PM’s pet GeM portal contract goes to loss making firm

PM’s pet GeM portal contract goes to loss making firm
PM’s pet GeM portal contract goes to loss making firm

The awarding of a Rs 1,000 crore contract for one of prime minister’s pet projects, GeM portal, to a small and a loss making company has raised eyebrows in the country’s IT circles. The Government e-Marketplace (GeM), under the Union commerce and industry ministry, has awarded this ambitious and innovative online e-commerce portal to a consortium led by Chennai-based Intellect Design Arena. The consortium also includes e-commerce company Infibeam.

This development comes despite the commerce ministry’s repeated assertion that the new and dynamic version of the much-hyped GeM portal for public procurement would be rolled out from January.

Officials in IT circles have serious doubts whether the scaled up version of GeM can be delivered on time with all its promised functionalities, given the complexities and challenges.
This fear has been accentuated, given the government’s and other stakeholders’ experience with the roll out of the goods and services tax network (GSTN). 

PricewaterhouseCoopers (PwC) was consultant to GeM with the mandate of selecting the managed service provider (MSP), among others.

Detailed questionnaires from Financial Chronicle sent to Union commerce and industry minister Suresh Prabhu, GeM CEO and Intellect Design Arena did not elicit a response.

In its new avatar, GeM portal, which is now available in pilot format, is expected to include globally benchmarked features like catalogue management, product categorisation, contract management, data analytics, refund and rejection policy, offering wider choices to buyers and sellers.

As per the tender document, the estimated value of orders under the GeM is expected to be Rs 2,500 crore in the first year, Rs 7,500 crore in the second year, Rs 20,000 crore in the third year, Rs 50,000 crore in the fourth year and Rs 1 lakh crore in the fifth and final year.

Key questions raised against the awarding of the contract pertain to the technological and financial bandwidth of the company, its domain knowledge, promoters’ background and veracity of the CVs of the project team submitted with the tender document, said an official working with a leading IT company, requesting anonymity.

The Centre had decided that GeM SPV will create a one-stop government e-marketplace to facilitate online procurement of common use goods and services  required by various government departments, organisations and PSUs.

GeM provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users achieve the best value for their money. The purchases through GeM by government users have been made mandatory by the finance ministry.