The Government e-Marketplace (GeM) portal has become a crucial tool for businesses in India to participate in government procurement processes.
One of the most important aspects of doing business on GeM is understanding the different types of bids available and how they work. For sellers and service providers, having a clear understanding of the bidding process can help them secure government contracts more effectively.
In this post, we’ll explore the various types of GeM bids, and how they usually work.
Why Are Bids Important on GeM?#
Before diving into the types of bids, let’s first understand the importance of participating in bids on the GeM portal.
- Transparency: The bidding process on GeM is highly transparent, ensuring that all sellers have equal opportunities.
- Increased Business Opportunities: By participating in as many bids as possible and relevant, sellers can significantly increase their chances of securing large orders from government departments.
Now, let’s look at the types of bids on GeM.
Understanding GeM Bid Types#
GeM bidding is primarily divided into two types, each catering to different procurement scenarios:
1. Standard Bid (Tender Bid)#
The Standard Bid process is the most common form of bidding on the GeM platform. Sellers submit their offers in response to a specific tender or requirement posted by government buyers.
The bidding process is open for a designated time, during which sellers can participate. Once the bidding period ends, the buyer evaluates the offers based on predefined criteria, often awarding the contract to the Lowest Price (L1) bidder.
Key Features:
- Simple bidding process.
- Evaluate based on the price quoted and the technical compliance of the product.
- The bid can either be a Single Packet or Two Packets, depending on the complexity of the procurement (more on this below).
Example: A government department posting a requirement for office furniture. Sellers participate in those bids, and the lowest-priced, technically compliant bid is selected.
2. Bid to RA (Reverse Auction)#
The Bid to RA format combines the traditional bidding process with a Reverse Auction. Initially, sellers submit their offers in response to a tender. After the initial bid submission phase, the Reverse Auction (RA) phase begins only with technically compliant or a short group of sellers. Sellers can reduce their prices in real time, competing with each other to offer the lowest possible price.
Key Features:
- Two-stage process: First, sellers submit their standard bids, and then the RA phase is started.
- The lowest bid at the end of the RA wins the contract.
- This method encourages competitive pricing and transparency.
Example: A buyer posts a tender for electronic devices. Sellers submit their initial bids. Afterwards, the RA phase starts, allowing sellers to lower their prices in real-time to win the contract.
Types of Bids Based on Product Categories#
The GeM portal accommodates a wide range of products and services, and the bidding process is tailored according to the nature of the product. Sellers may encounter different bidding formats based on the product category they are offering. Below are the key types of bids categorized by product listings:
1. Normal Category-Based Bid or Product Bid#
In this format, the product category already exists on the GeM portal, making it easier for sellers to participate. Sellers offering products from standard categories can directly submit their bids or participate in reverse auctions. Since the product specifications are predefined by GeM, sellers need only ensure that their product meets the specified parameters before submitting their bid. The bids of this category must remain open for a minimum of 10 days.
Key Features:
- Category and specifications are predefined on GeM.
- Sellers need to comply with the existing catalogue parameters.
- Ideal for commonly procured items like office supplies, electronics, etc.
Example: A buyer posts a tender for laptops under the "Electronics > Laptops" category. Sellers offering laptops matching the pre-listed specifications can directly submit their bids.
2. Custom Catalogue-Based Bid#
In cases where the required product does not fall under any existing category on GeM, buyers can opt for a Custom Catalogue-Based Bid. Here, the buyer defines the product specifications and invites sellers to submit bids based on the custom requirements. This type of bid is typically used for niche or unique products that aren't covered under the normal categories. Custom bids must remain open for a minimum of 21 days.
Key Features:
- Buyers can create custom specifications for unique or niche products.
- Sellers must carefully review the custom specifications before submitting their bids.
- This method allows flexibility for products not listed in standard GeM categories.
Example: A government agency requires a specialized scientific instrument that is not listed on GeM. The buyer creates a custom catalogue with detailed specifications, inviting sellers to submit bids.
3. BOQ (Bill of Quantities) Based Bid#
BOQ-Based Bids are used when a project requires multiple products or services that need to be supplied together. In this format, the buyer issues a Bill of Quantities (BOQ) document, detailing the specific items and their quantities. Similar to custom catalogue based bids, it has to remain open for a minimum of 21 days.
Sellers are required to quote prices for each item listed in the BOQ, and the total value of the bid is evaluated based on the entire package. This type of bid is often used for construction projects, infrastructure development, or other procurement needs that involve multiple products or services.
Key Features:
- Requires detailed pricing for each item in the BOQ.
- Buyer can proceed with the bid using any of the available evaluation methods like Total Value Wise or Item Wise.
- Often used for complex projects involving multiple items or services.
4. Service Bid#
While GeM primarily facilitates product procurement, it also supports the procurement of services through Service Bids. These bids are used when government entities require services instead of tangible products. Service bids follow a different process, as the focus shifts from product specifications to service deliverables, expertise, and cost-effectiveness. Various types of services, from IT consulting and manpower supply to maintenance contracts, can be procured through service bids on GeM.
Key Features:
- Service Catalogue: GeM has a predefined service catalogue, allowing buyers to select and define service requirements. Sellers offering similar services can participate.
- Custom Service Specifications: If a service is not available in the predefined catalogue, buyers can create custom specifications for unique service requirements.
Example: A government department may post a service bid for annual IT infrastructure maintenance. Sellers offering IT maintenance services can participate by submitting their proposals, detailing their expertise, manpower, and pricing. The evaluation is based on the technical and financial aspects of the proposal.
Single Packet and Two Packet Bids#
GeM bids can also be categorized based on their opening method: Single Packet or Two Packet.
1. Single Packet Bids#
A Single Packet Bid involves a single-stage evaluation process where all submitted bids are evaluated at once. After bids are opened, a comparative statement is created, listing all the vendors and their bids. Although all vendors appear in the statement, their bids may or may not be technically suitable. Buyers evaluate both the price and the technical specifications at the same time. In this type of bid, all the required documents, technical specifications, and financial quotations are submitted in one single packet or envelope.
Best For: Simple procurement processes with fewer technical requirements.
Example: Procuring standard items like office supplies where the technical specifications are straightforward and don’t require an additional round of evaluation.
2. Two Packet Bids#
Two Packet Bids are a more comprehensive bidding process where evaluation happens in two stages. First, the technical bids are opened and evaluated by a committee to check if the products meet the technical specifications. Only technically qualified bids are then moved to the second stage, where the financial bids are opened, and the contract is awarded based on price.
Best For: Complex procurements where technical compliance is critical before considering the price.
Example: A tender for high-tech equipment where technical parameters must be thoroughly assessed before evaluating the price bids.
Conclusion#
Understanding the different types of bids on the GeM portal is essential for successful participation. Whether you are participating in a standard bid, a reverse auction, or a more complex two-packet bidding process, knowing how the system works will help you better position your offerings and increase your chances of winning government contracts.
For sellers looking to make the most out of GeM, it’s important to stay informed about bid types, and best practices to remain competitive in the government procurement space. You can contact us for any support or full detailed training on the GeM Portal.
