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E-PROCUREMENT
I. Timeline
The finance minister announced the portal's launch in his budget speech for 2016-17.
The e-portal was launched on 9 August 2016 for general use by government officials. In
2018, the Public Procurement Policy for MSEs mandated that 25% of all purchases made
via the Government's e-procurement portal must be made from the MSE sector. This was
done to push the MSE industry and help it grow with the economy. Further, a sub-target
was set where 4% of all purchases made under the 25% blanket of MSEs was to be
procured from MSEs owned by SC/ST entrepreneurs.
In February 2019, GeM startup Runway was launched. It is a new concept initiated by
Government e-Marketplace in conjunction with Startup India to foster entrepreneurship
via innovation. It allows startups to provide products and services that are one-of-a-kind
in concept, design, method, and functioning.
Due to the operational difficulties encountered during implementation, the current system
looks to be complex.
II. Historical Background
The Government launched the Government e-Market Place or GeM in January 2016 to
recommend two secretary groups to the prime minister. The idea was to set up a
dedicated marketplace for various services and goods procured or sold by the
Government and PSUs. To make the system more transparent, hassle-free, user-friendly,
and cashless, this was done.The portal helped make the selling and buying process more
uniform and consistent. It also saved the Government a lot of costs as transparency made
sellers list their services and goods at a more reasonable price to win the orders.
III. WHAT of the initiative
Mission statement - Develop a safe and reliable end-to-end technical model to assure
fair, transparent, and cost-effective procurement procedures, as well as develop,
maintain, and continuously update a data analytics platform to support strategic decisions
aimed at reducing and optimising government spending.
Implementation of this is expected to enable it to pursue its purpose along three major
strategic dimensions:
Key issues:
 Integration of data from several procurement behemoths is required.

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 Standardization is required for monitoring performance indicators.
.
IV. HOW of the initiative
The website is a little confusing, however there are about 11 detailed guides on the
websites to aid new registrations.
Journey for a New User
The journey is simple and easy to navigate. The website has some glitches which can be
worked upon to improve further the experience of people signing up for the first time.
Journey for an Existing User
An existing user, he/she just have to login on the portal and open their dashboard which
has a glimpse of all tenders filled and their current status. Users can also do a selective
search for any particular tender that they wish to apply for.

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V. SWOT of initiative
VI. PESTLE of initiative-
Political Implications
This step has tremendous political implications. It was launched when the NDA
government first came to power in 2016 with the plan of maximum governance and
minimum government.
Economic implications
GeM has reached a high level of operational scale and has made significant progress
toward streamlining the platform's processes. It has already exceeded a total GMV of

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around 4 billion GBP and is expected to more than treble in the upcoming two years.In
the long run, it is predicted to reach its potential GMV of 90 billion GBP, which is
comparable to 4-5 percent of India's GDP, during the next 5-7 years.
Social Implications
The scheme is a very inclusive scheme, bringing to the foray MSME and startups in the
Indian procurement ecosystem by giving them a fighting chance against the big
conglomerates and legacy institutions.
On February 19, 2019, GeM introduced "Startup Runway," a new concept to foster
entrepreneurship through innovation. Through StartUp Runway Corner, agile and lean
startups can reach out to the world of government buyers by offering goods and services
that are distinctive in concept, design, process, and functionality.DPI (Department for
Promotion of Industry and Internal Trade) certified Startups are invited to offer their
products/services for procurement on Government e-Marketplace (GeM). The initiative's
goal is to assist businesses and support the creation of hyper-local jobs and wealth in
order to create equitable growth.More than 1500 businesses have registered on GeM,
providing over 12,000 items, and the site has received more than 5000 orders. Motorbike
fire engines, health kiosks, and rescue crafts are just a few of the unique and inventive
goods offered by these entrepreneurs.
Technological Implications
Security is the most vital part in the implementation of any digital policy initiative, and the
Indian government has ensured that appropriate safeguards are in place to ensure data
security. Stakeholders must be effectively convinced beyond a reasonable doubt that the
platform's transactions are secure. In the tendering process, the identities of bidders and
their quotations are sensitive information. The e-procurement solution incorporated
extensive security features to help ensure that all activities are logged, no unauthorised
person has access to the data, all sensitive data is stored in an encrypted form in the
database. In the scene of a calamity or system crash, the system can be restored in a
short amount of time. A sound security policy for e-procurement on the following lines is
implemented to ensure security in the platform.
• Two-factor authentication
• Digital signatures in compliance with the IT Act 2000
• Bid encryption at the database
• Online antivirus scanning
• 128 bit SSL encryption
• Audit trail of each activity
• Privilege-based user access
• Facility for digital notarization and time stamping
• Firewall for screening system access

