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General Financial Rules 2017

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Government e-Marketplace (GeM)- General Financial Rules- 2017

Jan 01, 2020

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Government e-Marketplace (GeM)- General Financial Rules- 2017. Dr. Anurag B Singh Certified Trainer- GeM Faridabad , India. Rule 147 of General Financial Rules- 2017. Rule 147 Powers for procurement of goods:

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Government e-Marketplace (GeM)-General Financial Rules- 2017 Dr. Anurag B Singh Certified Trainer-GeM Faridabad, India

Rule 147 of General Financial Rules- 2017 Rule 147 Powers for procurement of goods: • The Ministries or Departments have been delegated full powers to make their own arrangements for procurement of goods and services, that are not available on GeM. • Common use goods and services available on GeM are required to be procured mandatorily through GeM as Rule 149.

Rule 149 of General Financial Rules- 2017 (As Amended No.F.1?26/2018-PPD dated 2nd April, 2019)

Rule 149. Government e-Market place (GeM) • Government of India has established the Government E-Marketplace (GeM) for common use Goods and Services. • GeM SPV will ensure adequate publicity including periodic advertisement of the items to be procured through GeM for the Prospective suppliers. • The Procurement of Goods and Services by Ministries or Departments will be mandatory for Goods or Services available on GeM. • The credentials of suppliers on GeM shall be certified by GeM SPV. • The procuring authorities will certify the reasonability of rates.

Rule 149 (Contd.) • The GeM portal shall be utilized by the Government buyers for direct on-line purchases as under :- • Up to Rs.25,000/- through any of the available suppliers on the GeM, meeting the requisite quality, specification and delivery period. • Above Rs.25,000/- and up to Rs.5,00,000/- through the GeM Seller having lowest price amongst the available sellers (excluding the automobiles where the current limit of 30 Lakh will continue) of at least three different manufacturers, on GeM, meeting the requisite quality, specification and delivery period. The tools for online bidding and online reverse auction available on GeM can be used by the Buyer even for the procurement less than Rs. 5,00,000. • Above Rs.5,00,000/- through the supplier having lowest price meeting the requisite quality, specification and delivery period after mandatorily obtaining bids, using online bidding or reverse auction tool provided on GeM (excluding the automobiles where the current limit of 30 Lakh will continue).

Rule 149 (Contd.) • The invitation for the online e-bidding/ reverse auction will be available to all the existing Sellers or other Sellers registered on the portal and who have offered their goods/services under the particular product/service category, as per terms and conditions of GeM. • The above mentioned monetary ceiling is applicable only for purchases made through GeM. For purchases, if any, outside GeM, relevant GFR Rules shall apply. • The Ministries/Departments shall work out their procurement requirements of Goods and Services on either “OPEX” model or “CAPEX” model as per their requirement/ suitability at the time of preparation of Budget Estimates (BE) and shall project their Annual Procurement Plan of goods and services on GeM portal within 30 days of Budget approval. • The Government Buyers may ascertain the reasonableness of prices before placement order using the Business Analytics (BA) tools available on GeM including the Last Purchase Price on GeM, Department’s own Last Purchase Price etc. • A demand for goods shall not be divided into small quantities to make piecemeal purchases to avoid procurement through L-1 Buying / bidding / reverse auction on GeM or the necessity of obtaining the sanction of higher authorities required with reference to the estimated value of the total demand.

Enabling provisions of Rule 149 of General Financial Rules- 2017 Necessary guidelines, terms and conditions for the procurement through GeM Portal with enabling of GFRs 2017 Rule-149:- • GFR rule 149 allows direct on-line purchases on GeM up to Rs. 25,000/- through any of the available suppliers on the GeM, meeting the requisite quality, specification and delivery period. However this is subject to procuring authorities certifying the reasonability of rates. While making such direct online purchase below Rs. 25,000/-, the buyer should have approval of competent authority and should also record reasons for selecting the specific product in case lowest priced products are not being accepted / ordered.

Enabling provisions of Rule 149 of General Financial Rules- 2017 • Tools have been deployed on GeM portal to show the price of compared products on other e-commerce sites (wherever available) and also the rates at which orders have been placed on GeM for such items in recent past. While taking decision on reasonableness of price, the buyers may also take into account the discount over MRP; Last Purchase Price on GeM, Department’s own Last Purchase Price; rates on other e-commerce websites etc. The prices on e-commerce site give a broad idea and its terms and conditions may be different. If it is found that the price available on GeM marketplace is not reasonable or is substantially higher than e-commerce sites or LPP, the GeM Portal provides tools for online bidding or reverse auction which can be used by the Buyers to get better competitive rates and then satisfy themselves about reasonableness of the price as per GFR -2017 before placement of contract. • Bidding should be considered as the preferred mode of procurement above Rs. 25,000/-.

