The current service providers receive 0.215% on each transaction value with the maximum payout capped at Rs 1.5 crore on a single transaction.
NEW DELHI: Tata Group firm TCS will take the reins of the Government e-Marketplace (GeM) portal from existing management service provider Intellect Design Arena (IDA) and Infibeam with effect from October 3, 2023.
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The IT major will take full control of the portal only from December 14, till then it will run the portal with the help of the existing service provider, whose contract ends on that day. The move will save the government Rs 150 crore a year as the contract will be based on an entirely different payout model, PK Singh, CEO of GeM, told the media.
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The current service providers receive 0.215% on each transaction value with the maximum payout capped at Rs 1.5 crore on a single transaction. “We realised this is perhaps not the right way – if you give incentives based on a certain percentage of the transaction value, the focus will be more on bigger transactions. This goes against our philosophy of promoting smaller businesses,” says the GeM CEO.
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The new contract has linked the payouts to the number of transactions so that there is more incentive in having larger numbers of transactions rather than larger values of transactions. As per the new contract, TCS will receive Rs 2,600 on each transaction of Rs 5 lakh or more. The payout will be Rs 80 on each transaction below Rs 5 lakh.
As per the CEO of GeM, there is no possibility of runaway profit for management service providers if the GMV increases. GeM portal is used for online procurement of common-use Goods and Services required by various government departments, organisations and PSUs. “It is a very well-devised plan, we have different stages of that. Now is the stage where TCS will be taking control of the website while simultaneously developing a new portal,” PK Singh told the media.