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• Access control system
• Intrusion detection system (network and host)
• Periodical third-party security audit of the system
.
Legal Implications
The Finance Ministry changed the General Financial Rules shortly after GeM's
introduction, making it essential for all departments and ministries to source common
goods and services from GeM. In September 2018, India's Commerce and Industry
Minister, Suresh Prabhu, established a National Mission on GeM to expedite the adoption
and use of e-government services by central national ministries and their local
counterparts across the states.
VII. Competitor Analysis of initiative (nationally & internationally)-
International Analysis
German Procurement System
Germany follows electronic procurement (eProcurement) permits procurement
procedures to be handled entirely online. The advantages: Due to uniform procedures,
online procurement is more efficient and cheaper for both the contracting authority and
private-sector contractors. German Government has also been promoting eProcurement.
All bidding materials, notably the specification, must henceforth (as of April 18, 2016) be
fully accessible and available online for contracts above the EU thresholds. This reduces
the amount of effort and timeorganisations must put in to learn about and bid on contracts;
procurement procedures will become faster as a result. By the 18th of October 2018, all
contracting authorities and contractors must have fully transitioned to online procurement
procedures for public procurement and concessions exceeding EU thresholds. Tenders,
requests to participate, declarations of interest, and confirmations of interest can no
longer be accepted unless they are submitted electronically, with a few exceptions.The
Federal Government's procurement portal - the entire procedures for public procurement
below the EU thresholds will be digitized just like public procurement above the EU
thresholds.
The Procurement System in the United Kingdom
In three aspects, procurement in the UK is unusual in the EU: it is the largest in terms of
value, has the most restrictive methods and competitive dialogue, and is governed by two
separate legal systems. According to national figures, the UK procurement system
spends almost EUR 316 billion each year, making it the largest in the EU in terms of dollar
value. However, ESI funds account for only a small percentage of this total. As a result,

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EU project procurement cannot be regarded typical of the UK's entire procurement
system.
The UK is an outlier due to its heavy use of limited procedures; it is the only MS in which
open systems are not used for most contracts. This is especially noteworthy given the fall
in the usage of restricted tenders elsewhere in the EU. Restricted procedures are
preferred by UK public entities because they limit the number of tenderers per contract,
lowering the cost of analysing bids and bidding for candidates. However, due to the high
quality of offer submissions necessary, the two-stage tendering process takes longer than
an open approach and might be more restrictive for potential suppliers to comply with.
With distinct legislative regimes for England, Wales, and Northern Ireland on the one
hand, and Scotland on the other, the UK's administrative structure has an impact on its
procurement system. Procurement is considerably more decentralised in Wales and
Northern Ireland, with national authorities in charge.
The UK procurement system, like that of numerous other MS, is undergoing a wave of
reforms, the second in the last five years. The purpose of these reforms is to increase
procurement expertise in the United Kingdom at all levels while also increasing
standardisation and centralization.
VIII. Cost Benefit Analysis (CBA) of the initiative
The platform is thought to have resulted in overall government spending savings of up to
25% while also improving openness and efficiency in public procurement. When fully
operational, the platform's savings will have a substantial impact on reducing the country's
fiscal deficit. In addition, it resulted in a slew of intangible advantages over the previous
approach.
The taxpayer's money is being used wisely, according to the individual. Due to the
competitive environment created in the first year of deployment, 2003–04, the
departments realised considerable cost savings of Rs 255 crores (20 percent decrease
in cost) for procurement transactions conducted on the e-procurement platform. The
difference between the expected procurement cost and the contract award value is used
to calculate cost savings. Over time, the cost savings have stabilised at roughly 8% of the
transaction value. Over the last four years, the operations are expected to have saved
roughly Rs 2,800 crores in costs. Furthermore, government departments have saved
significant amounts of money (Rs 3–4 crores per year) on print media advertisement costs
because e-procurement tender notices are significantly shorter than traditional tender
notices, containing only basic information such as the name of the work, estimated costs,
and the URL of the e-procurement site for more information.
Massive delays in product/service delivery from suppliers, as well as payment delays from
buyers