Enabling provisions of Rule 149 of General Financial Rules- 2017 • In case of Direct Purchase, during carting period, rates for carted quantity, for that buyer, are frozen for carting period as notified from time to time on GeM against any upward revision by seller. However, advantage of any downward revision in the offer price of carted item shall be automatically provided to the buyer. • According to the provisions of Rule 149 (ii) of GFR, 2017, GeM shall be utilized by Government buyers for direct on-line purchases above Rs. 25,000/‐ and up to Rs. 5,00,000/- however such purchase has to be through the Seller having the lowest price (L-1) amongst the available Sellers on the GeM. In order to ensure that buyers select only L-1 available offer, the GeM portal requires that buyer first compares all the product options available on GeM to ensure that it meets its requirements/ specifications. While comparing, care should be taken that comparison has to be done between products of at least three different Manufacturers / OEMs. For L-1 buying, comparison has to be made between products of at least three different OEMs. If Buyer wants to buy any specific OEM’s product then he has to go for Proprietary Article Certificate (PAC) buying after obtaining necessary approvals of competent authorities for PAC buying as per GFR-2017.

Proprietary Article Certificate (PAC) Buying While making procurement under PAC Buying on GeM, Buyer has to comply with following conditions:- • In case a Govt. Buyer on GeM, wants to make procurement on proprietary basis on the GeM Portal after obtaining the requisite approvals/PAC certificate from their competent authority as per Rule 166 of GFR-2017, the Buyer can use PAC filter provided on GeM for selecting a specific model/ make available from a particular GeM Seller. • The Seller’s price on the Portal is just their offer prices and the proper discovery of price generally happens through bidding/RA. Moreover, in PAC procurement irrespective of multiple listing by authorised sellers, the important issue of price control remaining with the OEM cannot be overlooked. Therefore, in case of all the PAC procurements, the Buyers will have to carry out extra due diligence in establishing the reasonableness of prices before placement of contract as per para (vii) of Rule -149 of GFR-2017.

Proprietary Article Certificate (PAC) Buying • Except for direct buying up to Rs. 25,000/- subject to establishing the reasonableness of price, the bidding will be mandatory for procurements above Rs. 25,000/-. As result of bidding, the response could be as under: i. Only OEM is available or only single authorised seller is available. ii. OEM as well as multiple authorised Sellers are available. • After bidding, under PAC buying, the Buyer may take decision with the approval of the competent authority to process the procurement subject to establishing the reasonableness of prices before placement of contract as per Para (vii) of Rule -149 of GFR-2017.

Rule 166 Single Tender Enquiry of General Financial Rules- 2017

Rule 166 Single Tender Enquiry Procurement from a single source may be resorted to in the following circumstances : (i) It is in the knowledge of the user department that only a particular firm is the manufacturer of the required goods (ii) In a case of emergency, the required goods are necessarily to be purchased from a particular source and the reason for such decision is to be recorded and approval of competent authority obtained. (iii) For standardisation of machinery or spare parts to be compatible to the existing sets of equipment (on the advice of a competent technical expert and approved by the competent authority), the required item is to be purchased only from a selected firm

Rule 166 Single Tender Enquiry Note : Proprietary Article Certificate in the following form is to be provided by the Ministry/Department before procuring the goods from a single source under the provision of sub Rule 166 (i) and 166 (iii) as applicable. (i) The indented goods are manufactured by M/s....................... (ii) No other make or model is acceptable for the following reasons:...................................................... (iii) Concurrence of finance wing to the proposal vide: ……………….. (iv) Approval of the competent authority vide: (Signature with date and designation of the indenting officer)

Stipulating of Delivery • In order to give flexibility to the buyers in sourcing their requirements through GeM, provision has been made in e-bid and RA modules for indicating delivery period in terms of “number of days from date of placement of contract”. While stipulating delivery period in their bid documents, Buyers are advised to be careful since un-realistic delivery period stipulations may result in elimination of some genuine sellers, lack of competition and may ultimately have impact on cost of procurement. While fixing delivery period in e-bid/ RA bid, buyers should not only take into consideration the quantity required and the essentiality of requirement of that quantity within stipulated time period but also the possible impact of shorter delivery period on competition in e-bidding / RA.

Splitting of Demand • Splitting of demands by creating multiple Bids / RAs of same goods / services or making repeated procurements of same Goods / Services through L-1 buying as per rule 149(i) and 149(ii) of GFR-2017 are strictly prohibited on GeM. Splitting of demand deprives the organizations from achieving the best competitive prices leveraging economies of scale. It also implies avoiding the necessity of obtaining the sanction of higher authority required with reference to the estimated value of the total demand. It is a violation of para Rule 149 (viii) of GFR -2017 and terms and conditions of GeM Portal and Buyer including the Primary Buyer shall be entirely responsible for the same. • If any such splitting of demand is noticed, GeM shall have the right to take necessary action such as blocking of such Bids/RAs and / or cancelling such contracts.

Dynamic online Marketplace • GeM is a dynamic online marketplace. The product/service listings across the existing categories are dynamic. Moreover, new categories of products/services are continuously being added on GeM. In situations where there is only one offer available in a product/ service category and/or there is offer from only one Seller after filter based search, the buyer should not select such offer for buying and such category may be deemed as not available for procurement on GeM. • The Buyer may hold on their procurement till such time, more Sellers list their products/services. This however will not apply for PAC procurement.

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