Eligibility
Eligibility criteria in government tenders: turnover, similar work, net worth and relaxations
Eligibility criteria in tender explained: turnover criteria, the 40-50-80 similar work rule, bid capacity, net worth, and MSE and startup relaxations.
By GovtTenderHub editorial teamUpdated 11 min read
On this page
- Eligibility, qualification and evaluation
- Turnover criteria: how much and for how many years
- Net worth, liquid assets and bid capacity
- Similar work experience: the 40-50-80 rule
- Past supply experience for goods and GeM bids
- MSE and startup relaxation in turnover and experience
- Other eligibility conditions
- Joint ventures and a parent company's experience
- How to check whether you qualify before bidding
- Common questions
In short
- Eligibility criteria decide who may bid (licences, not debarred, Make in India class). Qualification criteria test capability (turnover, experience, capacity). Both are pass or fail; evaluation then picks the winner.
- For works, the Department of Expenditure's manual suggests average annual turnover of at least 30% of the estimated cost over the last three years.
- Its similar work test: in the last seven years, three works of 40%, two of 50% or one of 80% of the estimated cost.
- Works tenders may also test bid capacity (A × M × N − B); goods tenders, net worth and past supply quantity.
- DPIIT-recognised startups must normally be relaxed from prior turnover and experience in central tenders; for MSEs it's optional. On GeM, a relaxation applies only if the bid says "Yes".
The eligibility criteria in a tender decide whether your bid is looked at: miss one and your price is never opened. This guide sets out what central government tenders ask for on turnover, similar work, net worth and bid capacity, and who is relaxed from them, citing the Department of Expenditure (DoE) manuals.
Eligibility, qualification and evaluation
Rule 173(i) of the General Financial Rules (GFR) requires every bidding document to state its eligibility and qualification criteria. The DoE's services manual (para 3.1-1) warns that the two "are entirely different criteria and should not be mixed up".
| Test | Question | Examples |
|---|---|---|
| Eligibility | May you take part? | GST, PAN, licences, not debarred, Make in India class |
| Qualification | Can you do this contract? | Turnover, similar work, net worth, bid capacity, staff, equipment |
| Evaluation | Who wins among those who pass? | Lowest price (L1), or quality and cost (QCBS) |
Qualification criteria are also called pre-qualification criteria (PQC); the works manual applies them whether bidders are shortlisted first or checked with their bids (para 4.2.6-2). In an L1 tender a wide margin earns nothing extra: GeM's services FAQ says bidders with ₹1 crore and ₹10 crore turnover against a ₹1 crore condition are "equally eligible". A criterion not written in the tender "cannot be used for evaluation or qualification" (Works Manual para 4.2.6-1). See L1 in tenders for ranking.
Turnover criteria: how much and for how many years
Turnover is usually an average over the last three financial years ending 31 March of the previous year. With ₹40 lakh, ₹55 lakh and ₹70 lakh, your average is ₹55 lakh, so you meet a ₹50 lakh condition although one year fell short.
| Contract | What the DoE manuals suggest | Where |
|---|---|---|
| Works | Average annual turnover, last 3 years, at least 30% of the estimated cost | Works Manual para 3.9.1-4-c |
| Goods | Average annual turnover, last 3 years, 40–80% of the estimated cost | Goods Manual Annexure 12 |
| Services | Average annual billing, last 3 years, 3 times (1–3 year contracts) to 7 times (longer) the estimated annual cost | Services Manual para 5.1.9-2 |
On GeM the line is Minimum Average Annual Turnover of the bidder (For 3 Years), proved by audited balance sheets or a CA or cost accountant's certificate. A firm under three years old is judged on its completed years, and GeM's seller FAQ says the figure is capped at half the bid's estimated value. On 2 October 2026, 45% of the live GeM bid documents we had read set a minimum turnover. The median asked was ₹7 lakh, and the middle half ranged from ₹2 lakh to ₹25 lakh.
Net worth, liquid assets and bid capacity
Net worth. The goods manual's sample criteria say it should not be negative or have eroded by more than 30% in three years (Annexure 12). For EPC works, the works manual suggests at least 15% of the estimated project cost (para 3.2.5-5).
Liquid assets. Works and services tenders can ask for liquid assets or credit of a stated amount (Works Manual para 3.9.1-4-c; Services Manual para 5.1.9-2). A bank solvency certificate, where asked, serves this test.