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There is a trust-based platform with real-time monitoring to ensure that products and
services are delivered on time. Buyers are also required to make payments within ten
calendar days of receipt generation, failing which a punishment will be imposed
IX. The Technology dimension of the initiative
The portal has a 3-tier architecture scalable to n-tier. Each of the three tiers is -
Tier of Presentation
Two load-balanced web servers running the Microsoft Windows® 2000 Advanced Server
operating system and Internet Information Services (IIS) version 5.0 provide the
presentation tier. Two HP ProLiant DL 580 dual-processor PCs with 2 gigabytes (GB) of
RAM and RAID 5 characteristics host the web servers. The web servers are separated
from the rest of the network by external and internal firewalls, forming a DMZ.
Tier of Business Logic
The business logic is packaged using Microsoft COM+ technology and is responsible for
a variety of functions such as authentication, authorisation, and workflow management.
The display tier and the business logic tier are cohosted on the same servers.
Tier of the XML Data Layer
Communication with online services is handled by the XML data layer. On the business
logic tier, the XML data layer is cohosted. Tier 1 of the database Microsoft SQL ServerTM
2000 Enterprise Edition, part of Microsoft Windows Server SystemTM, integrated server
software, and Windows 2000 Advanced Server run the 60 GB relational database. Two
HP ProLiant DL 580 dual-processor machines with 2 GB of RAM and RAID 5 capabilities
host the database. To achieve high availability, the servers are configured in a two-node
active/passive cluster. A system area network is used for storage. The Hyderabad
manufacturing location is backed up by a catastrophe recovery site in Delhi.
XI. Secondary Data Analysis-
For secondary data analysis we have taken the data from e-procure dashboard. Some
broad parameters of the central procurement portal are
1. 12,52,436 – No. of Tenders from 2014
2. 46,32,611 Cr Rs– Total Tender Value
3. 42,31,685 – No. of Bid Received
4. 9,036 – No. of Organisations
5. 1,63,290 – No. of Bidders

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Now let us look at detail at some of the KPI that are tracked by the government from the
central procurement portal
Graph 1,2: Tenders Published by Number and Value across years
This graph shows the total value and number of tenders has decreased steadily since
2017. This has coincided with the GDP decrease and also shows that government has
curtailed spending as the gross domestic product of the nation has decreased. The impact
of Covid is also clearly visible.

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Graph 3,4: Tender Category by Number and Value across the years
We can see that the highest percentage of tenders are given in the works category that
includes infrastructure spending and accounts for a major chunk of all government
spending. This trend is clearly observable across the years.
Graph 5: Top 10 Product Category Wise No. Of Goods Tenders Published - Fin. Year -
2021 - 22
From this graph we can see that the highest percentage of procurement by value in the
goods category has taken place in the electronics, medical and food category. As the rise
of digital India we can see the rise of electronics and healthcare spending.

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Grpah 6: Top 10 Product Category Wise No. Of Services Tenders Published - Fin. Year
- 2021 – 22
From this graph we can see that after miscellaneous services the major chunck of tenders
account for consultancy and manpower tenders. Consultancy’s help the government
tackle various challenges and implementation of various schemes.
Graph 7: Top 10 Product Category Wise No. Of Works Tenders Published - Fin. Year -
2021 - 22
We can see that infrastrure works in the civil domain that is highways and roads account
for a major chunk of all tenders in the works department.

