GeM Terms and Conditions Every Tender Participant Must Know Before Bidding

GeM (Government e-marketplace) has become the most trustworthy digital platform for government procurement. Lakhs of sellers and thousands of buyers use this portal every day. Is it enough to just register and upload products? No.

To win tenders on GeM, it is important to have a deep understanding of GeM terms and conditions. This is not just a legal document, but the backbone of the entire procurement process. In this article, we will explain in simple language what the GeM terms and conditions are, what sellers and buyers should keep in mind, and which critical elements are included in the GeM Government e-Marketplace regulations.

What are GeM Terms and Conditions?

GeM Terms and Conditions refer to the GeM rules and regulations that apply to every transaction and process on the portal. It includes:
  ● Rules for product listing
  ● Buyer eligibility criteria
  ● Payment and delivery policy
  ● Return and penalty clauses
  ● Provisions for arbitration and dispute settlement

These conditions must be followed by all buyers and sellers, regardless of the category.

GeM Glossary: Simple Explanations of Some Key Terms

Understanding the GeM Glossary is essential for every new vendor because the conditions hidden within the glossary often determine the direction of your bid.

7 Essential GeM Terms and Conditions to Know Before the Tender Bidding

1. Eligibility criteria: Every tender has different eligibility criteria, like MSME preference, turnover limit, brand approval, etc.

2. Delivery timelines & liquidated damages: The Delivery timeline is fixed on GeM. If you deliver, then according to GeM rules and regulations, a penalty could be levied on you, which is usually 0.5% per week of the tender value.

3. Warranty obligation: It is mandatory to give at least one year of warranty on the products sold on GeM. If a product fails in the warranty period, then the seller has to provide replacement or repair services.

4. Price validity: The price quoted by the seller is considered valid for at least 180 days, to ensure price stability within the GeM ecosystem.

5. GeM purchase preference: As per the government’s policies, SC/ST entrepreneurs, women led enterprises, and MSMEs are given preference.

6. E-payment Clause: As per GeM rules and regulations, all the payments are made through GeM in electronic mode after the buyer’s acceptance. Cash and cheque dealing are not allowed.

7. Termination clause: If a seller repeatedly fails to deliver on time or delivers faulty products, then they can be blacklisted from the GeM portal.

Why is it Important to Understand GTC?

GTC, which is the general terms and conditions, is the backbone of every tender. This sets clear responsibilities among buyers and sellers. Why is it important:

  ● Failure to comply with the GTC could lead to bid rejection.
  ● In case of buyer dispute, the decisions are made based on the GTC
  ● It is important to follow them for long term credibility

Document Compliance: What Should You Keep in Mind?

When you bid under any GeM Government e-Marketplace regulations, it is essential that your documents comply with these conditions.
    ● PAN, UDYAM, GST registration
    ● OEM Authorization (if applicable)
    ● Performance bank guarantee (PBG)
    ● Undertaking and declarations signed

The GeM government e-marketplace regulations may auto reject submissions if there is a format mismatch or if the document has expired.

Also Read: What is ATC in GEM? Practical Use of ATC GEM Documents

Penalty & Dispute Resolution Rules

GeM follows an automated penalty structure
  ● Delay in delivery: 0.5% LD/week
  ● Wrong product: Entire payment withheld
  ● Repeat violations: Black listing or suspension

In case of any dispute, there is a provision for conciliation and arbitration. Arbitration takes place in the buyer’s location.

What are Buyer’s Terms and Conditions?

Buyers can also impose some specific clauses like
    ●  Inspection prior to delivery
    ●  Partial delivery permitted/not permitted
    ●  Extended warranty
    ●  Penalties specific to the project

Sellers should also read the buyer’s added additional terms and conditions before bidding.

Also Read: GeM Buyer Registration Process Explained with Documentation List

Embedded Compliance Clauses in GeM Terms and Conditions

It would be a mistake to consider GeM terms and conditions just a formal document; they actually form a compliance mechanism. There are some specific clauses that determine the seller’s accountability.

• Force Majeure Clause: If due to unforeseen circumstances like flood, earthquake, or famine, you are unable to deliver on time, then the force majeure clause could give you protection from penalty to some extent. But proper documentation is required.
• Risk Purchase Clause: If the seller fails in delivery, then the buyer can purchase the same product from another seller at a higher price. The excess cost is covered from the defaulting seller.
• Exit Clause: Some long term contracts have an exit clause. It allows both parties to terminate the clause subject to pre-defined conditions before the specified time.

Business Advantages of Understanding GeM Terms and Conditions

Now let’s talk about the practical angle: what is the actual benefit for a seller in understanding the GeM Terms and Conditions?

1. It increases your chances of winning bids: A seller who bids with full preparation, keeping in mind the GTC and buyer-specific conditions, tends to score higher in the evaluation.

2. Protection from legal disputes: Understanding terms and conditions could prevent you from future legal disputes, penalties, and cancellations.

3. Cements buyer’s trust: Sellers who clearly accept and fulfill the terms are often given repeat orders or long term contracts by buyers.

Final Thoughts

Success on GeM not only depends on product quality or price, but it is also on compliance. Understanding the GeM terms and conditions is as important as your product. It makes your bid legally sound and also gives the buyer confidence that you are a responsible and reliable vendor. If you take terms and conditions lightly then you are at risk of getting rejected, penalized and even blacklisted. But if you read every term thoroughly, then GeM can become a source of long term revenue and trust.

Pro tip: If you want tender specific, buyer specific conditions or auto alerts then platforms like BidAssist can make your bidding journey effective.