Bid capacity (works) checks you aren't over-committed. The works manual's formula (para 3.9.1-4-f) is A × M × N − B:
- A: your highest value of engineering works executed in any one of the last five years, at current prices
- M: a multiplier, usually 1.5
- N: years allowed to complete the new work
- B: your existing commitments due in those N years
With a best year of ₹8 crore, 2 years allowed and ₹10 crore of work in hand: 8 × 1.5 × 2 − 10 = ₹14 crore. To win several contracts in one tender, your capacity must exceed their total estimated cost. Departments may adapt the formula, so use the one in your tender.
Similar work experience: the 40-50-80 rule
The works manual (para 3.9.1-4-b) asks for similar works "successfully completed or substantially completed" in the last seven years, ending on the last day of the month before bids are invited:
| Option | Rule | For a ₹5 crore work |
|---|---|---|
| 1 | Three similar works, each at least 40% of the estimated cost | 3 works of ₹2 crore or more |
| 2 | Two similar works, each at least 50% | 2 works of ₹2.5 crore or more |
| 3 | One similar work of at least 80% | 1 work of ₹4 crore or more |
The Central Vigilance Commission's memorandum on pre-qualification criteria of 17 December 2002 sets the same rule. Under the manual:
- "Similar" is defined in the tender by "physical size, complexity, methods/ technology and/ or other characteristics described, and scope of works". If it isn't, ask in a pre-bid query before the deadline.
- Old work is updated at 7% a year, simple, to bid opening: a ₹2 crore job finished three years ago counts as ₹2.42 crore.
- Substantially completed work counts if at least 90% has been paid and the work is usable.
- JV or sub-contract work counts only for your share.
Services tenders apply 40-50-80 to the annualised cost (Services Manual para 5.1.9-2).
Past supply experience for goods and GeM bids
The goods manual's sample criteria (Annexure 12) ask that you have made and supplied the product for the last three years, and supplied a qualifying quantity (40–80% of the tendered quantity) in one of the last five. A dealer can qualify on its manufacturer's record if the manufacturer meets every criterion and gives a tender-specific authorisation, and the dealer has been an authorised representative for similar products for three years.
GeM bids use two lines, explained in how to read a GeM bid document:
- Years of Past Experience Required: you or the OEM supplied the same or similar products to a government body or PSU in each of that many financial years, shown by contracts and delivery proof. GeM's FAQ says active contracts count.
- Past Performance: you or the OEM supplied a stated percentage of the bid quantity in one of the last three financial years.
On 2 October 2026, 57% of the live GeM bid documents we had read asked for past experience: three years in 63% of those, one year in 17%, two years in 15% and five or more in 6%. The bid disclaimer makes a bid void if the buyer demands experience with one particular organisation, or foreign or export experience.
MSE and startup relaxation in turnover and experience
| DPIIT-recognised startups | Micro and small enterprises | |
|---|---|---|
| Basis | GFR Rule 173(i); DoE OMs of 25 July and 20 September 2016 | MSME Ministry circular of 10 March 2016 |
| Strength | "not optional but normally has to be ensured" (Goods Manual para 1.11.5-2) | Buyers "may relax" (MSME FAQ Q30) |
| Works | Covered | Works contracts and traders are outside the MSE policy |
| Exceptions | Public safety, health, critical security operations and equipment | The same |
A startup is relaxed only in the sector it is registered for with DPIIT. The relaxation covers only prior turnover and prior experience, can be partial, and leaves quality and technical specifications in place. It binds central buyers; states follow their own rules.
On GeM, check MSE Relaxation for Years Of Experience and Turnover and Startup Relaxation for Years Of Experience and Turnover. GeM's FAQs say the exemption applies only if the buyer selected "Yes", and you must upload proof such as your Udyam or DPIIT certificate. Of the live GeM bids that state it, about 35% relaxed MSEs and 32% relaxed startups on 2 October 2026. More in MSME benefits.
