The Government e-Marketplace (GeM) is an online platform launched by the Government of India to modernize and streamline the procurement process for goods and services required by various government departments, ministries, and public sector undertakings (PSUs). It ensures transparency, efficiency, and speed in public procurement.
Understanding the types of procurement methods on GeM is crucial for buyers and sellers to choose the right process for compliant and effective transactions.
Why Different Procurement Types Exist on GeM#
Public procurement varies in scale, urgency, and nature. GeM offers multiple methods to suit different needs:
- Small purchases vs bulk procurement
- Urgent requirements vs planned procurement
- Standard items vs customized services
These methods ensure fair competition, cost-effectiveness, and compliance with General Financial Rules (GFR).
1. Direct Purchase (Up to ₹50,000)#
Overview:#
The simplest method, allowing buyers to purchase directly from any seller without competition.
Key Features:#
- Applicable for orders up to ₹50,000 per transaction.
- Buyers can choose any seller, preferably the lowest-priced one.
- No bidding or approval required.
Use Case:#
Office stationery, cleaning supplies, or small hardware tools.
Pros:#
- Quick and easy
- Saves administrative effort
2. L1 Purchase (₹50,000 – ₹10,00,000)#
Overview:#
Introduces competition by selecting the lowest bidder (L1) among at least 3 sellers.
Key Features:#
- Price comparison is mandatory.
- Order is placed with the seller quoting the lowest price.
Use Case:#
Office furniture, bulk IT peripherals, or machinery.
Pros:#
- Ensures competitiveness
- Relatively quick compared to tenders
3. Bidding (Above ₹10,00,000)#
Overview:#
A competitive bidding process for high-value procurements to ensure transparency.
Key Features:#
- Open bidding on the platform.
- Auto-selection of the L1 seller based on price and compliance.
Use Case:#
Bulk orders, infrastructure projects, IT services.
Pros:#
- High transparency
- Strong competition reduces costs
4. Reverse Auction (RA)#
Overview:#
Sellers bid down prices in real-time to win contracts.
Key Features:#
- Starts with a base price.
- Sellers compete to offer the lowest price.
Use Case:#
Generic bulk items like laptops or air conditioners.
Pros:#
- Drives down costs
- Transparent and competitive
5. Custom Bidding (BoQ-based Procurement)#
Overview:#
For technical purchases with predefined specifications (Bill of Quantities).
Key Features:#
- Detailed technical and financial evaluation.
Use Case:#
Annual maintenance contracts, software development.
Pros:#
- Enables complex procurement
- Flexible and customizable
6. Services Procurement#
Types of Services:#
- Manpower hiring
- Facility management
- IT services
How it Works:#
- Buyers define requirements and select bidding or direct purchase.
Pros:#
- Reduces outsourcing complexity
- Transparent evaluation
How to Choose the Right Procurement Type#
| Purchase Value | Procurement Type |
|---|---|
| Up to ₹50,000 | Direct Purchase |
| ₹50,001 – ₹10,00,000 | L1 Comparison |
| Above ₹10,00,000 | Open Bidding or Reverse Auction |
| Complex Services/BoQ | Custom Bidding |
Conclusion#
Choosing the right procurement method on GeM ensures compliance with GFR 2017 and maximizes efficiency. Whether it's a small purchase or a large contract, GeM provides the tools for transparent and cost-effective procurement.
