GeM Overview1. Rule 141 A and GFR Purchase Rules

2. Procedures for Payment in GeMKS Gopinath Narayan, IAAS

Professor

National Institute of Financial Management

Faridabad, India

narayanKSG@nifm.ac.in

Insertion of Rule 141-A after Rule-141 in General Financial Rules (GFR), 2005

• The DGS&D will host an online Government e-Marketplace (GeM) for common use Goods and Services.

• The GeM would be dynamic, self-sustaining and user friendly. DGS&D will ensure adequate publicity including periodic advertisements in newspapers of the GeM and the items to be procured through GeM for the prospective suppliers.

• The procuring authorities will satisfy themselves that the price of the selected offer is reasonable.

Rule 141A (Contd..)

(GeM) may be utilized by Government buyers (at their option) for direct on-line purchases as under:

a) Upto Rs.50,000/- through any of the available suppliers on the GeM, meeting the requisite quality, specification and delivery period;

b) Above Rs.50,000/- through the supplier having lowest price amongst the available suppliers on the GeM, meeting the requisite quality, specification and delivery period. GeM will also provide tools for online bidding and online reverse auction which can be used by the Purchaser.

The above monetary ceiling is applicable only for purchases made through GeM. For all other purchases, GFR Rule 145, 146, 150 and 151 will apply.

Rule-145: Purchase of goods without quotation

• Purchase of goods upto the value of Rs.15,000/- (Rupees Fifteen Thousand) only on each occasion may be made without inviting quotations or bids on the basis of a certificate to be recorded by the competent authority in the following format.

• “I, ___________________, am personally satisfied that these goods purchased are of the requisite quality and specification and have been purchased from a reliable supplier at a reasonable price.”

Rule 146. Purchase of goods by purchase committee

• Purchase of goods costing above Rs. 15,000/- (Rupees Fifteen Thousand) only and upto Rs. 1,00,000/- (Rupees One lakh) only on each occasion may be made on the recommendations of a duly constituted Local Purchase Committee consisting of three members of an appropriate level as decided by the Head of the Department. The committee will survey the market to ascertain the reasonableness of rate, quality and specifications and identify the appropriate supplier. Before recommending placement of the purchase order, the members of the committee will jointly record a certificate as under.

• “Certified that we _____________________, members of the purchase committee are jointly and individually satisfied that the goods recommended for purchase are of the requisite specification and quality, priced at the prevailing market rate and the supplier recommended is reliable and competent to supply the goods in question. “

Rule 150: Advertised Tender Enquiry

Rule 151: Limited Tender Enquiry

Government e-marketplaceProcedures for Payments to Sellers/Suppliers in

Government e-Marketplace

\

Procedure for Payments

•OM Dated 20th September 2016 (MoF, DoE,Procurement Policy Division)

•In pursuance to Rule No. 141-A of GFR 2005, thefollowing procedures are prescribed for makingpayments to the Sellers / Suppliers in GeM whichshall be complied and adhered to by all concerned:

• The Government Buyer i.e the concerned Programme Division or Administrative Unit ina Ministry/ Department will place the Contract / Supply Order I Purchase Orderonline after taking prior approval of the Competent Authority for procuring aparticular Good or Service. Inter-alia, the Contract/ Supply Order I Purchase Orderform will also contain the following fields including fields for payment relatedprocesses:

a) Administrative approval of the Competent Authority indicating the designation of the approving authority,

b) Approval of Competent Financial Authority indicating designation of the officer;

c) Whether IFO concurrence required? (Yes/ No)

d) If yes, then IFD Diary No. & Date……….

e) Budget Head of Account and Year. Major/Minor/Sub-head/Detailed-head/Object Head as in

Detailed Demands for Grants.

f) Budget availability as on date (Yes/No)

g) Amount (Contract Value): Rs.. ... . (Budget to be blocked)

h) If expenditure is committed for more than a year, the year-wise details - (portal should generate

a Liability Register for recording multi-year payment commitments, the format for which is

prescribed in Rule 53

Procedure for Payments2. When these fields are duly captured the Buyer will be in aposition to place the Order online. The GeM portal will generatea:a) Sanction Order (Sanction Order.pdf)b) Contract Agreement/Supply Order/Purchase Order and

these will be digitally signed by the Buyer. ContractOrder.pdf

c) These documents duly signed digitally by the Buyer will bemade available online to the concerned DDO, PAO andSeller/Supplier.

d) The DDO and PAO shall have access to the ContractAgreement /Supply Order/Purchase Order online In orderto ensure that the Bill is generated at the stage of paymentin accordance with the contractual provisions.

