How GeM Bids Are Evaluated: Bid, RA and L1 Rules

By Khanal Group · Tenders and bids · Updated 25 October 2026 · Not legal or tax advice

Buying modes on GeM by value

General Financial Rules (GFR) 2017 Rule 149 makes the Government e-Marketplace mandatory for central ministries and departments buying common-use goods and services available on it, and sets the buying mode by value. The thresholds below were restated by the Department of Expenditure's OM No. F.1/3/2024-PPD of 10 July 2024 and are repeated in the General Terms and Conditions on GeM (GTC 4.0, version 1.29 of 25 March 2026).

Value of purchase	Mode	How the seller is chosen
Up to ₹50,000	Direct purchase	Any available seller meeting quality, specification and delivery period; reasons recorded if the lowest priced product is not chosen. No ceiling for automobiles.
Above ₹50,000 up to ₹10,00,000	L1 purchase	Lowest priced seller among the offers of at least three different manufacturers. Bidding or RA may also be used.
Above ₹10,00,000	Bid or reverse auction	Lowest price meeting the requirement, after mandatory online bidding or reverse auction.
Up to ₹5,00,000 (optional)	Push Button Procurement	Through bidding only; at least five bids; category with at least ten sources; contract placed by GeM without human intervention.

The GTC adds that bidding should be considered the preferred mode above ₹50,000, and the GFR forbids splitting a demand to avoid L1 buying, bidding or RA. There is no performance security for direct purchase, L1 purchase or Push Button Procurement contracts.

How a GeM bid is set up

The buyer picks a product category and base technical parameters from catalogues on GeM, then sets quantity, consignees, delivery period, bid security, performance security, dates and bid validity. Points to read in every bid document:

Type of bid: single packet or two packet. In a two packet bid, the price is opened only for technically qualified bidders.
Evaluation method: for example item-wise or total value-wise. A bunch bid groups several items; where it is evaluated total value-wise, bids are compared on their total for all the items, and the GTC refers to the "primary product" for exemptions.
Bid to RA enabled, and the RA qualification rule chosen.
Bid offer validity, MII and MSE purchase preference, and any bid splitting ratio.

The GTC requires the bid to be published giving at least 10 clear days for submission. Sellers may offer any one of their products already listed in the category, and may offer equivalent or superior specifications; the buyer evaluates against its requirement and end use. Offers stay valid for 15 days from bid opening for a bid (or as the buyer stipulates) and 30 days from RA initiation for Bid to RA, extendable by consent.

Technical evaluation

In a two packet bid, the buyer first checks each bidder's eligibility and documents against the bid and ATC: experience, turnover, OEM authorisation, certificates and compliance with specification. Bid documents usually state a short window for technical clarifications. Eligibility based on turnover and past performance is taken from data GeM validates from sources such as the PAN database, MCA 21, Udyam and GSTN. Buyers may add criteria only through GeM's filters and ATC module, not by referring to outside documents. A bid quoting nil charges is treated as non-responsive. See the GeM bid document checklist.

Price evaluation and L1

Unless the ATC says otherwise, bids are evaluated on the total all-inclusive landed price at the consignee's destination. The lowest such price among technically qualified bids is L1. In a reverse auction the bidder quotes the total offer price, and the successful bidder gives the full price break-up before award. The estimated bid value shown in a bid is, according to typical bid documents, only a guide for EMD and eligibility, not a benchmark for prices.

Bid to RA: who gets into the reverse auction

If Bid to RA is enabled, sellers submit technical and commercial bids by the closing date; after technical evaluation, GeM runs a reverse auction under the qualification rule the buyer chose.

50% elimination rule

RA among the lowest 50% of technically qualified bidders by price, rounded up for an odd number (7 qualified bidders: L1 to L4).
With only 2 or 3 qualified bidders, all take part.
If the bid is split among N sellers, at least N sellers go to the RA.
If only one OEM's products would remain, more sellers are added to bring in at least one more OEM where available.
MSE bidders within 15% of a non-MSE L1, and Make in India bidders within 20% of a non-MII L1, are also allowed in.

