Learning GeM terminology is crucial for government procurement success. The Government e-Marketplace (GeM) uses specific terms that confuse buyers and sellers. This guide explains essential GeM terms, definitions, and meanings. It helps you navigate GeM procurement efficiently. Whether you're new to GeM or an experienced user, understanding these GeM portal terms improves your bidding strategy and compliance.
What is the GeM Portal?#
The Government e-Marketplace is India's official online platform for government procurement. It launched in August 2016. The platform revolutionizes how Indian government departments purchase goods and services. GeM eliminates intermediaries, reduces corruption, and ensures transparent procurement. Over 7.2 million orders worth ₹14.77 lakh crore have been processed since inception.
Key Buyer and Seller Roles on GeM#
To understand GeM processes, it’s necessary to know the roles and responsibilities of key users involved in procurement.
Head of Department (HOD)#
The Head of Department is the highest authority from a government organization on GeM. The HOD authorizes other officers and creates secondary user accounts. They oversee all procurement activities within their organization but cannot directly purchase items.
Buyer#
The Buyer is a secondary user responsible for making purchases on GeM. They search for products, place orders, and manage bidding activities on behalf of their organization.
Consignee#
The Consignee physically receives procured goods or services. They inspect items, verify specifications, and generate acceptance certificates like PRC and CRAC.
Designated Disbursing Officer (DDO)#
The Designated Disbursing Officer forwards bills to the Paying Authority Officer (PAO) for payment processing. The DDO ensures timely movement of bills through the payment system.
Paying Authority Officer (PAO)#
The Paying Authority Officer makes actual payments against validated bills within 2–3 days.
Essential GeM Procurement Terminology#
These are the most important terms sellers and buyers encounter during bidding and procurement on GeM.
Lowest Evaluated Bid (L1)#
Lowest Evaluated Bid is the lowest price among all qualified bids. The L1 bidder typically wins the contract after technical evaluation. In reverse auctions, L1 changes continuously as sellers lower prices, driving government cost savings.
Technical Evaluation#
Technical Evaluation is the first bid assessment stage. A committee verifies bids meet technical specifications including product quality, delivery timelines, and certifications. Bids failing technical evaluation are rejected immediately.
Earnest Money Deposit (EMD)#
The Earnest Money Deposit is a security deposit (2-5% of tender value) demonstrating bidder commitment. EMD is refundable to unsuccessful bidders. MSE sellers are exempt.
Performance Bank Guarantee (PBG)#
The Performance Bank Guarantee is security submitted by winning sellers (3 - 10% of contract value). Unlike EMD, PBG ensures proper contract execution.
Consignee Receipt and Acceptance Certificate (CRAC)#
CRAC is issued after receiving and accepting goods. The Consignee must generate it within 10 days. Payment cannot begin without CRAC.
Provisional Receipt Certificate (PRC)#
PRC is an initial receipt issued within 48 hours of receiving supplies.
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GeM Procurement Methods#
To participate effectively, sellers must understand the different procurement methods used by government buyers.
Direct Purchase#
Allows government buyers to purchase items up to ₹25,000 without formal bidding.
e-Bidding#
Formal bidding where technical and financial proposals are evaluated separately.
Reverse Auction (RA)#
Competitive bidding where seller lower prices in real time, encouraging cost savings.
Local Supplier Classifications: Make in India#
These classifications help buyers identify the level of local value addition in a product, ensuring priority for domestically manufactured goods under the Make in India policy.
Class I Local Supplier#
Requires 50% minimum local content. Receives the highest purchase preference.
Class II Local Supplier#
Requires 20% minimum local content. Secondary preference.
Micro and Small Enterprises (MSE) Terms#
These terms define how MSEs participate in government procurement and outline the benefits, eligibility, and policy advantages they receive on the GeM Portal.
Micro and Small Enterprises (MSE)#
Micro enterprises: investment below ₹25 lakh and turnover below ₹5 crore. Small enterprises: investment below ₹10 crore and turnover below ₹50 crore.
Udyam Registration#
Free, paperless digital registration for MSEs. Mandatory for MSE benefits on GeM.
MSME Purchase Preference Policy#
Central departments must procure at least 25% annually from MSMEs, with sub-targets for SC/ST and women-owned MSEs. MSEs captured 37.87% of GeM order value in FY 2024–25.
Payment Terms on GeM#
These payment-related processes ensure timely settlements for sellers and define how invoices, CRAC, and bill processing move through the GeM payment cycle.
Trade Receivables Discounting System (TReDS)#
Allows sellers to receive 80 - 90% of invoice value in 7 - 10 days.
Invoice and Bill Processing#
Payment flow: Invoice → CRAC → Bill Processing → Payment.
Special GeM Initiatives#
These initiatives strengthen inclusive procurement by empowering local entrepreneurs, promoting regional products, and expanding seller participation across India.
Aakanksha Initiative (Vocal for Local)#
Supports entrepreneurs from aspirational blocks across 329 districts. Facilitated ₹2,500+ crore in transactions and onboarded 8,000+ sellers.
Reserved Items for MSEs#
358 product categories can only be supplied by MSEs.
Contract Terms#
Understanding contract-related documents is essential for ensuring clarity, compliance, and smooth execution of every GeM transaction.
Purchase Order (PO)#
The binding contract containing specifications, quantities, delivery and payment terms.
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Why GeM Terminology Matters#
Understanding GeM terminology is essential for successful participation. Sellers must understand L1, EMD, and Class I classifications to price competitively. Buyers must understand technical evaluation and CRAC requirements for compliance. Both parties benefit from knowing payment terms to prevent delays.
Conclusion#
Mastering GeM portal terms and definitions removes participation barriers. Each term - from L1 bidding to Class I Local Suppliers - ensures fair, efficient, transparent procurement. Understanding this GeM glossary helps organizations maximize platform opportunities. For businesses targeting government contracts, knowing GeM terminology is your first step toward procurement success.
