Types of government tenders in India: open, limited, single and global, with value limits

The type of tender decides whether you can bid at all. An open tender is advertised to every eligible firm, a limited tender goes only to firms on the buyer's list, and a single tender goes to one firm the buyer has picked. Knowing the modes and their limits tells you where to register and which tenders to watch.

The types at a glance

Rule 158 of the General Financial Rules lists the tendering methods for goods, and Rules 149, 154 and 155 add GeM and small purchases.

These limits bind central ministries and departments, their offices, and autonomous bodies unless their approved bye-laws differ (Rule 1). CPSEs follow the Department of Expenditure's manuals except for deviations their boards approve. Scientific departments and research institutes have higher limits for research equipment and consumables.

GeM: direct purchase, L1 and bids

Central ministries and departments must buy goods and services on GeM when GeM has them (Rule 149):

• Up to ₹50,000: direct purchase from any seller that meets the quality, specification and delivery period.
• Above ₹50,000 up to ₹10 lakh: L1 purchase, from the lowest-priced seller among sellers of at least three different manufacturers.
• Above ₹10 lakh: bid or reverse auction, compulsory. Buyers may run bids for smaller values too, and GeM's terms call bidding the preferred mode above ₹50,000.

Splitting a requirement into smaller orders to stay under these limits is prohibited (Rule 149(viii)).

What it means for you: direct and L1 orders come straight from your catalogue, with no tender to watch and no performance security. By listing a product you agree to accept them without further confirmation, so keep stock and prices current. Bid invitations go to sellers who have listed products or services in that category, and GeM normally takes 48 hours to approve a listing, so list well before a bid closes. See GeM registration and GeM reverse auction.

Small purchases without a tender

When an item isn't on GeM, small purchases skip tendering:

• Purchase without quotation (Rule 154): up to ₹50,000 each time. The officer certifies the goods are of the right quality, from a reliable supplier, at a reasonable price.
• Purchase committee (Rule 155): above ₹50,000 up to ₹5 lakh. Three members survey the market, online shops included, and recommend a supplier.
• Works by quotation: minor works up to ₹5 lakh, with quotations from at least three contractors, in emergent cases only (Manual for Procurement of Works).

Purchases under Rules 154 and 155 don't have to be published on CPPP (Rule 159). You win them by being a known, reliable supplier with fair prices.

Limited tender enquiry

A limited tender goes directly to firms on the buyer's list of registered suppliers (Rule 162):

• Goods and services up to ₹50 lakh (Rules 162 and 201) and works below ₹10 lakh (Rule 139). For works, the list is contractors enlisted with the department or other public works organisations.
• More than three firms are invited. Long lists can be rotated, inviting around 8 to 12 at a time.
• The notice also goes on GeM and CPPP, for information. Unsolicited bids are not accepted.
• EMD and performance security are normally not taken, since the invitees are already registered.

Above these limits, a special limited tender is allowed only for certified urgency, when an open tender isn't in the public interest, or when the sources of supply are definitely known (Rule 162(iii)). EMD and performance security are taken then.

Open and global tenders

Open tender enquiry

The open (advertised) tender is the default above the limited tender limits: goods of ₹50 lakh and above (Rule 161), services above ₹50 lakh (Rule 201) and works of ₹10 lakh and above (Rule 139).

• It's advertised on CPPP, and on GeM for goods and services, with the full tender document to download, normally free.
• Bidders ordinarily get at least three weeks from publication (Rule 161(vi)).
• Prior registration with the buyer isn't required. A works contractor who wins may have to get enlisted before the contract is placed.

This is where a new firm competes on equal terms. The portals guide shows where each kind of buyer publishes.

Global tender enquiry

A global tender invites foreign firms as well, where goods of the required quality may not be available in India (Rule 161(iv)). Since May 2020, no global tender may be invited up to ₹200 crore unless the ministry records special reasons and gets prior approval from the authority the Department of Expenditure names. Global tenders allow at least four weeks to bid.

Under the Make in India order, non-local suppliers can bid only in global tenders; other tenders are open only to Class-I and Class-II local suppliers. In a global tender, Indian bidders quote in rupees and local-supplier preference still applies. See the Make in India guide.

Single tender enquiry

A single tender goes to one firm without competition (Rule 166), only when:

1. Only one firm makes the goods.
2. An emergency requires a particular source, with reasons recorded and approval obtained.
3. Standardisation: machinery or spares must match existing equipment, on a technical expert's advice.

Cases 1 and 3 need a Proprietary Article Certificate (PAC), and the goods manual says no item should be bought on PAC for more than three years before an open tender tests the market. Works can be single-tendered for urgency, proprietary techniques, national security, or a natural continuation of earlier work worth up to 25% of the original contract.

What it means for you: you can't apply for a single tender. The ways in are to be the manufacturer, or its authorised dealer where the PAC allows. On GeM, PAC purchases above ₹50,000 still go to a bid, so the OEM's authorised sellers can compete with each other.

Two-bid system, two-stage bidding and EOI

Two-bid system (Rule 163): you submit a technical bid (eligibility, technical details and commercial terms, no price) and a financial bid together, in separate covers. Technical bids are opened first; only technically acceptable bidders' price bids are opened, and on e-procurement portals the rest stay encrypted. Simple purchases may use a single cover. The L1 guide explains how prices are then ranked.

Two-stage bidding (Rule 164) is for cases such as purchases the buyer can't specify without bidders' input, fast-changing technology, or research contracts. In stage one, bidders send technical proposals without prices, and the buyer may hold discussions with all of them and revise the specification. In stage two, those not rejected submit priced bids. A bidder that can't meet the revised terms may withdraw without losing its bid security.

EOI (expression of interest) asks firms to show their experience and capability, without prices, so the buyer can shortlist them. For consultancy above ₹50 lakh the EOI is advertised on GeM and CPPP (Rule 183), at least three consultants are shortlisted (Rule 184), and only they get the RFP (request for proposal) (Rule 186). Miss the EOI and you won't see the RFP.

Rate contracts and reverse auctions

A rate contract fixes price and terms for an item, typically for one year and not more than two. No quantity is guaranteed: each supply order a buyer places during the validity becomes a binding contract, but there may be few or none. Several firms can hold parallel rate contracts by matching the L1 price. A fall clause cuts your contract price if you sell or offer the same goods to anyone cheaper on similar terms during the contract.

An electronic reverse auction (Rule 167) is a live online auction in which bidders keep lowering their prices until time runs out. It suits standard items with plenty of competition, not complex items or QCBS tenders. After a tender, the goods manual's default lets in the lowest three bidders when there are four to six, and the lower-priced half above six, plus MSEs and Class-I local suppliers within their preference margins. Your last auction bid binds you, and there's no negotiation afterwards.

Common questions

What is the difference between an open tender and a limited tender?

An open tender is advertised and any eligible firm can bid. A limited tender goes only to firms on the buyer's registered list, more than three of them, and bids from anyone else aren't accepted.

What is a single tender?

A purchase from one firm without competition, allowed under Rule 166 only for a sole manufacturer, an emergency, or matching existing equipment.

What is a global tender?

A tender open to foreign firms, used when the goods may not be available in India. Central buyers can't invite one up to ₹200 crore without special approval.

What does EOI mean in a tender?

Expression of interest: firms show their capability without quoting prices, and only those shortlisted are invited to bid or send proposals.