A Complete Guide to GeM Portal Bids and Key Terms

• • GeM stands for Government e-Marketplace. It is an online platform launched by the Government of India to facilitate transparent and efficient public procurement. It is operated by the Industry of Commerce and Industry. Officially launched on 9th August 2016, the GeM portal allows government departments (both state and central), ministries, PSUs (Public Sector Undertakings), and autonomous bodies to procure goods and services directly from registered sellers.

The key objectives behind the launch of the GeM portal include:

• Eliminating the manual tendering-based procurement system.
• Ensuring transparency and equal opportunities for sellers.
• Promoting start-ups, SMEs, OEMs, and Self-Help Groups (SHPs) in India.
• Reducing procurement cycle time.
• Enabling government buyers to procure products and services at competitive prices.

Who Can Buy and Sell on the GeM Portal?

The following entities are authorised to buy on the GeM portal:

• Central and state government departments
• PSUs
• Local government bodies and institutions (municipalities, panchayats, etc.)
• Autonomous bodies
• Authorised government officers

Below are the entities eligible to register as sellers on the GeM portal:

• OEMs
• Authorised resellers
• Artisans, craftsmen, and individual suppliers
• Service providers
• SHGs and community-based organisations

If you are wondering what OEM in the GeM portal is, it stands for an Original Equipment Manufacturer. They are the ones who originally manufacture or develop the product that’s being sold. OEMs enjoy certain privileges over other types of sellers on the GeM portal. They include:

• Only OEMs are allowed to list and sell products in the Quadrant 1, or Q1, categories.
• OEMs have the liberty to create product catalogues for Q2 categories. They can authorise resellers to share these catalogues.
• OEMs are often exempt from certain compliance steps.

How the GeM Portal Works

The GeM portal operates like a structured e-commerce platform. Sellers list their products or services under predefined categories, while buyers can compare prices, specifications, and seller ratings before placing orders. Depending on the order value and procurement requirement, buyers can choose from multiple procurement methods, including direct purchase, normal bidding, reverse auction, and L1 buying.

Everything, from buyer and seller registration to bidding to order placement to payment, is carried out digitally. This makes GeM one of the most transparent government procurement systems globally.

Vendor assessment in the GeM portal is a quality assurance mechanism used to evaluate a seller’s manufacturing capability, service delivery standards, and compliance with GeM norms. This assessment is carried out by the GeM-approved and SEBI (Securities and Exchange Board of India) empanelled rating agencies. The vendor assessment facility is optional for most OEMs, service providers, and resellers. However, for certain vendors, it’s mandatory.

The benefits of vendor assessment in the GeM portal include:

• Vendors who have been pre-assessed are marked with a “VA” tag next to their name on the GeM Marketplace. This tag helps build buyer confidence, as it indicates that the seller’s credentials have already been verified and authenticated.
• Vendor Assessment plays an important role in determining the Seller Rating displayed on the GeM marketplace.
• Sellers who complete the Vendor Assessment process receive priority for faster product listing approvals on the GeM portal.

Process of Vendor Assessment in the GeM Portal

Interested sellers can fill out an online application form to initiate the vendor assessment process in the GeM portal. They may need to pay a vendor assessment fee and upload the required documents to submit the form. Upon receiving the vendor assessment form, the authorised rating agencies verify the following things before providing the seller rating:

• Office or business premises
• Production capacity evaluation
• Quality certifications (such as ISO, BIS, etc.)
• Past financial performances
• Business experience

Once a vendor assessment rating is issued, it remains valid for a period of two years from the date of issuance. The seller can apply for a reassessment post this period.

Vendor Assessment Fees

The table below depicts the vendor assessment fees for different types of sellers on the GeM portal:

• • • • • • Depending on the order value and the product, buyers have to go through the different types of procurement processes on the GeM portal. This mechanism is in place to ensure price competitiveness and transparency in the procurement process. Additionally, it’s based on the principle that the processes must be different for small vs bulk procurements and urgent vs planned procurements.

Below are the different types of procurement processes on the GeM portal:
1. Direct purchase for order values of up to ₹50,000.
2. L1 purchase for order values between ₹50,000 and ₹10 lakhs.
3. Bidding for order values exceeding ₹10 lakhs.
4. Reverse auction for bulk buying.

Keep reading to know more details about each procurement type and the GeM tender.

What is Direct Purchase on the GeM Portal?

If the total order value is below Rs. 50,000, a buyer can place a direct order with the seller on the GeM portal. This is the simplest of all procurement methods allowed on GeM.

The key features of the direct purchase method include:

• Applicable for order values not exceeding ₹50,000.
• A buyer can place an order with the preferred seller, preferably the one offering the lowest price.
• No bidding or approval is required. A buyer can simply place an order and receive goods like any other e-commerce platform.
• Useful for procuring general items, such as stationery, office supplies, small hardware tools, etc.

