How GeM tenders work: direct purchase, L1, bids, RA and custom bids

What is a GeM tender?

People say "GeM tender" for any purchase a government buyer makes on the Government e Marketplace. Strictly, GeM is a marketplace first. Its own general terms put it plainly: GeM "is an end to end on-line procurement portal and not a tender publishing portal". Sellers list products and services with prices, and buyers either order from those listings or run a bid among sellers.

The same terms describe GeM as the National Public Procurement Portal for central and state ministries, departments, public sector undertakings, autonomous bodies and local bodies buying common use goods and services. So "GeM portal tenders" covers several buying modes, and only some of them ask you to quote.

Every GeM purchase runs on three layers of terms: GeM's General Terms and Conditions (GTC), the Special Terms and Conditions (STC) for the product or service category, and the buyer's Additional Terms and Conditions (ATC) for one bid. The GTC apply unless an STC or ATC overrides them, which is why the ATC deserves a slow read. See ATC in GeM.

GeM buying modes: which ones need you to bid?

Rule 149 of the General Financial Rules (GFR) 2017, as reproduced in GeM's terms of March 2026, sets the value bands for central government buyers. The table puts each buying mode next to the question a seller cares about: do I have to quote?

One more rule shapes the marketplace. Buyers may not split a requirement into several smaller bids or repeated L1 orders to stay inside a lower band, and GeM can block such bids. For a seller, that means a large requirement should reach you as a bid, not as a string of small orders.

Direct purchase and L1 purchase on GeM: orders without a bid

Below ₹10 lakh, many GeM orders never become a bid. The buyer filters the marketplace, compares listings and places the order. There is nothing for you to submit: your catalogue is your offer.

• Direct purchase, up to ₹50,000: the buyer can pick any listing that meets its quality, specification and delivery needs, and must record reasons if it skips the lowest priced one. While an item sits in the buyer's cart, the price is frozen against any increase, but a price cut passes to the buyer automatically.
• L1 purchase, above ₹50,000 and up to ₹10 lakh: the buyer compares products of at least three different manufacturers and orders from the lowest price. If your product does not show up in that comparison, you are not in the running.
• Single offer: where filters leave only one seller, GeM's terms tell buyers not to order from it and to bring more sellers onto GeM instead.

GeM's terms also ask for a minimum 10% discount on MRP in marketplace offers, and an undertaking not to sell the same product more cheaply outside GeM on similar terms. Price each listing as if it were a quote, because in L1 buying it is one.

GeM bid types: product, service, BOQ and custom bids

When a buyer runs a bid, the GeM bid listing files it under a type. These are the ones most suppliers meet:

• Product bid: goods from a GeM category. The buyer picks a catalogue item and the bid carries its technical parameters. You offer one of your listed products, which may match, be equivalent or be of higher specification, and the buyer judges it against its end use.
• Service bid: a service from a GeM service category, such as manpower, security or vehicle hire, under that category's service level terms. If several bidders quote the lowest allowed price for a service, GeM chooses among them by a random algorithm.
• BOQ bid: several items, each with its own quantity and specification, priced through a bill of quantities in one bid. It suits requirements that do not fit one category. Our guide to BOQ in tenders shows how to read one.
• Custom bid: the buyer writes its own specification for an item that the standard category specifications do not cover well. It reads more like a conventional tender, so expect a longer document.
• Other types: the listing also shows rate contract bids, global tenders, limited tenders and single tenders, used when the buyer has approval for those methods.

A GeM bid must stay open for at least ten clear days after publication. An e-bid offer is valid for 15 days from bid opening unless the buyer asks for longer, and an offer taken into a reverse auction stays valid for 30 days from the start of the RA. If you need help with packets and envelopes, see technical bid vs financial bid.

How reverse auction works on GeM

A reverse auction (RA) is a timed online round in which qualified sellers lower their prices against each other. GeM sets the start price and the fixed step by which each new price must fall. The usual route is "bid to RA": you submit technical and financial bids first, the buyer evaluates the technical side, and the RA then runs among those who qualified.