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Graph 8,9: Tender Type by Number and Value across the years
Types of Tenders -
OPEN - Open Tenders,International Competitive Bid,National Competitive Bid
Limited - Closed Limited,Limited,Closed
Others - EPC Contract / Empanelment,Expression of Interest,Single
Open tenders form a majority of all tenders awarded and published on the central
procurement portal as these are the most transparent type of tenders and allow space for
most competition and participation from a wide variety of players.

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Graph 10,11: Tender Status by Number and Value across the years
Here No.of Tenders includes open Tenders,Limited Tenders and Single Tenders
Graph 12: No. of MSME Bidders vs. Non-MSME Bidders - Year Wise
We can see that MSME comprise only a very very small percentage of all bidders and a
karge portioin of the bids are won by legacy bidders and large organisations which have
the muscle power to giver deeper discounts. Government should bring in more steps to
increase the participation of MSME firms in the Central procurement portal.
Graph 13:Number of Tenders Published - Last 3 Years
Here we can see that the seasonal distribution of tenders has remained fairly constant
over the past three years.
XII. Impact created by initiative
The process of procuring products electronically via the internet is known as an e-
procurement system. It aids in the reduction of tendering cycle time as well as the majority
of indirect expenditures. The procurement process is more transparent as a result of this
procedure. The eProcurement system can be accessed quickly and conveniently using a
computer and a reliable internet connection. The procurement portal offers a number of
benefits, including information on the most recent active tenders, the tender timetable,
and the tenders that are about to close. The site also allows users to look for tenders

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based on several parameters such as department, product type, and value. There is also
a 24-hour helpdesk available for any questions or concerns about the tenders portal or
any bid.
The bid documents that are submitted through the portal are digitally signed using Digital
Signature Certificates (DSC), which are equal to a real signature.
-- Social Impact
· The e-procurement portal has facilitated the implementation of the Procurement Policy
of 2018, making it more inclusive for MSEs and people from the SC/ST Category.
· The study will help determine the impact of the portal on social parameters like the
standard of living of the entrepreneurs and MSEs associated with the portal.
· Abolition of Contractor cartels
The automated tendering procedure is entirely confidential. The names of the
participating bidders are only revealed after the departments have opened bids on the
predetermined day and time. This has prevented suppliers from creating cartels and
allowed more real providers to participate. The elimination of supplier syndicates/cartels
provided a level playing field for suppliers, allowing authentic suppliers to benefit from
greater chances. Due to the competitive climate provided by e-procurement, government
agencies have also gotten the most value for taxpayers' money.
Bidders' Empowerment
Previously, suppliers had to sift through many publications to keep track of tenders issued
by various departments. The e-procurement exchange makes all procurement requests
from multiple departments available to suppliers in one place at no cost. Suppliers can
now engage in government bids round-the-clock, remotely, from the comfort of their own
offices, at a significantly reduced cost of the transaction.
-- Governance Impact
Using entirely open, rigorous, and efficient procurement methods
Transparency
Tender documents were hosted on a website for free download from the tenders were
published in an e-procurement system. Bidders are no longer reliant on department staff
to issue tender documents. The capacity for bidders to access information online has
decreased the need for human interaction with department employees in pre-and post-
tendering activities, which has helped reduce subjectivity and corruption in the
procurement process. The site immediately provides bidders with information on
transactions, the progress of evaluation, and contract award. Transparency in

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procurement processes has improved the Government's image and dramatically reduced
the number of negative media headlines on procurement issues.
Tender cycle time is reduced.
Automated workflows and process simplification have increased procurement
departments' internal efficiency and lowered tender lead times from 120–180 days in the
traditional form to 36 days in the e-procurement mode.
Process simplification
From the start, efforts were made to standardize procurement processes and bid forms
across diverse works departments. Today, all departments/PSUs/urban local bodies
involved in procurement use the same tendering process and biddocuments. The manual
processes are being re-engineered to increase efficiency and reduce subjectivity in
departmental tender review.
Management information system
A variety of management information system reports are available on the e-procurement
platform. This has increased the amount of information available to government agencies
for monitoring and analyzing public procurements. Previously, gathering information on
the status of procurements from numerous procurement agencies around the state was
time-consuming, and the data's integrity was questioned.
-- Economic Impact
Savings from Taxpayer Funds
The taxpayer's money is being used wisely, according to the individual. Due to the
competitive environment created in the first year of deployment, 2003–04, the
departments realized considerable cost savings of Rs 255 crores for procurement
transactions conducted via the e-procurement platform. The difference between the
expected procurement cost and the contract award value is used to calculate cost
savings. Over time, the cost savings have stabilized at roughly 8% of the transaction
value. Over the last four years, the operations are expected to have saved approximately
Rs 2,800 crores in costs. Furthermore, government departments have saved significant
amounts on print media advertising costs because e-procurement tender notices are
significantly shorter than traditional ones, containing only basic information such as the

