Innovation Title :
Government e-Marketplace (GeM)Innovation ID :
SAPI170018Relevant Focal Theme:
Market Interactions and Contributions leading to Innovative Procurement solutionsUse of ICT for Procurement Management and Useful Management InformationInnovative Procurement and Contract management solutions for Challenging and Fragile Environments
Proposer Details
Proposer Name:
Binoy KumarProposer Designation:
Director General, Supplies and DisposalProposer Official Address:
Challenge Addressed:
The traditional Government procurement process for commonly used goods and services presented a string of challenges for the modern Government buyer and vendor in an otherwise digitally empowered India fast adopting the tenets of knowledge societies. As part of the Good Governance initiative of the Government, with stated objective of Minimum Government and Maximum Governance, two Groups of Secretaries to the Government of India recommended that the current Government procurement system must be reviewed and redesigned preferably leading up to a market-based open and transparent framework in line with the Digital India Vision — Paperless, Cashless and Faceless. The aspiration clearly was to leverage technology available to re-imagine and transform the way Government procured its daily use goods and services and to address the traditional challenges, thereby leading to higher efficiency in cost, time and efforts, in procurement across the board. The key challenges addressed include, 1) The Government e-Marketplace (https://gem.gov.in/) has relieved Government officers and suppliers both from the tedium and inefficiency, and cut down significantly on administrative and transaction costs. Notably, transportation services (taxi) have been offered on a ‘productised’ easy to use mode, for the first time in Government. 2) The online transparent, unambiguous dashboard perspective now available to decision-makers facilitates greater application of financial prudence by Government, and effectively weaves in an automated but customized framing of ‘demand sheets’. By integrating with major databases (Aadhaar, PAN etc ) GeM has eliminated multiple levels of manual, sequential verification and decision-making, thus drastically bring down lead-time in procurement. Coupled with formal commitment from Government on payment service levels (ten days from date of delivery acceptance). It signals to the Governments will to transform itself. It amends the lack of visibility of processes and reasons/ grounds for particular financial/ procurement decisions, which were characteristics of the traditional procurement systems. 3) The way Government procurement was traditionally undertaken, it gave birth to certain apprehensions and perceptions (some of them negative) amongst stakeholders (including vendors). Traditional procurement did not lend itself to all-round inclusiveness of all competent vendors. GeM, by way of its transparent, online approach directly addresses such general apprehensions and perceptions and lays the foundation for mass adoption and on-boarding of greater number of suppliers and vendors through its confidence-inspiring portal 5) Through these measures and effects, GeM is steadily and surely ridding the Government of the ineffaceable tag of low-quality manufactured product issues and bringing in a positive outlook in the ecosystem towards Government as a large, transparent market, with equal opportunities for all. 6) Earlier, procurement was characterized by physical means of financial transactions. Now, through simplified monetary transactions and facility of electronic payment, GeM is addressing the challenge of cash-based transactions in a digitally empowered country which is fast moving towards a transparent ‘less cash’ economy characterized by digital-financial transactions and way of life. Not only is this enabling swift, hassle-free procurement through a pleasant automated experience, but also a push-start towards a cashless economy.
Impacts:
1) GeM has rationalized procurement processes, brought in complete transparency and traceability , reduced lead-time, enabled parallel auditing and increased the overall effectiveness of procedures. It has revitalized Government procurement by addressing the outmoded procedure that marred perspective of most Government suppliers. The online destination has enabled unimaginable transformation by moving the Government buyer and seller online. 2) GDP of India stands at around 2.3 trillion US dollars (USD) out of which nearly 15% i.e. 300 billion USD accounts for Government procurement, the ‘volume’ that GeM has started positively impacting. 3) GeM has generated that high a level of trust and belief in its efficiency and relevance, that the Department of Expenditure Procurement Policy Division issued an Office Memorandum defining a service level on itself for the very first time (w.r.t. ‘payment within 10 days of delivery and its acceptance’). Underscoring the confidence GeM inspired, Government of India carried out a major Government process transformation by including new Rule 141A into ‘General Financial Rules 2005’ enabling procurement through GeM. 4) GeM onboarding mechanism has created an expanding ecosystem based on trust and transparency, leading to a high number of vendor and product registrations in a short time. Directorate General of Supplies and Disposal (DGS&D http://dgsnd.gov.in/), in its 65 years, had 3000 sellers on rate contract and 20,000 products, whereas in just ~120 days, GeM has integrated 676 Government department-buyers, 1880 sellers, 67 service providers, 4848 products/ services; with 510 orders as of Dec-2016, an endorsement of GeM’s operational, functional, and spatial maturity, even in early days of temporal maturity. 5) Upward swings every month show acceptance of GeM as the transparent platform of choice for procurement, from issuing tenders, receiving bids, holding reverse auction which has brought in significant healthy competition, and has positioned Government as a large transparent market. Since the launch in August-2016, trends for Government-buyers already show December with 29.29% share of registrations, November (27.37%), October (18.49%), September (14.79%), August (10.06%). 