Public procurement Policy for SMEs Order, 2012 has been notified under section 11 of MSMED Act, 2006. The Policy is effective from 1st April 2012.
The objective of Policy is promotion and development of Micro and Small Enterprises by supporting them in marketing of products produced and services rendered by them. However, the policy rests upon core principle of competitiveness, sticking to sound procurement practices and execution of supplies in accordance with a system which is fair, equitable, transparent, competitive and cost effective.
Salient Features of the Policy
- Every Central Ministry Department/ PSUs shall set an annual target for 20% procurement from SME sector.
- A sub- target of 4% out of 25% target of annual procurement earmarked for procurement from SMEs owned by S/ST entrepreneurs.
- A sub-target of 3% earmarked for procurement from SMEs owned by Women Entrepreneurs.
- Overall procurement goal of minimum 20% has become mandatory from 1st April 2015. Later it was increased to 25%.
- Tender sets free of cost and exemption from payment of earnest money to registered SMEs.
- SMEs quoting price within price band L-1+ 15% when L1 is from someone other than SME, shall be allowed to supply at least 20% of tendered value at L-1 subject to lowering of price by SMEs to L-1.
- 358 items reserved for exclusive procurement from SMEs.
- Ministry/ Department/ CPSUs shall prepare their annual procurement plan to be uploaded on their official website.
- For enhancing participation of SMEs in government procurement. Ministry/ Department/ CPSUs shall conduct Vendor Development Programmes or Buyer Seller Meets for SMEs especially for SC/STentrepreneurs.
Universe of the Policy:
A) Buyers
- Central Departments (46)
- Central Ministries (54)
- CPSUs (308)
- No. of PSUs in TReds (176)
B) Suppliers:
All SMEs having registration as per provisions of the policy i.e. registration with District Industries Centre (DIC) or Khadi and Village Industries Commission (KVIC) or Khadi and Industries and Board (KVIB) or Coir Board or National Small Industries Commission (NSIC) or directorate of Handicrafts and Handlooms or Udyog Aadhaar Memorandum or any other body specified by Ministry of MSME. According to a Policy Circular, dated 1ST March, 2016 relating to Relaxation of Norms for Start-ups and Micro and Small Enterprises in Public procurement on Prior Experience- Prior Turnover criteria. The Start-ups are normally Micro and Small Enterprises which may not have a track record. These will have technical capability to deliver the goods and services as per prescribed technical and quality specifications, and may not be able to meet the qualification criterion relating to prior experience- prior turnover.
According to the Gas Authority of India Ltd. Report - 2021-22, the annuak procurement plan for FY 2020-2021 is:
- The total estimated annual procurement by GAIL Gas for year 2020-21 is Rs 1100 Cr. out of which total eligible procurement from SMEs is likely to be Rs 330 Cr.
- The above target of Rs 330 Cr. Includes procurement from SMEs owned by SC/ST Entrepreneur and also Women Entrepreneurs.
- To encourage more participation by SMEs including SMEs owned by SC/ST Entrepreneurs, GAIL Gas will conduct vendor development cum coaching programme.
- GAIL is already registered on the following TReDS platform; M/S Receivable Exchange of India (RXIL), Mumbai M/s Mynd Solutions Private limited (MYND, New delhi M/s A. TREDS (Invoice Mart), Mumbai, SME bidders are requested to register on the TReDS platform. The SME vendor can avail the TReDS facility, if they want to.