Modi's own Amazon to end tender raj, corruption faces teething troubles.

Economic Times

ET Online, Oct 30, 2017

The government procurement departments were perceived as dens of corruption, where norms were often compromised to favour suppliers who offered cuts to conniving officials. A novel alternative by the government aims to put an end to the Procurement Raj. The government is building its own 'Amazon' where suppliers and service providers will list to be eligible for government supplies. All government purchases will be done through this portal called the Government e-Marketplace, or GeM, which was launched in August last year with the main aim of making the process much more efficient. 

The GeM portal will manage procurement for ministries and departments for items such as laptops, air conditioners, furniture and items of daily use like stationery at both the state and central level. Services such as taxis and florists also come under the purview of GeM. 

Thousands of products and services such as security, transportation, pest control and laundry are already available on GeM, currently run in-house. The total value of purchase made on GeM amounted to Rs 454 crore between August 2016 and April 30 this year. 

However, the GeM has run into rough weather. The project needs to be further streamlined, companies said at a meeting of stakeholders last week. The main issue is that the government may be trying to apply procurement rules for hardware to software services, executives said. Small and medium companies are finding it tough to list on the portal due to lack of experience. The current structure also requires companies to rely on rate contracts that may be a few years old and seeks further discounts on those prices

The GeM is expected to drive significant cost savings for the government by bringing transparency in procurement. As per official estimates, average prices on GeM are lower by 15-20% in comparison to the tender, rate contract and direct purchase rates. Moreover, demand aggregation for most of the common use goods and services is estimated to result in annual savings to the tune of Rs 40,000 crore per annum. Procurement by the central and state governments put together is estimated at Rs 5-7 lakh crore each year.

Earlier this year, the government amended the General Financial Rules to make it mandatory for central and state agencies to route all their office purchases through the GeM portal. Since its scope has broadened exponentially, the government is looking at roping in private companies to build and manage it. 

Though the portal will be owned by the government, it will be run through a special purpose vehicle comprising both bureaucrats and professionals from the private sector. 

Chennai-based mid-tier financial technology firm Intellect Design Arena pipped biggies such as Tata Consultancy Services and Sify to bag the contract. The five-year contract is estimated to be worth around Rs 1,000 crore. 

Reference-https://economictimes.indiatimes.com/news/economy/end-of-tender-raj-modis-own-amazon-to-end-corruption-save-on-purchases/articleshow/61268247.cms?utm_source=APPusers&utm_medium=whatsappshare&utm_campaign=socialsharebutton&from=mdr