The government is planning to hire a software tech to operate its online procurement marketplace which was launched in August 2016, and some of the biggest players in the industry are ready to hunt for it. The Central govt. had recently amended the General Financial Rules and made it compulsory for all government departments and agencies to procure from the proposed GeM, the government e-marketplace.
A request for proposal has been passed in late last month that called for interested parties to apply for the contract. Officials who were aware of the matter informed that the given volumes will be transacted on the portal, the opportunity is large, possibly only next to that of the Goods and Services Tax Network (GSTN) and Aadhaar project with the contract estimated to fetch close to Rs500Crore for the technology vendor.
A senior executive at one of the country's top technology providers said, his company is interested in participating in the project after the government had made it compulsory that all its procurement must be made through GeM portal. The executive added that the government has conducted several meetings with the industry before finalizing the criteria.
Neel Ratan, executive director at audit and consultancy firm PwC, stated that it is the next path breaking project after GSTN. The model is very highly unique and only a few countries globally are having this kind of a model. The portal will look like Flipkart or Amazon for all official procurement by government ministries and departments for their common use items such as laptops, furniture or even automobiles. Officials estimate expenditure on commonly used office items at between 10% and 20% of the government's non-plan expenditure, a figure which was Rs 14.28 lakh crore for fiscal year 2016-17. That translates to potential purchases of Rs 1.4-2.8 lakh crore.
The selected technology vendor will be given 10 months to implement the project and will have to run and maintain the system for five years after it goes live. It is stated in tender document that, GeM will partner with external organizations such as banks, tax departments, etc. in order to check the authenticity of the stakeholders coming on-board. Also, Integration with agencies such as CBEC, Aadhaar, and MCA-21 will ensure more authenticity and a robust verification process.
The project comes under the authority of Directorate General of Supplies and Disposals and the portal is expected to bring about high productivity in government procurement, put a number to in all official purchases which may in turn help in negotiating the prices down due to bulk buying.
A government official told that the Centre wants to appoint a "very good" tech partner to run the project. The government is seeking open-source technology instead of going for some proprietary systems.
The project will also require to build data intelligence and analytics into it by the hired technology company, which could throw up features such as price crawling for product price reasonability, demand forecasting across departments, product recommendation and fraud analysis.
However, all companies, aren’t impressed much. An executive at another among top-five technology firm said the project didn't make too much sense. "The govt. is asking us to invest upfront without giving any estimate or guarantee of how much money we will make." Let’s see how this policy goes well and who is going to be the winner in the race.