Govt e-market seeks Nasscom help

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The central government is taking help from Nasscom, the apex business association for the information technology (IT) sector, on the problems of software providers enlisted on the Government e-Marketplace (GeM) platform.

The vendors have complained of several difficulties in listing their products on the portal, primarily in price discovery. Nasscom has been asked to look into the issue, said GeM’s chief executive, Radha S Chauhan. The time is short — an updated version of the portal was scheduled for January.

Prasanta Roy, vice-president of Nasscom, told Business Standard: “Often, there is no standard or verifiable pricing, unlike with a consumer product, where you can go to Flipkart or Amazon and look it up or consult a vendor’s price list. Unlike consumer goods, like a word processor or a mobile phone, easy to categorise, enterprise software products are unique, often solve specific needs, and are often difficult to categorise.”

The platform allows public sector bodies to directly purchase common-use goods and services. Sellers have to register on the platform and compete with others in an open-market model. Inaugurated in August 2016, the portal has repeatedly been pushed by Prime Minister Narendra Modi as a means to reduce large-scale corruption. This plague the estimated Rs 5 lakh crore worth of procurement the Centre does every year, from pens to vehicles. 

The portal now features at least 280,000 products, from office stationery to vehicles. And, 9,800 services — including those offering drivers, florists, sanitation and laundry. The order value stood at Rs 2,480 crore as of late November.

Companies in this space are mostly in the mid-segment, insiders say. Start-ups with smaller operations and selling a particular product have faced the brunt of these operational issues.

Among the larger entities, all domestic IT majors — Infosys, Tata Consultancy Services, Wipro, etc — are in the fray.  However, says Nasscom, the number of active software products continue to trail those of hardware products. There were 27,000 active hardware products among the 55,000-odd listed; only about 500 software products of the 6,000 listed were active.
A possible solution to this might be standardised formats, digitally signed, by senior management in the original equipment manufacturing space, the industry has told Nasscom.

In the updated version of the GeM portal which is planned, it is expected to have state-of-the-art features such as data analytics, product categorisation, catalogue management, contract management and a refund and rejection policy, among others.

The industry also notes that the current structure requires companies to rely on rate contracts that might be five to 10 years old. These products might no longer exist or might have changed or the prices might have, Nasscom’s Roy said. The contracts were aggressively negotiated for high volumes.

Now, to list at the stipulated range of prices for even a one-off purchase would be a major squeeze for companies, though some vendors have accepted that model, he added.

According to a senior commerce ministry official, the government is considering the opening of some services category such as travel, currently closed. On the goods side, only non-administrative purchases such as military hardware, railway equipment and rolling stock are not covered by the GeM.

Selling software short
  • GeM allows public sector entities to make direct purchases of common-use goods and services
  • Portal part of plan to plug large-scale corruption in Rs 5 lakh cr govt procurement
  • Software providers and small businesses find it tough to list their products due to lack of price discovery model
  • Current rate contract model difficult to operate
  • Updated version of portal due next month

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