6) GeM saves time for buyers and sellers, and conserves the costs. It has made procurement reliable and more accountable, and gives flexibility to sellers. Regular audit trails ensure accurate assessment. The total Government expenditure is INR 20 lakh crores out of which INR 4 lakh crores accounts for procurement. GeM platform will provide a saving of approximately 10%, i.e. a potential saving of around INR 40,000 crores. Since launch, 475 purchases have been made through Direct Purchase route and 40 purchases have been made under Reverse Auction and bidding. 7) There is rise in demand from national states to be onboarded on GeM. World Bank has permitted purchasing of upto INR 20 lakhs on GeM portal for funded projects. 8) Through an on-the-fly transformation in a relatively closed and sensitive sector of Government operations, GeM, has set the benchmark, changed mindsets, and leads the way for others to follow. 9) GeM is a proud addition to the national repository of effective, transparent, user-friendly IT-based platforms taking a Digital India all the way to a Digitally-empowered,
Lessons Learned:
Traditionally, Government procurement has been a conservative, rule-intensive, yet still ambiguous process. While solutions were devised and operated by various Government agencies, no major process transformation had yet been identified, and whereby such ‘solutions’ were also getting weighed down by legacy baggage. 1) One key lesson was that Government process re-engineering (GPR) may not necessarily be a pre-planned, inorganic experience, but alternatively, can be an organic evolution of the process design, with emphasis on functionality development through working backwards and incorporating parallel processing throughout. 2) To underpin the marketplace model, its four attributes – open, dynamic, competitive and responsive – were embedded, which led to a modified, efficient process and framework. Given its nature, it was imperative to create a constantly evolving solution which absorbs and addresses market-driven demands. 3) The architecture and technology stack needs to be agile to dynamically keep up with demands of both vendors and buyers. On average, the team addresses ~250 queries per week. To build confidence in a buyer, concurrent oversight and auditing by competent agencies was enabled. 4) Confidence-building in both vendor and buyer communities to shift to a new open and a transparent system was of utmost importance. To keep up with the pace of such e-solutions, there needs to be constant feedback, repetitive training sessions of levels that operate the system and ensure corrective measures of any unintended, mistaken decision-making. As part of this outreach, one repeated concern was w.r.t. unintentional, irreversible ‘clicking’ of decisions due to not being in the habit of operating such a system. Thus, extensive training and hands-on sessions were and are being carried out. 5) Change Management and Capacity Building (with emphasis on technology capacity), especially for general administrators (non-technical dealing hands): This initiative needs more than the usual hand holding during the first few transactions. Massive training sessions including addresses by Finance and Commerce Secretaries (Government of India) were conducted. Concerns of stakeholders were addressed by way of hand holding as also dynamic changes to the GeM operations. Vendors and providers were also trained on registering and on boarding products. 6) National Institute of Financial Management (NIFM) has adopted GeM as a standard module for financial management training; and has been nominated as the nodal institution for conducting training. Till date nearly 3229 Government officers have been trained from nearly 250 Central/State Government/Public Sector Undertakings and autonomous bodies till 30th December 2016. 7) 71 training have been conducted and the training calendar is available online (https://gem.gov.in/training_calender). National e-Governance Division (NeGD), as the capacity-building arm of the Government has made online modules available (https://gem.gov.in/trainingMaterial). 8) Any process-oriented application which generates documents should have fool-proof audit trail and efficient document management system, aspects which are integral to the GeM platform. The online portal www.gem.gov.in can be accessed anytime anywhere and fully equips all buyers, sellers, interested parties, with all pertinent information and a rich repository of downloadable documents and media files. Please also refer the annexures.
Level of Innovation:
1) The ingenious idea of a Government procurement marketplace, itself, is an out-of-the-box approach, an innovative shift that was designed and orchestrated from a manual and closed system to an Open State of Art marketplace. Innovation is underscored in terms of the Government-buyer now interfacing and transacting directly, dynamically, without manual intermediation; in alignment with the Digital India vision i.e. faceless, paperless and cashless governance system. 2) An unprecedented exercise (certainly in the procurement sector) saw the Government synchronistically forge and develop an idea, bring in the needed rules reengineering, and wholeheartedly onboard the market ecosystem. To envision a national procurement portal, built on an ‘e-commerce’ mode, while simultaneously addressing turbulent market-driven factors, and in the backdrop of Government regulatory framework, was an innovation challenge, and it was met with innovative thinking and implementation-approach. An end to end platform that is totally paperless, contactless and cashless necessitated a strong belief and buy in from multiple stakeholders- Finance, Audit, Accounts, Vigilance etc within Government to market providers including Industry, OEMs, retailers, ,Banks, etc. Each one had to be brought on board the idea, enlist their support while addressing each of their concerns. To this extent innovative collaboration with key Organisations were established and they were assiduously encouraged to adapt to the shift. 3) GeM was launched in August 2016 using cutting-edge and reliable technology, which befits and fulfils the demands and supply chain of the competitive market. The timeline for rolling out the proof-of-concept was aggressive innovation. What was rolled out as a PoC has grown into an almost full-fledged version that currently has 4848 products and taxi services and has done till date a business worth approximately INR 72 Crores. Another INR 50 Crores business is in the pipeline. 