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name of the work, estimated costs, and the URL of the e-procurement site for further
details.
-- Environmental Impact
E-procurement can help companies combat environmental degradation, a lack of raw
material resources, and rising pollution levels by allowing them to reduce paper-based
activities throughout the dematerialization process, such as digital archives, reduce
inventory levels by getting materials just in time, and manage all transactions between
organisations and their business processes, as well as connecting firms and their
business processes directly with suppliers. An effective e-procurement system aids a
company in organising its connections with its most important suppliers, reducing supplier
difficulties and improving customer service, as well as shortening the entire purchase
process and improving its quality.
E-procurement benefits suppliers as well: it allows companies to eliminate low-rated
vendors.
XIII. Stakeholders Analysis
In the eProcurement System/Organisational Structure Identification of stakeholders Any
individual or functional area that "touches" the systems, tools, or information maintained
by e-procurement might be considered a stakeholder. External contacts like as suppliers
and outsourcing partners, as well as people at all levels of the organisation, may be
included. Within a same organisation, many procurement processes may occur. It may
be important to search the full agency for eligible stakeholders and familiarise yourself
with the e-numerous procurement's business rules. The table below gives an overview of
functional procurement sectors and their e-procurement options.
Stakeholder management It is crucial to communicate the benefits of e-procurement to
suppliers while managing them, as their participation is critical to success. Explain what
e-procurement can and cannot achieve, and then follow up with frequent progress reports
and verifiable indicators. These messages are part of a comprehensive communications
strategy that will keep key stakeholders informed and manage expectations. Getting
stakeholders to participate might be difficult, especially if they don't understand the value
of the implementation to them and their functional area. A successful model is a cross-
functional team with members from each functional area. As well as acting as product
champions, the team can assist with testing, development, and training. Here are a few
instances of how well-managed stakeholders at various levels within an organisation can
have a good impact on an e-procurement implementation:

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The Executive Sponsor can guarantee that new policies and procedures are put in place
to boost uptake of e-procurement by spearheading change management operations by
examining and modifying local policy and procedures that will be impacted by the
implementation.
End-users demand a simple and quick purchasing experience. As a result of e-
procurement, their roles and duties frequently shift. Changes should be recognised and
conveyed in such a way that they can absorb the information and apply it to their work
processes.
3 key stakeholders in ensuring quality on GeM
Quality on GeM
· Health of the online platform
· Quality of products/services transacted through the platform
SPV (manages the platform) responsibilities include:
· Highly available, robust marketplace infrastructure and processes
· Open marketplace with complete and validated and functionalities
· Generic and not customized servicing, but high responsiveness to user issues
· Tools for decision support to ensure seamless buying experience
Buyer responsibilities include:
· Fair and non-restrictive buying guidelines
· Backend processes supporting e-procurement purchase behaviour (online,
paperless, contactless)
· Diligent selection of products/services on offer while defining bids
· Collaborative and consultative mindset to improve e-procurement experience
· Adherence to service level commitments
Seller responsibilities include:
· Sharing correct and complete information to ensure bona fide usage of the open,
trust-based system
· Providing high quality of offer (clean and updated catalogue, competitive pricing)
· Compliance to procurement guidelines and standards
· Collaborative approach to ensure platform inclusiveness eg.high geographical
coverage
· OEM transparency and openness of processes eg. High geographical coverage
Here are some cases of how well–managed stakeholders at various organizational levels
may favorably affect e-procurement implementation:

