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OEM public procurement policy – exempts the purchase of spare parts from the government through trade news

Two officials said the government’s public procurement policy announced in mid-May, which allowed a global tender for source goods and services of up to Rs 200 crore to boost domestic industries, it spare parts from original equipment manufacturers Not applicable for purchase of.

A clarification was issued on 29 October on a number of government concerns and public sector companies — particularly in the areas of energy, telecommunications, health and infrastructure — faced difficulties sourcing specific components domestically as they were only the core Also available with equipment manufacturers (OEMs). Officials working for foreign institutions, two economic ministries, requested anonymity.

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The Finance Ministry on 15 May barred global firms from participating in government tenders of up to Rs 200 crore, with a cost of Rs 20 lakh crore as a step AatmaNirbhar Bharat Abhiyan (Self-Reliable India) economic stimulus and relief package . The statement dated 15 May said, “Now, no Global Tender Inquiry (GTE) will be invited for up to Rs 200 crores, unless prior approval from the Cabinet Secretariat.” The move was aimed at benefiting domestic micro, small and medium enterprises (MSMEs).

Referring to the October 29 judgment, another officer stated, “The office memorandum on May 15, 2020 applied to procurement of spare parts of equipment, plant and machinery etc. on the basis of nomination from the original equipment manufacturer (OEM) or original equipment Will not done. No competitive tenders as parts manufacturer (OPM) are invited in such cases. “

Divakar Vijayasarathy, founder and managing partner of consulting firm DVS Advisors LLP, said the government’s decision is prudent as it allows the purchase of spare parts from foreign OEMs as there are no other sources of supply. “Since the equipment / machinery would have been purchased from foreign OEMs, long before the introduction of the ban of global tendering, identical parts would have to be purchased from the same supplier,” he said.

PHD Chamber of Commerce and Industry (PHDCCI) President Sanjay Aggarwal said that the Public Procurement Rule aimed to ban global tendering for source goods and services up to Rs 200 crore, to ensure that local Businesses, especially MSMEs, do not face unfair competition. Big foreign companies.

“This provision is to build trust and confidence among local enterprises to increase their production prospects with increasing participation in the economic activities of the country. At this point, exceptions made on the purchase of parts from original equipment manufacturers (OEMs) are justified as a minimum or there is no other source / supplier available in such cases in India, ”he said.

“I am quite sure that the government intends to give first preference to domestic MSMEs, and therefore, the exceptions made in the said order have no negative effect on the confidence level of MSMEs in the country,” added.

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