Can startups participate in government tenders?

Are government tenders open for startups? Can startups participate in government tenders? Many startups may think that government tenders are not for them. However, it is not true.

It is a myth that due to lack of experience the government does not give start-ups an opportunity. In fact, here is an interesting statistic – according to Startup India, total value of orders served by start-ups as of 31 March, 2022 is ₹90,66,14,54,422.

Why does the government opt for awarding contracts to startups? Here is the answer. According to Startup India, “Opening government tenders up to startups improves the choices available to government bodies since start-ups are often more agile than corporate vendors and can provide cheaper, more innovative products and services.”

While there may not be specific tenders for start-up companies, government offers fair opportunities to all MSMEs and start-ups.

Startups can easily participate in public procurement process. These tenders are easily accessible from platforms such as e Central Public Procurement Portal (CPPP), Government e-Marketplace (GeM), etc. Additionally, many state government have their official procurement portals. You can also find relevant government tenders on Tata nexarc.

This article is a quick start-up guide to public procurement to help you learn about the eProcurement process, the eligibility criteria, how to prepare tender documents for bid proposal, tender fees and exemptions, and other details to help you participate in the tendering process.

Why should startups participate in tenders?

Government is considered as the largest buyer in India. As per Ministry of Commerce and Industry, GeM attained an annual procurement of more than ₹1 lakh crore in FY 2021-22. That is the volume of work.

If you think that your business is not large enough to cater to government eProcurement needs or doesn’t build products or offer services related to the government, remember that every department of the government has various needs. From procuring raw material for construction projects to requiring housekeeping services, the needs are vast and varied.

As a start-up owner, while you may not find specific government tenders for startups in India, the benefits of participating in the tendering process are plenty. Here are some of the reasons why start-ups should participate in tenders:

• You may still win a contract without prior experience: DPIIT registered start-ups are generally exempted from the prior-experience criteria. Hence, winning the contract without prior experience helps you get breakthrough for further projects.
• Assures business and hence revenue: Winning a contract, especially long-term ones, assures your business for the specified time and hence the revenue.
• Helps in building reputation: If you win and fulfil the contract, it not only helps you gain experience but also helps you in building reputation.

Are start-ups eligible to quote for government tenders?

Generally speaking, any business regardless of size, type and business activity can participate in government tenders.

However, every tender invitation specifies some specific eligibility criteria that would be required to fulfil the project. Each buying department decides the eligibility criteria depending on the scope of work, technical aspects required, quality and quantity of products/services, etc. Many a times there are various criteria mentioned in the request for tender document, these include monetary criteria, technical criteria, turnover of the business and so on.

Tenders usually have criterion of prior experience.  If you plan to quote under start-up category, your business must be recognised as a start-up by DPIIT. That is when you will be exempted from the criteria of prior experience. As a result, even if you do not have any experience in a similar project, your tender proposal will still be accepted, and you will stand a chance to win.

How to start tendering if your business is new?

• Register your business as a startup. Once you obtain DPIIT registration as a startup, your business is eligible for various schemes and incentives announced for them. These include, tax exemption, easier compliance, Intellectual property rights (IPR) fast-tracking, etc.
• Register on CPPP or GeM portal.
• Search for and find tenders suitable for your business.
• Read the tender requirements and eligibility criteria to evaluate if your start-up meets the qualifications and will be able to fulfil the requirements.
• Collate all required tender documents and prepare the bid proposal.
• Review documents, check on tender fees, and submit the bid.

What are the essential necessities for the tenders?

Depending on the eligibility criteria, the essential necessities or list of documents required for each tender changes. However, there are some common documents required for participating in every government tender.

From the documentation aspects, it is necessary to have following:

• Recognition as a startup by Department for Promotion of Industry and Internal Trade (DPIIT)
• Registration on CPPP or registration as a seller on the GeM portal
• Digital Signature Certificate (DSC) Class III

Moreover, here is a list of documents that you can keep handy while writing a tender response:

• Company profile/brochure
• Company registration certificate/Incorporation Certificate/Partnership Deed
• Company PAN Card
• Company GST
• Audited CA certificate with turnover
• Power of attorney for signing tender documents

What are the key steps to prepare your business for tendering?

• Find relevant tenders: Once you have registered on CPPP or GeM, you can start browsing through listed tender announcements made by various government departments. Shortlist tenders that are relevant for your business.
• Understand the requirements: Read the tender carefully. Check scope of work, location, eligibility criteria, and other details. Before starting preparation of your response document, ensure that you have capability and all the resources to complete the project on time. Also, determine if the mentioned project is in line with your growth goals.
• Start preparing response document: Before you actually start filling in the response document, make a checklist of all the documents and other details that have been asked for. Compile all the documents.
• Start filling: When you start filling stick to the prescribed format. Fill in all the required details. Attach copies of the required documents.
• Review your response document: Before submitting your response, review your entire document. Double check on all the facts and numbers that you have entered. Ensure you are providing adequate details. Also, analyse if your response document addresses requirements mentioned in the tender.

Do’s and Don’ts of tender filling
Do’s	Don’ts
Provide all the details mentioned.	Do not submit any extra information, irrelevant details or unnecessary literature.
Be specific. Submit only relevant information.	Don’t make it very lengthy or use lot of jargons. Make simple, to-the-point presentation.
Highlight your strengths.	Don’t submit quote that is unsustainable to your business.
Adhere to the format mentioned in the tender.
Attend pre-bod meeting.

To sum up

Participating in public procurement process is great way to grow your business. However, you need to submit your quotes wisely. Make sure that it is viable for your business from every aspect. Contract, if won, will expand your reach, ensure your consistent business and revenue too.