Procedure for Payments

3. The GeM portal will send the Sanction Order details to PFMS/ corresponding Payment system of Ministries of Railways orDefence or Department of Post (Payment System of Railways/Defence/Post).4. On placing the Contract/ Supply Order/Purchase Order, theamount required from the relevant Budget Head gets blocked inthe PFMS/ Payment System of Railways/Defence/Post.5. Should it be necessary to amend the Contract, the amendedContract/Supply Order / Purchase Order with due approval ofthe Competent Authority and acceptance of the Seller/Supplier shall be made available to the Supplier/DDO/PAO onthe GeM portal.

Procedure for Payments

6. Similarly, in the event of cancellation of the Contract /Supply Order I Purchase Order the information would be madeavailable to the Seller I Supplier, DDO and PAO on the GeMportal. In that event, funds so blocked earlier would bereleased.

7. The Programme Division/Administrative Unit in the Ministry/Departments shall periodically review the blocked budget toensure that funds are utilized within the same financial year.

8. The performance security would be obtained from theSeller/Supplier as per Contract/Supply Order/Purchase Order,and their details reflected on the GeM portal by the Buyer.

Procedure for Payments9. On dispatch/ delivery of Goods and/or Services, theSeller / Supplier shall prepare an electronic Invoice cumBill, digitally signed, on GeM portal and shall submit on-lineto the Buyer and DDO/PAO.Invoice.pdf

10. Then GeM portal will send a SMS/ email alert to theBuyer, on submission of Invoice. This Invoice will containmode of dispatch of goods, dispatched! Delivered quantitywith date and all inclusive price claimed based on digitallysigned Contract / Supply Order/Purchase Order data. Incase Services are procured, the required data as perContract / Supply Order / Purchase Order may beincorporated in the invoice.

Procedure for Payments

11. The Buyer/consignee receives the Goods/Services andissues an online Provisional Receipt Certificate (PRC), within48 hours, on 'said to contain basis' on the GeM portal withhis/her digital signature, mentioning the date of Receipt(From this date of PRC. the period of 10 days forconsignee's/buyer's right of rejection and return policywould be applicable).

PRC.pdf

Provisional Receipt Certificate (PRC)

Procedure for Payments

11. After verification Including assessment of quality andquantity, the Consignee will Issue on-line digitally signedConsignee's Receipt & Acceptance Certificate (CRAC) forthat stage within 10 days of date of issue of PRC.

CRAC.pdf

12. The CRAC would clearly indicate:

• the Order quantity

• rejected quantity (if any, with reasons for rejectionincluding shortages/damaged /unaccepted quality)

• quantity accepted and cleared for payment

Consignment Receipt and Acceptance Certificate (CRAC)

Procedure for Payments

13. If the consignee does not issue CRAC within 10 days, on11th day from the date of receipt indicated in PRC, GeMSystem / Portal would auto generate CRAC for the fullquantity indicated in the PRC as deemed accepted forpayments.

14. This will be made available on GeM to Buyer/ Seller andalso the concerned DDO and PAO. The GeM portal wouldgenerate a unique serial number for CRAC relating toconcerned DDO & PAO, so that the payments are madeseriatim.

Procedure for Payments

15. Based on Contract/Supply Order/Purchase Orderincluding amendments (if any) and CRAC for the acceptedquantity and the revised Invoice cum bills for acceptedquantity digitally signed on GeM, System/Portal wouldcompute the net amount payable duly deducting the TDS (ifany) and Liquidated Damage (Lo) amount, if any (to becomputed if actual date of delivery mentioned in the PRC isbeyond the last date of delivery Period given in theContract) tor payment.

Procedure for Payments

16. GeM System Portal will generate seriatim on-line billshaving detail of Gross amount, deductions and net payableamount based on details provided by Buyer.

17. After verification of the correctness of the amount andsigning the bills digitally, DDO shall submit the same to PAOfor e-payment on PFMS /Payment Systems of Railways/Defence/Post. These internal processes shall be visible tothe seller/supplier on the portal.

Procedure for Payments

18. After pre-check PAO shall, debit the Government account,releasing the corresponding payment through PFMS/ PaymentSystem of Railways/ Defence/Post to be credited Into thebank account of the Seller/Supplier.

19. The payment so released shall be credited to the Seller lSupplier's account within 24 hours (excluding public holidays)SMS alerts shall be sent to the Seller and Buyer after thepayment is authorized by PAO and also after the confirmationof the payment by the bank.

