The Ministry of Finance has issued an advisory to all central government entities against setting disproportionately high financial turnover, payroll, and staffing requirements in procurement tenders floated on the Government e-Marketplace (GeM) portal.
Issued by the Procurement Policy Division under the Department of Expenditure, the directive warns that overly stringent eligibility norms unduly restrict market competition in consultancy procurement.
Key Findings from FinMin’s Sample Study
A review of consultancy procurement tenders on the GeM portal over the past three financial years revealed several restrictive qualification practices:
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Inflated Payroll Requirements: Tenders frequently mandated a minimum staff strength far exceeding the actual manpower required to execute the specific consultancy project.
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Overly High Turnover Caps: Unjustified minimum turnover thresholds disqualified capable small and mid-sized firms.
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Imbalanced Evaluation Criteria: Bids gave disproportionate weightage to a firm’s historical corporate experience rather than evaluating the specific qualifications and experience of the key personnel assigned to the project.
Guidelines Issued to Central Ministries
“Procurement agencies should ensure that the prescribed minimum staff strength in a tender is commensurate with the manpower required for the satisfactory execution of the consultancy assignment… Disproportionately high staff strength requirements, without adequate justification, may unnecessarily restrict competition.” — Department of Expenditure, Ministry of Finance
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Adherence to Updated Manual: All Central Government Ministries and Departments have been directed to strictly adhere to the Manual for Procurement of Consultancy Services (2nd Edition, 2025) when formulating future tender eligibility criteria.
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Proportionality Principle: Minimum staff strength and financial turnover conditions must be directly aligned with the actual scale and technical needs of the project.