What is L1 in the GeM Portal?

L1 purchase in the GeM portal allows a buyer to select a seller with the lowest bid from at least three different sellers. It helps the buyer procure items at the lowest possible rates.

The key features of the L1 purchase method include:

• Applicable for order values between ₹50,000 and ₹10 lakhs.
• After a price comparison, the buyer places the order with the seller quoting the lowest price.
• Selection is price-based after technical qualification.
• Apart from quoting the lowest price, the seller must meet all technical and compliance requirements.

What is GeM Tender?

A GeM tender refers to a structured procurement process initiated by a government buyer for requirements exceeding the direct purchase limit. Tenders on GeM are fully digital and eliminate manual tendering procedures. Eligible sellers can respond to GeM tenders and start placing their bids to sell their products to government organisations.

GeM tenders ensure competitive bidding and fair price discovery while maintaining compliance with General Financial Rules (GFR). They typically encapsulate the following details:

• Technical specifications for product requirements
• Eligibility criteria for sellers to participate
• Bidding timelines
• Evaluation methodology
• Other necessary information

What is a Bid in the GeM Portal?

A bid in the GeM portal is a formal offer submitted by a seller in response to a tender. Eligible sellers can participate in open bidding on the GeM platform by quoting prices, delivery timelines, and technical compliance details. The process ensures high transparency and helps government buyers procure products at competitive prices. Additionally, it allows multiple sellers to compete fairly for government orders.

The process of bidding on the GeM portal typically involves the following steps:

• Step 1 - Visit the official GeM portal and log in to your seller account.
• Step 2 - Navigate to “Bids” and then click on the “Participate in Bids” option to view active tenders.
• Step 3 - Download bid documents and read carefully to understand the eligibility criteria, buyer requirements, and other details.
• Step 4 - Click on the “Participate” button.
• Step 5 - Submit technical bid and financial bid.
• Step 6 - Wait for the results.

What is Custom Bidding in the GeM Portal?

When a required product or service category is unavailable on the GeM portal, a buyer can decide to raise a custom bid. In a custom bid, a buyer must clearly define their specific requirements to allow sellers to offer relevant products or services in response. Such a mechanism provides flexibility to both buyers and sellers while maintaining compliance with procurement rules.

A custom bid is typically used in the following scenarios:

• When a buyer’s requirements are unique and/or complex.
• The product or category a buyer is looking for is not available on the portal.
• A buyer needs customisation before delivery.

What is a Financial Bid Opening in the Gem Portal?

The financial bid opening refers to the crucial second stage of the bidding evaluation process. In this stage, the financial bids of the sellers who have already won the technical bidding (in the first stage) are opened and evaluated. The winner is then announced based on this evaluation. The process of the financial bid opening is visible to all eligible sellers.

What is a Reverse Auction in the GeM Portal?

A reverse auction in the GeM portal is a price discovery mechanism which allows sellers to compete with each other by quoting lower prices in real time. The auction usually starts with a base price, and then sellers can lower their prices to win the auction.

The key features of a reverse auction method include:

• Sellers compete with each other by lowering prices in real time.
• A seller with the lowest quoted price wins the auction.
• Ensures transparency and competition.
• Helps government buyers procure general items at the best rates.
• Generally used for bulk purchasing of standard products.

What is EPBG in the GeM Portal?

EPBG in the GeM portal stands for Electronic Performance Bank Guarantee. It is a form of digital security mechanism that has replaced the traditional bank guarantees. The purpose of an EPBG is to ensure that a seller fulfils its contractual obligations after winning a tender on the GeM portal.

Below are the key features of an EPBG:

• Usually required for high-value orders.
• Protects buyers against non-fulfilment of contractual obligations.
• Enhances buyer confidence and ensures accountability.
• Submitted in digital forms and obtained from banks.
• Released or cancelled after contractual obligation.

The GeM portal has transformed India’s government procurement ecosystem by introducing transparency, efficiency, and fairness at scale. While the platform is intuitive, understanding the key concepts mentioned in this blog is essential for sellers. It allows them to comply with the portal guidelines and bid strategically to win tenders.

A commercial insurance policy helps businesses safeguard working capital from unwanted expenses. Commercial insurance is a type of business insurance for small businesses that protects them from incurring financial losses due to fire, theft, burglary, loss of cargo, and workplace-related accidents.

Those running a shop can procure dedicated Shop Insurance from TATA AIG. Carefully designed for all types of shop owners, including boutiques, general merchants, and electronic shops, this policy offers 360-degree protection against mishaps.