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—Key stakeholders may spearhead change management efforts by examining and
revising local policies and procedures that will be affected by the implementation.
—The Executive Sponsor can ensure that new policies and processes are put in place to
boost e-procurement adoption.
― End consumers expect a quick and simple purchasing procedure. As a result of e-
procurement, their roles and duties frequently shift. Changes should be detected and
conveyed in such a way that they can absorb the knowledge and integrate it into their
work routines.
XV. References
References
[1] https://www.indiatoday.in/pti-feed/story/spv-to-operate-government-e-marketplace-
portal-for-purchases-907356-2017-04-12
[2] https://www.gem.gov.in
[3] https://yourstory.com/2016/08/indian-govt-e-marketplace/
[4] https://www.livemint.com/Politics/bCIm1uXvObSFVImfU3PvJM/Public-procurement-
can-boost-innovation.html
[5] http://www.navhindtimes.in/local-business-keen-on-coming-on-board/
[6] http://www.navhindtimes.in/the-state-has-to-take-the-initiative-to-popularize-gem/
[7] https://www.entrepreneur.com/article/275379
[8] https://www.msn.com/en-gb/health/mindandbody/arun-jaitleys-2016-budget-
speech/vi-BBq8A7V
[9] https://yourstory.com/2016/06/government-portal-procurements/
[10] National Mission E-Book published by the Indian Government, accessible at
https://assets-bg.gem.gov.in/resources/pdf/national-mission-report.pdf
[11] http://www.ijcrt.org/papers/IJCRT1704123.pdf

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[12]
https://doe.gov.in/sites/default/files/Manual%20for%20Procurement%20of%20Goods%2
02017_0_0.pdf
[13] Official twitter account of GeM India, https://twitter.com/GeM_India
[14] Official government website for GeM, https://gem.gov.in/
[15] https://timesofindia.indiatimes.com/business/india-business/startups-want-
government-e-market-to-list-their-services-give-business/articleshow/67017932.cms
[16] https://economictimes.indiatimes.com/news/economy/policy/government-mandates-
preference-to-india-made-vehicles-in-public-procurement/articleshow/67009970.cms
[17] https://govinsider.asia/inclusive-gov/radha-chauhan-ceo-government-e-
marketplace-india/
[18] https://www.financialexpress.com/economy/womaniya-on-gem-govt-initiative-to-
enable-women-entrepreneurs-to-sell-items-online/1443636/
[19] http://www.uniindia.com/prabhu-launches-swayatt-on-gem/business-
economy/news/1504967.html
[20] https://medium.com/mojoverse-the-business-weekly/government-e-marketplace-
gem-everything-msmes-need-to-know-4ed4234afbd9
[21] https://yourstory.com/2019/06/startup-india-gem-portal-orders-dpiit-secretary
[22] https://www.thehindubusinessline.com/economy/govt-to-shut-down-dgsampd-this-
month/article9893118.ece
[23]
http://economictimes.indiatimes.com/articleshow/71485893.cms?utm_source=contentofi
nterest&utm_medium=text&utm_campaign=cppst
[24] https://www.business-standard.com/article/pti-stories/bihar-to-reconstitute-treasury-
accounts-directorate-119070201378_1.html
[25] https://www.jagranjosh.com/current-affairs/government-launches-womaniya-on-
government-e-marketplace-1547538520-1

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[26] https://blogs.worldbank.org/governance/how-government-e-marketplace-
revolutionizing-procurement-india
[27] https://www.mahanadicoal.in/MMmanual/pdf/GeM_handbook.pdf
{28}
https://cdn.s3waas.gov.in/s367d96d458abdef21792e6d8e590244e7/uploads/2018/08/2
018081291.pdf
[29] https://procurementobservatoryraj.in/pdf/Implementation_of_e-
procurement_in_the_Government_of_Andhra_Pradesh-A_Case_Study.pdf
[30] https://www.drishtiias.com/daily-updates/daily-news-analysis/government-e-
marketplace