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GeM introduces rating system in government procurement

GeM introduces rating system in government procurement

The move is expected to turn transactions more efficient and healthy as government agencies have never been rated on the basis of their treatment towards their suppliers before.

The picture for representational purpose. The picture for representational purpose.

Government e-Marketplace (GeM), the online marketplace for the central and state government ministries and departments, public sector institutions and local bodies, has introduced a rating system for its buyers and sellers. The move is expected to turn transactions more efficient and healthy as government agencies have never been rated on the basis of their treatment towards their suppliers before. On the other hand, high rating would mean better business prospects for the mostly private, suppliers.

"If a government agency does not pay on time, rejects orders unnecessarily, does not close its order on time, the pre-set algorithm would downgrade its rating. Similarly, if the seller makes an offer but fails to deliver, or delivers late, or gets rejected for genuine reasons, its ratings get hit," says Radha Chauhan, CEO, GeM. "The algorithm is set on the service levels, so there is no subjectivity," she adds.

GeM, which took over the role of the century-old Directorate General of Supplies and Disposals (DGS&D) as the government's apex procurer of goods and services, has also introduced a review system that allows key government functionaries to track the progress of the procurement process on a regular basis.

"It is a huge transformation. The cabinet secretary reviews it once in every two months; the secretary (of every ministry) has a dashboard. Additional Secretary (Revenue) of all departments reviews this (payment process on the basis of deliveries) on a fortnightly basis," Chauhan says.

Even though the government institutions are supposed to clear the payment within 10 days of purchase of goods and services, the average payment happens in 23 days. "It is certainly not within the 10 day time frame, but much better than the 3-4 months it used to take. The difference is that unlike the early days, the seller doesn't have to do any follow up to get the payment. It's all transparent. The mere fact that somebody can monitor its status itself pushes the payment process," Chauhan explains.

Recently, GeM also launched a service for the original equipment manufacturers (OEM) of the goods that are procured through the portal to help them track the movement of their products. While designated dealers who bid for government contracts were the only ones supplying to the government entities during the DGS&D days, e-market place has allowed every dealer or vendor of OEMs to participate in the bid. "OEMs have been given full dashboards, which will show them who are the vendors. Previously some of them may not have had a clue as to who is selling; now they can see who is selling, in how much quantity. I am adding to their rigour," Chauhan says. The traceability of the goods movement will also help eliminate the entry of fake products into the government procurement system.

From across the country, there are about 3000 orders placed on GeM every day. On an average, 450 bids are getting raised every day to procure goods as wide ranging as automobiles to mobile phones and services from floral services to annual maintenance contracts.

GeM, launched last year, is being utilized by every state and union territory of the country. While several states have made it mandatory to meet all their general goods and services sourcing requirements through GeM, 24 States and UTs have signed a formal Memorandum of Understanding (MoU) with GeM to formalize this arrangement.