Government in India is a very big procurement engine, this can be seen from the quantum of orders finalised in GeM1 as per their official site home page:
Note: Status as on 25.10.2020
This is just the tip of the proverbial iceberg since GeM procurement is not yet underway in a full swing. There are still daily Goods and Services that are being added in GeM and there are very many improvements being carried out in the system. Further in future all State Governments are also expected to come on board GeM increasing the transactions multifold.
Being such a big procurement agency, Government procurement is a big hope for the 6.3 crore MSMEs in the country2. This number is also prior to the reclassification of MSMEs as below3:
Being a model procurement agency which intends to procure with transparency, fairness and equity, the Government wishes to support the MSMEs in supplying to Government.
First of all we need to understand why they need this support. Our Government Procurement ecosystem works predominantly on L1 basis i.e. the lowest bidder gets the order, though the present General Financial Rules 2017 provides for Quality and Cost Based Selection, Life Cycle Costing, etc as options still majority of the cases are decided on the cost component. Considering that to win you need to quote wafer thin margins, it is imperative that to do business with Government, these minnows need support.
Secondly, unless they are supported, they will seldom be able to survive any delays in payment, unfair rejection of supplies, lack of transparency in finalising bids, etc as a result of the infamous corrupt practices of Organisations in the Government System.
Denne historien er fra December 2020-utgaven av The Management Accountant.
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Denne historien er fra December 2020-utgaven av The Management Accountant.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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