price to sell your product. An Electronic Reverse Auction is a type of online auction available. Under electronic reverse auction, there is one customer (government department) and many potential traders (private companies). The sellers give lower bids to obtain business from the buyer and the bid will typically lower as the sellers negotiate with each other.

If you need guidance on GeM Registration & Tender Bidding , feel free to contact our team.