The buyer chooses one of two qualification rules when it creates the bid:

• 50% elimination: the lowest priced half of the technically qualified bidders go to the RA, rounded up. With seven qualified bids, L1 to L4 go through; with only two or three, everyone does.
• H1 elimination: everyone qualified goes through except the highest quoting bidder, unless only two or three qualified.

Some sellers get pulled back in under either rule. An eligible MSE quoting within 15% of a non-MSE L1, or a Make in India seller within 20% of a non-Make in India L1, may also join the RA. If only one OEM's products remain in contention, more sellers are added so that at least one other OEM competes, where one is available.

For goods, if two or more acceptable bidders quote the same lowest price in a plain bid, GeM runs a forced RA among all technically qualified bidders using the 50% rule. If GeM's systems fail mid-auction, the RA restarts from the last recorded lowest price, and prices already quoted stay binding.

Push button procurement: the small-value GeM bid

Push button procurement (PBP) came in under a Department of Expenditure office memorandum of 6 September 2022. It is a fast bid for small purchases, published on a separate PBP Notices tab that anyone can open.

• The total value may not exceed ₹5 lakh, and items cannot be bunched together.
• The category must have at least ten sources listed.
• The buyer starts from an item eligible for L1 purchase, and that L1 price becomes the ceiling. Your price must come in below it.
• Sellers get 3 days to respond, and offers stay valid for 10 days.
• The order is placed automatically only if at least five sellers respond with products of at least two OEMs; otherwise the notice is cancelled.
• Where several sellers tie at L1, the order goes to the one with the highest GeM seller rating.

A PBP notice carries only GeM's GTC, the category STC and standard declarations. Buyers cannot add their own parameters or ATC, which makes these about the simplest GeM bids to answer.

Who can participate in GeM tenders?

Any legal entity registered on GeM as a seller can take part: proprietorships, partnerships, LLPs, private and public companies, registered societies and statutory bodies. For goods, the seller is either the OEM or a reseller of that OEM's products under GeM's quadrant policy (opens in a new tab). A manufacturer needs a vendor assessment to be recognized as an OEM unless it is exempt; see GeM vendor assessment.

Beyond registration, three things decide whether you can quote on a particular bid:

• A live offer in the bid's category. Bid invitations go to sellers with listed goods or services in that category, and GeM normally needs about 48 hours to approve a new listing.
• The bid's eligibility criteria. Turnover, past performance, experience and certificates such as a BIS license are set bid by bid. GeM judges turnover and similar data from validating databases such as income tax, MCA21, Udyam and GSTN, so the figures held there are the ones that count.
• Bid security. Bids under ₹5 lakh carry no EMD. Above that the buyer sets it between 0.5% and 5% of the estimated value, with exemptions for groups such as eligible MSEs, DPIIT-recognized startups and sellers holding a valid vendor assessment.

If you are not registered yet, start with GeM seller registration. For the detail of exemptions, see EMD exemption for MSEs and our guide to EMD in tenders.

Illustrative example: one office chair requirement at three order values

This example is invented. A central government training institute in Bhopal needs ergonomic office chairs. Watch how the order value changes what a chair maker in Indore has to do.

Same product, same buyer, three different jobs. The small orders reward a well kept catalogue; the large one rewards careful reading and pricing discipline.

How AI helps with GeM bids, and what your team decides

Marketplace orders need catalogue upkeep more than analysis. Bids are another matter: a GeM bid document with its ATC and attachments can run long, and the clause that disqualifies you is rarely on page one.

TenderGenie reads the bid pack and brings out eligibility criteria, documents to upload, EMD and performance security terms and buyer-specific clauses, each linked to the page it came from so a reviewer can check the wording. Risk and compliance supports the go/no-go review, and Response Builder helps put together forms and annexures from the tender context. TenderGenie does not place orders or submit bids on GeM; your registered users do that.

Your team still decides whether a clause is met, whether to claim an exemption, how low to go in a reverse auction and whether the bid is worth it at all. See how to evaluate tender eligibility.

Questions and answers