4) A pathbreaking innovation is the provisioning of transport services with spot-hiring, leasing, renting, etc., in collaboration with global leaders Uber (https://www.uber.com/en-IN/) and Ola (https://www.olacabs.com/), which stands unique in its seamless offering of spot-hiring with monthly payment facility. These collaborations will bring in huge savings for the Government wrt the thousands spent monthly on a single taxi. 5) GeM is the first mover for the Government of India stack (eSign, DigiLocker and Aadhaar). Various entry barriers for vendors were removed by simplifying the onboarding process. Traditionally, the vendor rate contract cycle lasted around 6 to 8 months and often involved several iterations with DGS&D officials. With GeM, vendor registration is now a matter of ~20 minutes, immediately after which the vendor can start offering products/services on the portal, and the offers are secured through eSign (http://cca.gov.in/cca/?q=eSign.html), which establishes an audit trail. GeM leverages cross-platform authentication of seller credentials, with individual identities verified through Aadhaar (https://uidai.gov.in/beta/your-aadhaar/help/faqs.html), financial standings of individuals, organizations through the Permanent Account Number (PAN) (https://www.tin-nsdl.com/pan/faq-pan-home.php), address verification through Udyog Aadhaar/ UAM http://udyogaadhaar.gov.in/ua/FAQ.aspx), registration credentials through MCA21 (http://www.mca.gov.in/MinistryV2/efiling.html). These multiple distributed databases reduce the probability of malpractices/ forgery and ferret out false/inconsistent information. 6. Key features include, -Easy search, price comparison, selection, order placement; -e-Bidding, Reverse-Auction, Demand-aggregation; -Dynamic pricing by sellers/service providers; -Transaction log-sheet and invoice generation; -e-Sign for authentication; -Email, SMS notifications; -Swift e-payment through Public Financial Management System (PFMS) and other online systems; Please also refer the annexures.
Replicability:
1) GeM is conceptualised around generally acceptable/ prudent financial rules in Government departments, making it amenable to replication, adoption or adaptation by any Government entity viz. in the centre or states, PSUs, autonomous-bodies, etc., easily without reinventing the wheel. Replicability of GeM is in its scalability, where, without creating another such platform, any Government agency can operate on and through it. 2) GeM’s architecture provides efficient code-reusability, making it easy to scale-up and up-scope. The application is modular, scalable and replicable easily. Functionalities of the portal have been so formatted to allow modification for use of other institutions or national states with minimal efforts. In this way, the radical engine has reversed the need of replicability; and GeM curbs Government buyers from starting individual e-solutions and seeks to bring them all under one roof of a universal procurement solution. The portal is emerging as a master application that can feed any agency by catering to customized requirements. 3) GeM 2.0 shall be rolled out with even greater focus on easy adaptability/ adoption, even internationally, thereby bringing in the potential of international replicability for countries with similar general financial rules. The aim is to pioneer a set-up that inspires other economies (globally) to follow suit or learn from our evolved efforts or act as a catalyst to motivate stakeholders to germinate similar initiatives. 4) All radical technologies used to engineer this e-commerce portal make GeM a safe, secure medium for doing business and allow uncomplicated replication. After a cautious and focused research, GeM was developed as a full stack Open Source application platform. The technology stack used in the background to drill the processes includes: (i) HAProxy – To maintain/balance the load on various application servers, Haproxy is deployed for seamless flow and high availability. (ii) VARNISH CACHE – A critical software for web based businesses, Varnish Cache reduces backend server load by upto 89% while handling unlimited number of simultaneous visitors. It ensures fast-speed content delivery and lesser backend-server resource requirements. (iii) MariaDB - Database is the backbone of the application which ensures the platforms content and details. MariaDB being the latest of the MySql server editions is deployed and clustered for high availability. (iv) Apache - To host the application Apache Web Server is being used. (v) PHP & CodeIgnitor -A framework is always suggested for seamless work and to maintain the application’s security. CodeIgnitor is a light-weight and development friendly environment utilised. (vi) NIC MeghRaj - Servers are over the Government cloud maintained in an optimal secure environment. These applications empower the project to create an ecosystem which can manage and balance excessive load immediately caused by multiple user engagement, provides lightning-fast and smooth service or functioning, and ensures stringent data security, again tenets which inspire confidence in GeM’s replicability and/ or adoption, especially the use of open source, which is always cost-effective for entities wishing to replicate the solution.
Other Background:
Government e Marketplace (GeM) was developed under the guidance of Directorate of Supplies and Disposal, Department of Commerce, Government of India with technical collaboration of National e-Governance Division, Ministry of Electronics and Information Technology, Government of India. GeM development started as Proof of Concept and it scaled up really fast and is hosted as a full fledged portal catering to the quick and efficient procurement needs of frequently used goods and taxi services of Government. National e-Governance Division has been instrumental in the development and deployment of the solution under the able guidance of President and Chief Executive Officer, Ms. Radha S. Chauhan. Everyday, application maintenance and enhancement is being carried out by NeGD technical team which has been stationed at the DGS&D office premises itself.
Partners
