MoD Hits Procurement Milestone on Government e-Marketplace

Government e Marketplace (GeM) is an online public procurement platform for government entities. Ministry of Defence (MoD) has achieved Rs 1 lakh crore of cumulative transaction value on GeM. Enabled by increased adoption of technology in defence procurement processes

Significance of Milestone

• Showcases MoD’s success in leveraging tech to drive transparency and efficiency in public buying
• GeM continuing to emerge as preferred marketplace for government procurement
• Defence Public Sector Undertakings (DPSUs) and Ordnance Factories actively using GeM
• Opens up government contracts for competitive bidding by MSME suppliers

Growth Trends in Defence Spending on GeM

• MoD has consistently been among top spenders on GeM since portal launch in 2016
• MoD’s spending has doubled year-on-year basis over last 3 years
• Share of MoD in government procurement has risen from 5% to over 12%
• Signifies increasing use by Armed Forces, security agencies to meet procurement needs

Profile of Defence Buyers on GeM

• Indian Army has done highest cumulative transactions worth over Rs 35,000 crore
• Followed by Indian Air Force at Rs 28,800 crore, Indian Navy at Rs 19,600 crore
• Ordnance Factories Board, DRDO, NPCIL, BRO also using GeM routinely
• Cantonment Boards, NCC, Defence Estates too switching procurement to portal

Categories of Defence Purchases

• Office computers and supplies worth Rs 18,400 crore bought on GeM
• Electrical items procurement aggregating Rs 14,200 crore
• Rs 9,800 crore purchase of IT networking products
• Rs 7,100 crore contracting of maintenance and support services
• High value orders also placed for machinery, medical supplies, furniture

Benefits of GeM for Defence Procurement

For Buyers

• Time savings through product catalogue, comparison, e-bidding
• Lower prices due to aggregated demand and competition transparency

For Suppliers

• Wider market reach, level playing field for all suppliers
• Simpler registration norms, pre-qualification requirements
• Faster payments, reduced working capital needs due to online processes
• Listing opportunities for niche defence items not part of regular procurement

GeM Features Driving Defence Adoption

• Intuitive dashboard showing procurement analysis, savings metrics
• Tools for demand aggregation, price discovery, order tracking
• Secure online payment gateway integration for paperless order fulfilment
• Robust seller verification mechanisms ensuring product quality

Expanded Functionalities

• GeM Start-up Runway: dedicated corner for start-ups to showcase innovations
• DEMATEL enablement: listing and procurement of patented products
• Integrated advance analytics:  dashboard for spend analysis
• Mobile app and outbound calling facility:  eases vendor onboarding

Top GeM Saving Areas for MoD

• Automation cuts manpower expense in manual tendering processes
• Competitive bidding ensures procurement at most optimum rates
• Discount on MRP through demand aggregation and bulk ordering
• Lower logistics expense using least cost-based automated routing

Emerging Use Cases

• Defence India Startup Challenge winners listing products on GeM
• DRDO transferring commercialised R&D products to industry via GeM
• Inventory management solutions for optimising stocking of spares
• GeM also assists in disposal, replacement planning of assets

Future Potential

• Integration with iDEX and Technology Development Fund for innovations
• Utilise for offset discharge placing export orders on GeM portal
• Linking procurement with IDDM (Indigenously Designed, Developed and Manufactured) tagged products

GeM is transforming public procurement in India by ushering unprecedented ease, agility and transparency. MoD crossing cumulative spend of Rs 1 lakh crore on GeM underscores its potential in helping defence, security agencies maximise value. Higher adoption driven by smart features and trust in portal can lead to win-win outcomes for buyers and sellers over the long run.