There are some basic principles of the tendering process that makes it one of the most effective and beneficial long-term opportunities for a business. In India, government eProcurement has come a long way. From manual paper-based tendering, the process today has moved online, to keep tendering fair, competitive, and transparent.
And while the process has been evolving and improving with time, it has also expanded its general principles of contract and tender rules to ensure that there is greater participation from all eligible suppliers and bidders in India.
It is not surprising that the government eProcurement portals – the CPPP and GeM – has been so widely accepted and successful. Launched in 2016, the Government eMarketplace (GeM) has already achieved an annual procurement of ₹1 lakh crore and is expected to reach ₹1.5 lakh crore by 2022-23, with almost 57% of order value coming from the MSME sector businesses. (Source: The Economic Times, March 2022).
So, what makes eTendering so beneficial? Listed below are some of the key tendering principles that explain why tendering is a preferred solution for business growth among most companies/MSMEs in India.
Guiding principles to the tender process in India
Government tenders can only be won by large enterprises!
You have to bid low to win government contracts!
Tendering is too time consuming and a complex process!
You must know people and have the right contacts to stand a chance at winning!
These are misconceptions that people have about government tendering. Let us debunk these myths about the government eProcurement process.
Government eTendering today is a fair, transparent, and online process. The Central Public Procurement Portal (CPPP) was launched with the objective of being the one platform where all government departs can announce their tender requirements.
Any eligible business in India can bid for relevant tenders. Every RFT tender notice comes with a detailed tender requirements document that lists information such as: Tender ID, opening and closing dates, type of tender, tender fees, location, bidder’s eligibility and qualifications, any specifications, technical requirements and more.
If you are new to tendering or keen on it, understand that there are some guiding principles in eTendering to establish fair rules for private and government contracts.
1. Keep competition fair and open to all
It’s a common myth that only large corporates can bid and win government contracts. As can be seen from the statistics stated above, this is untrue. On the GeM portal, a staggering 57% of MSMEs won government contracts!
It’s true, that there is a process to abide by especially with reference to how to fill tender documents, eligibility for tenders, submitting tender fees on time, etc. but winning tender contracts is for all and not limited to large businesses.
The online tendering process was established to encourage more businesses to participate in tendering and keep the tendering process competitive and open to all. This is one of the four key principles of the tendering system. It is also less time consuming and complex, there are detailed FAQs, bidder’s manual kit, and dedicated feedback and customer support on GeM and CPP portals to ensure that all eligible bidders can bid hassle-free and keep the process fair.
- Detailed tender documents for visibility to all eligible suppliers/bidders
- Bidding open to MSMEs, start-ups, and emerging businesses
- Online, easy-to-follow steps to simplify tender application submission
- Milestone notifications and communications sent via email/SMS so that no updates are missed
- Tender status and results of tender available online for all to view
It may also be noted that in most cases, tenders floated are open tenders (as against closed or negotiated tenders) to keep competition open to more bidders.
2. Ensure evaluation is thorough and fair
This is probably the most important principle of tendering – to assess all tender applications fairly without any bias.
The eTendering process ensures that all tender applications are duly filled in and submitted within due dates, to avoid late entries. The tender application evaluation is done by a neutral team based on the documents submitted by the bidders. Once the tender evaluation process commences, it is carried out in two main steps:
- Technical assessment: Where the application is evaluated on technical aspects such as design, infrastructure, production capacity, skill set, business expertise and experience, etc.
- Financial assessment: Where only applications that fulfil the technical requirements are evaluated, to assess the financial aspects
Though applications are tagged as L1, L2, L3 (L1 being the lowest bidder), it is not the deciding factor. The tender is usually awarded to the bidder who offers the most value-for-money (i.e., quality products, acceptable delivery timelines, and competitive pricing).
Moreover, there is a well-documented evaluation criteria set out and all tender applications are evaluated accordingly, to ensure the process treats all applicants fairly. In most cases, before tenders are awarded, a discussion takes places to answer queries (for both buyers and suppliers), further adding to the principle of fairness and transparency.
Key tender status updates are available on the website, and the results of the tenders are also published online.
- Evaluation is a fair process and tenders are awarded not to the lowest bidders, but to the bidder who offers the most value-for-money
- Almost 20-25% of all procurement is for MSMEs to encourage greater participation and inclusion
- There are discussions held with suppliers to resolve queries and promote fairness and openness
3. Make the tender process transparent
Transparency is a guiding principle of the eTendering module. In earlier times when tenders were submitted in ‘packets’ there was little transparency. Also, with tenders published in newspapers or announced on TV/radio, there were chances of missing a suitable opportunity. Moreover, with the tender process being held offline, there were location constraints as many eligible bidders would be unable to travel to different cities to attend the tender hearing and Q&A sessions.
The new eTendering process for government procurement does away with these challenges. As one of its key principles, the tendering process today is transparent and quick, with no geographical limitations.
- Eligible bidders from across the country (and even globe) can participate in the eTendering process since it’s carried out online with no need for physical presence
- All the latest tender announcements can be viewed on the portal
- Users can view tender details without logging into the CPP and GeM portal (information is publicly available); tender documents pdf can also be downloaded
- Tender status, cancelled tenders, corrigendum, results of tenders (Bid Awards) are all published on the portal
- Support is available 24×7 through email, phone, feedback form, chat and general FAQs
4. Provide feedback when requested
If your tender application is rejected and you lose the bid, it is natural for you to understand why your tender bid failed and how you can improve.
For instance, if your tender was rejected on the grounds of non-compliance or missing tender documents or non-payment of tender fees – you can use this feedback to ensure that your next tender application does not make the same error.
Years ago, the tendering process did not have an established feedback mechanism in place. This naturally led to disappointment as many bidders wanted clarity and feedback on how to improve their tender application.
As a basic principle to online government tendering, a mechanism for providing feedback to bidders on why their tender applications got rejected was established. Today, in most cases, bidders are sent formal communication as to why their tender bids were rejected. If requested, a more detailed response is also provided.
eTendering process: The way ahead
So now that you understand what are four general principles that apply to tendering, it’s time for you to give tendering a try. These principles are some of the core ones that has been observed about the eProcurement system. There are other rules and guidelines that government tendering follows, but these four are the most noteworthy ones.
The Central Public Procurement Portal was built with the objective of being the single platform for access to information on government procurement. Whether its a state tender (e.g., Maharashtra state tenders) or produst/service tenders (e.g., fire safety tenders), all government departments would need to publish their tender requirements on the portal to make it easily available to all.
Note: This article is for information one. All potential bidders are requested to visit the official tendering portals and check the latest updates and information shared.