20.The payment authorization as well as payment confirmationdetails shall be shared by PFMS Payment System of Railways/Defence/Post on the GeM portal. The PAO and DDO shallcomply with the provisions of GFR for budget implementation.

Procedure for Payments21. It is obligatory for payments to be made without any delayfor purchases made on GeM. In no case, should it take longerthan the prescribed timelines.22. The timelines after Consignee Receipt and AcceptanceCertificate (CRAC) issued on-line and digitally signed byconsignee, will be two (2) working days for Buyer, one (1)working day for concerned DDO and two (2) working days torconcerned PAO for triggering payment throughPFMS/Government Financial System/Banks for crediting to thesupplier's account.23. Any matter needing a resolution will be escalated to thenext higher level in each agency (Buyer, DDO and PAO) wherethe matter should be resolved within 24 hours In the entireprocess, payment should not exceed 10 days including holidays.

Procedure for Payments

24. GeM System / Portal would also have on-line provisionsfor generating supplementary Invoice cum Bills forclaim/refund of statutory changes In Duties and taxes, ifany, as above. A provision for all types of refunds/claimsshould be available on-line.

25. The above procedures and time lines shall be strictlyadhered by the Ministries/Departments.

Procedure for Payments

Thank you !!!

GeM OverviewPrepared by - Sh Rajesh Gupta

Director, DGS&D

What is GeM?• GeM - Government e-Market Place.

• One stop Online Market Place for common use goods andservices for government users.

• Genesis - Recommendations of two Group of Secretaries andHon’ble FM Budget Speech 2016 directives.

GeM - ObjectiveProvide government users the speed and flexibility of e-

commerce site in sourcing its requirement

Relieve government users from mundane tendering activities

To have technology enabled dynamic, self sustaining, userfriendly, fair and transparent procurement system

To promote standardization of products, demandaggregation, Make in India

Mandated by GFR – Rule 141A

• Government users at its option can use GeM for direct onlinepurchase.

• Financial Limits

Upto Rs. 50,000/- through any of the available suppliers on GeM

Above Rs. 50,000/-, through the supplier having lowest priceamongst the available suppliers on GeM

• Procuring authority to satisfy that the price of the selected offer isreasonable and meet the requisite quality, specifications and deliveryperiod.

• GeM also have facility for e-bidding and reverse auction

GeM – Essential Features

• Data Integration with Aadhaar, BAS, MCA 21, UdyogAadhaar, PAN

• Dynamic System - Online submits its products specificationparameters, prices, delivery schedule

• No Human Intervention; PMO Vision – MinimumGovernment Maximum Governance

• Pilot Phase/NeGD

26 different products and services

Terms and Condition –Sale/Purchase

• Currency - INR only

• Rates - Inclusive of all duties and taxes

• Terms of Delivery - Free Delivery at Consignee Site

• Undertaking - Offered prices in the GeM shall in no case exceedMaximum Retail Price (MRP) and/or those concurrently offered bythe Seller elsewhere including any e-commerce sites.

• Digitally e-signed offer at the terms and conditions of GeM

Terms and Condition –Sale/Purchase

• Online Purchase Order – Sellers rates and delivery schedule

• Liquidated damages for delay in supplies

• Refund Policy – 10 days

• Consignee Receipt and Acceptance Certificate

• Payment Terms & Conditions

• Dispute resolution mechanism

• No Usage charges during pilot phase

GeM: Parties• Parties in GeM

Buyer

Who can buy

How to register to buy

How to buy

Seller

Who can sell

How to register to sell

DGS&D

Role and responsibilities

• Each has its predefined role and responsibilities

Procurement Objectives• Purchaser’s Perspective

Quality products

Speed, Flexibility, User friendly

Transparency

• Seller’s Perspective

Equal opportunity to supply

Timely receipt of payment

• Terms and conditions – provision to penalise misconduct of suppliers

• Government users to ensure payment - Detailed Guidelines for releaseof Payment vide DOE OM Number 26/04/2016/PPD dated 20.09.2016

GeM – Privacy Policy• The type of data/ information shared and its purpose Personal – to uniquely identify

Non-Personal – IP address, Browser, Date and time of visit

• GeM's information & security practices and policies; and

• GeM's policy on sharing or transferring your data or information with third parties

GeM – Disclaimer Policy• Information provided on GeMNot to be used for any legal purposes

No responsibility in relation to the accuracy, completeness,usefulness

Not a statement of law

Liability for any expense, loss or damage arising out of or inconnection with the use of this portal.

Thanks