GeM reverse auction: how bid to RA works, who gets in and how L1 is decided

In more than a third of GeM bids, the price you submit is only an opening offer: after technical evaluation you may have to beat the lowest price live, against a clock. This guide covers when buyers use a reverse auction, who gets in, how the bidding works and what decides the order, from the General Financial Rules, GeM's General Terms and Conditions (GTC) and GeM's own FAQ.

What a reverse auction is

Rule 167 of the General Financial Rules defines an electronic reverse auction as "an online real-time purchasing technique" in which bidders present "successively more favourable bids during a scheduled period of time", with automatic evaluation. The government is buying, so prices go down and the lowest wins. See L1 and H1 in tenders for how ranking works in general.

On GeM an RA has its own number, such as GEM/2026/R/741225 (bids are GEM/2026/B/…), and a short RA document giving the "RA Start Date/Time", the "RA End Date/Time", the auto-extension rule and the parent bid whose terms apply. On 29 September 2026, GovtTenderHub listed 1,459 live GeM reverse auctions among 41,171 live GeM bids.

When buyers must use a bid or reverse auction

Rule 149 of the General Financial Rules, as amended on 10 July 2024, sets how central buyers purchase on GeM:

Scientific ministries and bodies such as DRDO, the Department of Atomic Energy, ICAR and ICMR use ₹1 lakh in place of ₹50,000. Buyers can also use bids and RAs below ₹10 lakh, and the GTC says bidding "should be considered as the preferred mode of procurement" above ₹50,000.

Bid to RA, step by step

1. The buyer chooses it when creating the bid. It can't be added after the bid is published, and it isn't available in single-packet bids (GeM FAQ). The bid document shows "Bid to RA enabled: Yes" and the "RA Qualification Rule".
2. You submit your technical and financial bid by the bid end date, with EMD if asked.
3. The buyer evaluates the technical bids, then opens the price bids of qualified sellers.
4. The buyer converts the bid to an RA and sets its end date. Sellers who qualify under the RA rule are invited; at least two are needed.
5. After the RA closes, the buyer opens it, sees the L1 and places the contract.

A tie can force an auction even without bid to RA. If two or more acceptable sellers quote the same lowest price in a goods bid, GeM runs a forced RA among the technically qualified bidders with the 50% rule. In a service bid where several sellers quote the lowest allowed price, GeM's system picks one at random instead.

Who gets into the reverse auction

Only sellers who passed the technical evaluation of that bid take part. The buyer's "RA Qualification Rule" decides how many:

These admissions apply only when L1 itself isn't an MSE (or Make in India seller). GeM's FAQ says that if L1 is an MSE, the 15% band isn't used under the 50% rule, and under H1 elimination the highest bidder is dropped whatever its MSE status. Make in India preference belongs to Class-I local suppliers, with at least 50% local content; see Make in India and local suppliers.

An example with seven qualified sellers, where E is the only MSE and nobody claims Make in India preference:

How bidding in the RA works

• Start price and step: GeM's system sets the start (reference) price and the step value of decrement, based on the product selection or the outcome of the bid, and shows both when the auction starts.
• Each bid must beat the current lowest by one or more steps.
• What you see: the start price, the decrement value, the prevailing lowest bid and your own last bid.
• What you enter is your total offer price, evaluated as the all-inclusive landed price at the consignee's location unless the ATC says otherwise. GST, freight, loading and any installation must be inside it.
• How long it runs: the buyer sets the end date; GeM's FAQ puts the minimum at 24 hours. RA GEM/2026/R/741225, for grommet bushes, opened at noon on 26 September 2026 and was set to close at noon on 1 October.
• Auto-extension: a lower bid in the last 15 minutes pushes the end out by 15 minutes, again and again. The RA documents we read say: "There is no limit on such RA extension cycle." A price sent after the end time is not recorded.
• Offer validity: taking part counts as consent to keep your offer valid for 30 days from the day the RA starts.
• If nobody bids, the buyer can extend the RA up to three times, go ahead with the bid result, or cancel.

What decides L1 after the RA

1. The lowest price at the close is L1.
2. Purchase preference comes next. The GTC says the award is made keeping in view the MSE and Make in India orders. An MSE within 15% of a non-MSE L1 can match L1's price and supply up to 25% of the order. A Class-I local supplier within 20% of an L1 that isn't Class-I can match it for half the quantity where the item can be divided, or the whole order where it can't. More in MSME benefits.
3. The buyer checks reasonableness and can reject any bid, including the lowest. In a split bid, the other sellers are asked to match L1's rate for their share.
4. L1 gives a full price break-up before the award, then performance security, where asked, within 15 days of it.

If sellers are still tied at L1 after the RA, the buyer runs another round, after which it can pick one of them.

Tips for sellers

• Fix your floor price before the auction: every cost to the consignee's door, performance security, warranty, and GeM's transaction charge if it applies to you (see GeM registration and charges).
• Make your bid price count. Under the 50% rule it decides whether you get into the RA, and if nobody bids in the RA, the bid result can stand. Claim MSE or Make in India status in the bid, with its documents: it can get you in too.
• Watch your GeM dashboard. The GTC makes sellers responsible for checking notifications, including RA participation; email and SMS alerts are only an extra.
• Don't wait for the last second. A lower bid in the last 15 minutes extends the auction anyway, and a bid after the end time is lost.
• Find RA bids before they close. Only sellers who qualified in the parent bid can join its RA. How to read a GeM bid document shows where the RA lines sit, and GovtTenderHub's GeM bid pages show whether reverse auction is on: start from live GeM bids.

Common questions

What does bid to RA mean in GeM?

The bid is followed by a reverse auction. You submit a technical and a price bid; after technical evaluation, the sellers selected by the bid's RA rule compete in a timed online auction, and the lowest price at the close is L1.

What is H1 elimination in a GeM reverse auction?

One of the two RA qualification rules: every technically qualified seller goes into the RA except the highest-priced one (H1). H1 stays in if only two or three sellers qualified, and in the other cases in the table above.

How long does a GeM reverse auction last?

At least 24 hours. The buyer sets the end time, shown in the RA document, and every lower bid in the last 15 minutes extends it by 15 minutes.

What happens if I don't bid in the RA?

Your bid price stands and stays valid for 30 days from the start of the RA, but other sellers can go below it. If no seller bids at all, the buyer can extend the RA, go ahead with the bid result or cancel.