Other eligibility conditions
| Condition | What is asked | Source |
|---|---|---|
| Registrations | GSTIN, PAN, EPF, ESI, labour licence, PSARA licence for security work | Works Manual para 4.6.2-4 |
| Enlistment | Under the DoE Works Manual, open tenders can't be limited to enlisted contractors, but the winner may have to enlist. CPWD's own procedure invites its normal works up to its Class I limit from CPWD-enlisted contractors. States register contractors in their own classes | Works Manual paras 3.7.1, 8.6; CPWD SOP 4/8 |
| Not debarred | Corruption convictions mean debarment for up to 3 years. Disclose debarment by other buyers and integrity breaches in the last 3 years | GFR Rules 151, 175 |
| One bid each | A second bid in any capacity disqualifies you; on GeM, affiliates' bids count as yours | Works Manual para 4.6.2-9; GeM GTC clause 29 |
| Make in India | Only Class-I and Class-II local suppliers can bid, except in global tenders | Make in India |
| OEM authorisation | Dealers attach the maker's authorisation, except for off-the-shelf items; not needed on GeM for OEM-verified resellers | Goods Manual para 5.2.2-4; GTC clause 28 |
Land border. Under GFR Rule 144(xi), the DoE's Order (Public Procurement No. 1) of 23 July 2020 lets a bidder from a country sharing a land border with India bid only if registered with DPIIT's Registration Committee. The rules, now in Public Procurement Order No. 4 of 23 February 2023, also cover firms owned or controlled from there, their agents and JVs including them. Countries receiving Indian lines of credit or development projects are excluded, and every bidder certifies compliance (Works Manual para 1.11.3).
Joint ventures and a parent company's experience
By default you can't borrow credentials: evaluation ignores the qualifications of subsidiaries, parent entities, allied firms and subcontractors, other than specialised subcontractors the tender allows (Works Manual para 6.4.1-1, Goods Manual para 7.4.2-1, Services Manual para 7.3.4-2).
- Goods: JV partners' credentials can't be combined. A domestic holding company's financial standing can count for one fully owned subsidiary.
- Works: JVs may be allowed in larger packages (the manual's example is above ₹10 crore), with minimum shares for each partner (paras 4.6.2-3, 3.9.1-4-g).
- Demerged firms may use the parent's credentials, at least in their first five years, where the tender allows (DoE OM of 12 October 2023).
How to check whether you qualify before bidding
| Check | Have ready |
|---|---|
| Eligibility: licences, JV allowed, Make in India class, land border | GST, PAN, licences, signed declarations |
| Turnover: which years, average or each year, bidder or OEM | CA certificate or audited accounts |
| Experience: period, end date, what "similar" means | Work orders and completion certificates with dates and values |
| Bid capacity, net worth, liquid assets | CA-certified figures, bank letter |
| Relaxation says "Yes" for you | Udyam or DPIIT certificate |
The documents checklist lists the papers. GovtTenderHub's GeM bid pages show each bid's turnover, experience and relaxation lines; works tenders are under civil works tenders, since GeM doesn't allow works bids.
Common questions
What is eligibility criteria in a tender?
The conditions a bidder must meet to be considered, such as licences and not being debarred. Qualification criteria like turnover and experience then test capability, and only bids passing both have their prices compared.
How is average annual turnover calculated?
Add the turnover of the years the tender names, usually the last three financial years, and divide by the number of years. On GeM, a firm under three years old uses its completed years.
Can a new firm bid without turnover or experience?
Yes, where the tender asks for neither or relaxes them for you. Small works, such as repairs up to ₹60 lakh, may also drop the experience and bid capacity tests (Works Manual para 4.2.6-3).
Is MSE relaxation of turnover and experience mandatory?
No. The MSME Ministry says central buyers "may relax" it, and GeM's FAQ calls it the buyer's choice. For DPIIT startups, the DoE says it is normally to be ensured.
Can I use my parent company's experience?
Normally not. The exceptions are a demerged firm where the tender allows, a holding company's financial standing in goods tenders, and the OEM's record on GeM.
What does the 40-50-80 rule mean?
The similar work test for works and services: three completed similar works of at least 40% of the estimated cost each, two of 50%, or one of 80%. The works manual counts works completed in the last seven years.
Find tenders. Win them. Run the work.
- Alerts, ₹299 a month: New tenders for your work by email every morning, anywhere in India, and full details of every tender.
- Business, ₹599 a month: Alerts, plus GST bills, letters on your letterhead and workers' wages.
Searching tenders is free. Prices include GST; pay yearly and save 10%.