Bhubaneswar: The State Cabinet led by Chief Minister Naveen Patnaik on Monday approved the Odisha Procurement Preference Policy for Micro and Small Manufacturing Enterprises 2023.
The new policy is expected to boost the business activity of the ‘Odisha Small Manufacturing Enterprises’ by preferential procurement of their manufactured goods by State Government establishments.
The policy applies to all State Government establishments as far as the procurement of goods by them is concerned. This policy will not apply to procurement of services including Work Contracts and EPC contracts.
The policy intends to benefit Odisha Small (and Micro) Manufacturing Enterprises (OSMEs) whose turnover is not more than Rs. 50 Crores per annum.
Startups having annual turnover of not more than Rs. 50 Crores will also benefit under this policy at par with other small manufacturing enterprises.
The policy has a provision of an ‘Exclusive List’ whereunder goods which are manufactured by a fairly large number of Odisha Small Manufacturing Enterprises shall be enlisted. Procurement of such goods by State Government establishments shall be mandatorily made based on competitive bidding limited only to Odisha Small Manufacturing Enterprises; i.e. through intra-state tender process. (Once this new policy is notified, items will be enlisted under `Exclusive List’ from time to time.)
Procurement of goods which are not enlisted under the Exclusive List shall be made through an open tender process. Odisha Small Manufacturing Enterprises will be entitled to PRICE PREFERENCE in open tenders with a price preference margin of 10% for 25% of the total procurement quantity. For example, if the L1 bid is Rs.100 and the lowest bid amongst Odisha Small Manufacturing Enterprises is Rs.109; then the L1 bidder will supply 75% of the procurement quantity at the L1 rate of Rs.100 and the lowest-bidding Odisha Small Manufacturing Enterprises will supply the 25% of procurement quantity at its bid price of Rs.109.
The price preference concept will not be applicable if the bid of the lowest-bidding Odisha Small Manufacturing Enterprises is beyond the L1+10% range. In that case, the concept of PURCHASE PREFERENCE will be applicable for 15% of procurement quantity. For example, if the Ll bid is Rs.100 and the bid of the lowest-bidding Odisha Small Manufacturing Enterprise is Rs.l 11; then the L1 bidder will supply 85% of the procurement quantity at Ll rate of Rs.100 and the lowest-bidding Odisha Small Manufacturing Enterprises will get to supply 15% of the procurement quantity at Ll rate of Rs.100 (not at its bid price of Rs.111).
In intra-state as well as open tender processes, Odisha Small Manufacturing Enterprises will be exempted from the deposit of the cost of tender paper and EMD. They shall also be fully exempted from the requirement of past work experience criteria. For intra-state tender, they shall be exempted from annual turnover criteria whereas for open tender, the annual turnover criteria shall be relaxed in favour of them by 90%. For example, if the annual turnover criteria in open tender is Rs. 10 Lakhs for general bidders, it will be Rs. 1 Lakh for Odisha Small Manufacturing Enterprises. In open tender, the performance security deposit shall also be relaxed in favour of Odisha Small Manufacturing Enterprises by 75%. For example, if the performance security deposit in an open tender for general bidders is Rs. 1 Lakh, the same for Odisha Small Manufacturing Enterprises will be only Rs.25,000/-.
The policy applies to the procurement of goods where the procurement quantity is divisible and not applicable to the procurement of goods where the procurement quantity is not divisible.
