Why the value band decides everything

The single biggest mistake a supplier makes on Government e Marketplace is treating every opportunity as a tender. Most tableware purchases are not tenders. They are catalogue transactions, and the ones that are tenders behave differently.

Rule 149 of the General Financial Rules, 2017, as amended by Department of Expenditure Office Memorandum F.1/3/2024-PPD of 10 July 2024, sets the structure. Procurement of goods by ministries and departments is mandatory for goods available on GeM. The portal is then used for direct online purchase as follows.

Rule 149 also allows the buyer to use the bidding and reverse auction tools below Rs 10,00,000 if they choose. And it forbids splitting: a demand for goods shall not be divided into small quantities to make piecemeal purchases so as to avoid L1 buying, bidding or reverse auction on GeM, or to avoid a higher sanction.

Two further points from Rule 149 shape a tableware seller’s year. Ministries and departments must project their annual procurement plan on GeM within 30 days of budget approval, so the demand is visible before the order. And buyers test price reasonableness using the portal’s business analytics tools including the last purchase price on GeM, so your listed price is compared against what the government last paid, not against your own quotation history.

Getting listed: the part that takes longer than you expect

Government e Marketplace publishes its seller requirements in its own seller FAQs, and the sequence below reflects what those state.

Registration. A seller registers against a constitution type such as proprietorship, firm, company, trust, society or government body. Identity verification is by Aadhaar or personal PAN, with Aadhaar no longer mandatory. Organisation address, bank details, an active email and tax documents appropriate to the constitution are required, which may include CIN, PAN, DIPP and Udyam registration details.

Manufacturer or reseller. GeM distinguishes an Original Equipment Manufacturer, described as a vendor with proper manufacturing facilities following proper manufacturing processes and quality check parameters, from a reseller. A company without its own plant can be treated as an OEM through a contract manufacturing arrangement if it produces the contract agreement during assessment. In categories where OEMs already list products, resellers must map themselves to the OEM and upload authorisation documents. The distinction matters commercially too, for reasons set out in buying direct from the factory or through a distributor in India.

Catalogue. Products are added under a category with specifications, images, quantity and price. GeM states a turnaround time of 96 hours for product approval, requires an actual product image on a clean white background without watermark at a maximum of 300 kilobytes, and states that once a product is published the catalogue cannot be edited except for stock and price. That last point costs time: proof the entry before publishing.

Brand. If your brand is not on GeM you request its addition. Brands are rejected where the representation of the brand name is not consistent with the trademark, authorisation letter or website for the category.

Vendor assessment. Mandatory for OEMs and resellers in selected categories, with exemptions including central and state public sector undertakings, sellers above a stated annual turnover, BIS licensed OEMs, KVIC, the Coir Board and TRIFED. GeM states the assessment report is made available within 15 working days of the request, with disputes settled between the fifteenth and twentieth day.

Budget six to ten weeks from a standing start to a live, bid capable catalogue entry, most of it spent on assessment and on getting specification fields right rather than on the registration form.

The two preference regimes that decide who wins

Price alone does not determine the award on GeM. Two policy instruments sit over it, and a supplier who does not know which one applies loses orders they had already won on price.

Micro and small enterprise preference. Under the Public Procurement Policy for Micro and Small Enterprises Order, 2012, made under the Micro, Small and Medium Enterprises Development Act, 2006, central ministries, departments and central public sector undertakings must procure a minimum of 25 per cent of their annual value of goods and services from micro and small enterprises, with 4 per cent earmarked for enterprises owned by scheduled caste and scheduled tribe entrepreneurs and 3 per cent for those owned by women entrepreneurs. In a tender where the lowest price is from a party other than a micro or small enterprise, an MSE quoting within a band of L1 plus 15 per cent is allowed to supply up to 25 per cent of the total tendered value by bringing its price down to L1. GeM’s own seller FAQs describe a further position under which the full bid quantity can be awarded to an L1 MSE seller.

Make in India local content preference. The Public Procurement (Preference to Make in India) Order, 2017, most recently revised by the Department for Promotion of Industry and Internal Trade on 19 July 2024, classifies suppliers by local content. A Class-I local supplier meets a minimum of 50 per cent local content. A Class-II local supplier meets a minimum of 20 per cent but less than 50 per cent. Where the nodal ministry has notified sufficient local capacity and competition for an item, only Class-I local suppliers may bid, irrespective of value. Otherwise, only Class-I and Class-II local suppliers may bid unless a global tender enquiry has been issued.

The purchase preference mechanics decide whether you can recover an order you did not win outright. Where the goods are divisible and L1 is not a Class-I local supplier, 50 per cent of the order goes to L1 and the lowest Class-I local supplier within the margin of purchase preference is invited to match L1 for the remaining 50 per cent. Where the goods are not divisible, the lowest Class-I local supplier within the margin is invited to match L1 for the whole contract. The margin is 20 per cent. Class-II local suppliers get no purchase preference at all.

Local content is self-certified at bid stage, with the percentage stated and the locations of local value addition given. Above Rs 10 crore a certificate from a statutory auditor, cost auditor, practising cost accountant or practising chartered accountant is required, and a supplier whose category drops on verification can face a penalty of up to 10 per cent of contract value.

For a domestically manufactured areca leaf product both regimes are usually favourable, because the leaf is collected in India, the forming is done in India and the value added is Indian. That does not entitle you to assume a figure. Calculate local content as the order defines it and be ready to evidence it.

What a government tableware bid asks that a private one does not

Beyond price, a GeM bid for disposable tableware typically turns on the following, and a submission that misses any one of them is scored out before the rate is read.

1. Category and golden parameters. GeM states that to participate in a bid the seller must have the offering in the required category and the product must comply with the allowed values of the golden parameters, the mandatory specification fields for that category. Read the parameter set before you build a bid, not after.
2. Additional terms and conditions. Buyers attach ATC documents carrying delivery locations, consignee splits, packaging and marking requirements and sample clauses. These are contract terms, not preferences.
3. EMD and ePBG. GeM’s seller FAQs state that where the estimated bid value is above Rs 5 lakh, an electronic performance bank guarantee and an earnest money deposit are applicable. Unsuccessful bidders’ EMD is returned within 15 days of the award or expiry of bid validity, whichever is earlier.
4. Prices inclusive of all taxes. GeM requires sellers to enter prices inclusive of all taxes including GST at bid participation, so settle the classification question covered in GST, HSN and invoicing on bulk tableware supply in India before you quote.
5. Food contact evidence and dispersed delivery. A consignee serving food on the item expects the material declaration and accredited laboratory reports discussed in FSSAI requirements for food contact tableware sold in India. Government orders also split across sites, so price freight to the furthest consignee, not the average.

The unhelpful thing worth saying

GeM suits a supplier who can hold a published price, deliver to dispersed consignees on a fixed period, and carry the administrative load of assessment, EMD and ePBG. It suits a supplier with seasonal capacity and a preference for larger consolidated orders much less well.

If your business is built on a small number of large annual contracts, an annual rate contract with an institution, or a distributor relationship, GeM may be the wrong first door. Rate contracts and annual tenders for disposable tableware in India covers the alternative, and appointing a distributor in India covers the case where someone else carries the portal overhead. There is no shame in letting an established GeM seller list your product and taking the manufacturing margin.

Frequently asked questions

Related reading

• Rate contracts and annual tenders for disposable tableware in India
• Institutional catering procurement in India: hospitals, canteens, railways and campuses
• FSSAI requirements for food contact tableware sold in India
• GST, HSN and invoicing on bulk tableware supply in India
• Direct from the factory or through a distributor: buying areca tableware in India

References