Healthcare & Pharma

Who buys in this sector

Health buying is split between agencies that purchase for a whole programme and institutions that purchase for themselves. The two publish differently, and a supplier watching one of them misses the other.

A central procurement agency. The Central Medical Services Society is the health ministry's own buying body, “established with the approval of Cabinet on 24.08.2011 as a Central Procurement Agency (CPA) to streamline drug procurement and distribution system”. Its tenders page carries dated notices for programme drugs and vaccines, at least one of them run as a bid on the Government e Marketplace.

State medical services corporations. The Tamil Nadu Medical Services Corporation buys for the state's government medical institutions, towards the “ready availability of all essential drugs and medicines in the Govt Medical Institutions throughout the State”, and keeps a tenders page under its own name. The Kerala Medical Services Corporation does the same for Kerala and divides its tender pages by division: essential drugs on one, equipment on another. Where a state runs one, it is usually the buyer a supplier deals with.

Institutions buying for themselves. AIIMS New Delhi publishes tenders under its own name and runs an e-tendering platform beside them. Medical colleges, district hospital societies and health missions do the same on a smaller scale, which is why one item can appear as several unrelated notices in a month.

Ministries and their attached offices. Anything listed on GeM must be bought there under Rule 149 of GFR 2017. Purchases by government users “have been authorised and made mandatory by Ministry of Finance by adding a new Rule No. 149 in the General Financial Rules, 2017.”

What they tender for

A central buyer applies the Manual for Procurement of Goods to these. It is guidance under GFR rather than a law in itself, and says so: “In the Central Government, there is no law exclusively governing public procurement.” State corporations follow their own state's rules and stores manuals instead, which is the first reason two tenders for the same medicine read differently. The manuals are set out on The rules.

The instrument that shapes this sector more than any clause is the rate contract: “an agreement between the purchaser and the Supplier for the supply of specified goods (and allied services, if any) at a set price and terms & conditions … during the period covered by the Rate Contract. … No quantity is mentioned, nor is any minimum drawable quantity guaranteed in the Rate Contract. The Rate Contract is a standing offer from the supplier firm.”Department of Expenditure, Ministry of FinanceWinning one is winning the right to be ordered from, not an order.

Where the tenders are published

For a central buyer the rule fixes both halves. Under Rule 159 of GFR 2017 tender enquiries, corrigenda and awards are published on the Central Public Procurement Portal, and under Rule 160 bids are received electronically. That portal is where the tender schedule is downloaded free of cost and the bid submitted. Items on GeM are bought on GeM, in its medical and laboratory categories.

State health tenders sit on the state's own instance: Odisha's carries the tenders of state departments, boards and municipal bodies, and Tamil Nadu's carries the medical services corporation's under an organisation filter, while the corporation lists them on its own site too. Kerala's corporation publishes drugs and equipment separately again, and the Central Medical Services Society and AIIMS publish under their own names.

So a notice and the bid it leads to often live in different places: the buyer's page carries the notice, the named portal takes the submission. Which portal belongs to which government is on The portals.

The clauses that decide eligibility here

A health tender tests three things: whether the item may lawfully be supplied by the bidder, whether it has been supplied before, and whether the bidder is the maker or the seller.

• The licences, approvals and markings the tender names. A tender lists the documents it wants uploaded (a manufacturing or sale licence, a registration certificate, a test or quality certificate, a standard mark) and evaluates the bid against that list. What a regulator requires is its own law and its own department; what decides the bid is the list in the document.
• Past supply of a similar item, by value, by quantity or by order, with performance certificates from the buyers named. What “similar” means and how turnover is counted are on similar work and turnover.
• Manufacturer, authorised distributor or agent, with an authorisation letter where the tender asks for one. The distinction is not cosmetic: “traders/ distributors/ sole agent/ Works Contract are excluded from the purview of Public Procurement Policy for MSEs Order,2012.” What that policy gives is on what the MSE policy gives and does not.
• Shelf life, batch and packing conditions for medicines, and calibration, warranty and spares undertakings for equipment: eligibility conditions in the technical cover, not commercial terms.

Complex equipment is commonly bought under the two-envelope system, which Rule 163 of GFR 2017 provides for “purchasing high value plant, machinery etc. of a complex and technical nature”. The price of a bid that fails the technical cover is never opened. See why bids are rejected at technical evaluation.

Money in these bids

This is general information; confirm with the tender document and your adviser.

With the bid. Bid security, or a bid securing declaration in its place. A micro or small enterprise with Udyam registration is facilitated “by providing them tender sets free of cost, exempting MSEs from payment of earnest money deposit”, an exemption read strictly, and one that does not travel to a trader or sole agent. The band and the declaration are on EMD exemptions and the bid-securing declaration.

On award. Performance security under Rule 171 of GFR 2017, as amended by the Department of Expenditure's office memorandum of 1 January 2024. The MSE policy does not reach it: “there is no exemption on Security Deposit/ Performance Bank Guarantee under the Policy.” On a rate contract the security travels with each supply order rather than with the contract, and an order placed on GeM carries the marketplace's own terms instead, on the scale those terms state. The instruments a buyer accepts are on what is held back after you win; when each sum comes back is on Money in a bid.

One deduction is neither security nor penalty: a government buyer deducts tax at source before a bill is paid, under two separate Acts, and the rates, thresholds and returns belong with an accountant rather than on a tender page.