In a communication via an Office Memo No.F.6/1/2023-PPD dated 6th January, 2023 to the Chief Executive Officer of the Government e-Marketplace (GeM) the Finance Ministry conveyed that the proposal on minimum floor price for minimum wage based manpower outsourcing services has been approved.
It also said that the procuring entities can also fix the service charge above 3.85% with proper justification on file, wherever required. However, such charges should not exceed 7% (including transaction charges) in any case.
The minimum service charges in the procurement of Manpower Outsourcing Service can now be fixed as 3.85% (3% profit plus transaction charges, which are 0.85% at present) as proposed by GeM. However, Least Cost System (LCS) may be considered for procurement, wherever appropriate, especially in high value cases.
This amendment is certain to bring relief to qualitative manned guarding agencies who tender for government contracts by submitting their quotations via the GeM portal. Previously some security agencies had been quoting at 0% service charges (profit) over cost in a desperate attempt to bag security guarding contracts from the government establishments, making others wonder as to how that could run their operations at no profit.
GeM is a short form of one stop Government e-MarketPlace (GeM) hosted by DGS&D where common user goods and services can be procured. GeM is a dynamic, self-sustaining and user friendly portal for making procurement by government officers.
