The government of India was looking for a technology firm to run the government e-marketplace (GeM) from where it purchases goods and services. While large MNCs like Tata Consultancy Services, Sify and ecommerce majors like Flipkart and Amazon were in the race to bag this contract, Chennai-based mid-tier financial technology firm Intellect Design Arena has bagged the contract according to a report in the Economic Times.
This is one of the largest government IT contracts in recent times. The five-year contract is estimated to be worth around Rs 1000 crore.
A consortium led by Intellect, a Polaris group firm, and listed ecommerce firm Infibeam emerged the lowest bidder to run the online platform.
Along with Tata communications, Intellect and Infibeam, have proposed to manage GeM.
“The Intellect and Infibeam combine has bid with very aggressive pricing for it,” an executive at another consortium told ET.
Sify had partnered with Amazon Web Services to bid for the contract while TCS tied up with Tata’s ecommerce firm Tata CLiQ to bid.
Having bagged the contract, this consortium will manage the portal that takes care of procurement needs of the central and state governments for products such as laptops and air conditioners to furniture, stationery, and services like taxis and florists.
“We have set the ball rolling and plan to begin work by August 1,” a government official aware of the details told ET.
The tender floated by the government says that the company that manages the portal would get around 0.5% of the total transaction value as commission.
However, sources told ET that the winner consortium has bid much less than this amount.
ET reports that government procurements are at an estimated total of Rs 5-7 lakh crore a year for states and the central government put together. The finance ministry had amended the General Financial Rules to make it compulsory for all government departments to procure items and services from this portal.
Intellect will manage the operations. Being a part of the consortium, Infibeam will provide its expertise in e-commerce services while Tata Communications will offer its cloud services.
A Mumbai-based firm Nextenders has been roped in to manage e-bidding for the platform.
“Smaller companies can be extremely flexible and they agree with prices and specifications that larger firms can usually not match,” an expert who has been tracking the deal told ET.