H1 elimination rule

RA among all technically qualified bidders except the highest quoting (H1). H1 is still allowed in if only 2 or 3 bidders qualify; if the bid is split among N sellers and H1 falls within N; if eliminating H1 would leave only one OEM's primary product; if H1 is an eligible MSE within 15% of a non-MSE L1; or if H1 is an eligible MII bidder within 20% of a non-MII L1.

During the auction

GeM decides the start or reference price and the decrement step; bidders see the start price, step, prevailing lowest bid and their own last bid.
A lower bid in the last 15 minutes extends the end time by 15 minutes, repeatedly.
If GeM's service is disrupted, the RA restarts from the last recorded lowest price, and prices already quoted remain binding.

After the RA, award follows the MSE Order and the Make in India Order, so an eligible MSE or Class-I bidder may still be offered part or all of the quantity at the L1 price. See MSE purchase preference and Make in India preference.

Ties, splitting and award

Identical L1 prices: for goods, a forced RA among all technically qualified bidders under the 50% elimination rule; for services quoted at the lowest allowed price, a random selection by GeM among the L1 bidders.
Bid splitting: for critical items, large quantities, urgent delivery or limited vendor capacity, the buyer may split the order in a ratio stated in the bid. L1 gets at least the first share; the L1 rate is counter-offered to L2, L3 and so on for the rest.
Reasonableness: the buyer may still reject any bid, including the lowest, and must satisfy itself that the price is reasonable before award.
Performance security: after a bid or RA, the buyer may ask for up to 5% (3% to 5% under the GFR), submitted within 15 days of award. See EMD, BG and PBG.

If you disagree with the evaluation

The GTC's grievance clause says bid-related grievances go first to the buyer or its designated authority, quoting the bid clauses and your GeM seller ID. GeM itself takes up only complaints about violations listed in the disclaimer published with the bid, and only if the complaint was first raised with the buyer before bid opening without a satisfactory answer. Decisions such as the choice of procurement mode, and policy-based purchase preferences, are not open to review.

Checklist for a GeM bidder

Note the bid type, evaluation method, Bid to RA setting and RA rule on day one.
List your product in the right category well before closing; listing approval normally takes about 48 hours.
Price on a landed, all-inclusive basis to the consignee.
Know your floor price before the RA; quotes in the RA are binding.
If you are an MSE or Class-I supplier, check whether your price falls within 15% or 20% of L1.
Keep the price break-up ready to upload after the RA.
Budget the performance security and its validity.

K-Tender keeps GeM bids in the tender register with their dates and reminders, holds the bid checklist, and records approvals for bid / no-bid and the commercial decision against the version approved. Its reports track win and loss and competitor prices from published results. The bidding itself happens on GeM.

Common questions

Up to what value can a buyer purchase directly on GeM?

Up to ₹50,000 from any available seller meeting the quality, specification and delivery period, under GFR Rule 149 as amended by the Department of Expenditure's OM of 10 July 2024. Automobiles have no ceiling for direct purchase.

What is L1 purchase on GeM?

For purchases above ₹50,000 and up to ₹10 lakh, the buyer orders from the seller with the lowest price among at least three different manufacturers offering the item on GeM. Above ₹10 lakh, bidding or reverse auction is mandatory.

Who is eliminated before a GeM reverse auction?

It depends on the qualification rule in the bid. Under H1 elimination, the highest technically qualified bidder is left out, with exceptions such as when only two or three bidders qualify. Under 50% elimination, only the lowest half of the technically qualified bidders, rounded up, take part.

How long does a GeM reverse auction run?

The bid sets the schedule, and the GTC adds auto-extension: a lower bid in the last 15 minutes extends the end time by another 15 minutes, and this repeats while lower bids keep coming in those last minutes.

What happens if two bidders quote the same lowest price on GeM?

For goods, the GTC provides a forced reverse auction among all technically qualified bidders with the 50% elimination rule. For services where several L1 bidders quote the lowest allowed price, GeM selects one through a random algorithm.

How GeM bids and reverse auctions are evaluated