Gandhinagar, June 13 (KNN) On the one hand Government has notified 25 per cent reservation for procurement from Micro and Small enterprises (MSEs), on the other hand thousands of small suppliers suffer from the commercial disputes with Government agencies which drag on for decades without resolution.  

“It is well acknowledged that public procurement is riddled with commercial disputes. Even if a supplier’s case is absolutely genuine no one in Govt agencies wants to take the onus and decide the case. Everyone plays safe and keeps pushing the case up the legal ladder from arbitration to lower to higher courts drowning thousands of MSEs in the process,” said Prashant Patel, President of Federation of Indian Micro and Small & Medium Enterprises (FISME).  

He was speaking at the Workshop organized on ‘Procurement by CPSEs with Special Focus on Vendor Interface with MSEs’ on June 11, 2022 in Gandhinagar and highlighted how MSMEs are crowded out in Public procurement.

According to FISME President, “Even if the dispute is about a small component of an order, the entire payment gets withheld and the case drags-on for decades. At least undisputed amount should be paid to suppliers to be fair and reasonable”.

“The ordeal of MSMEs begin with the pre-tendering stage and continues through tendering and post-tendering stage,” he said.

In his presentation he highlighted the difficulties of MSEs as to how large suppliers and often MNCs elbow them out by getting the Prequalification Criteria (PQRs) set in a manner that would keep the bar of qualification unrealistically high.

“Asking for difficult to fulfill past experience, very high annual turnover  and in-house expensive testing facilities are often used as tools to exclude MSMEs,” he shared. 

FISME has identified reforms in Public Procurement as one of the three focused areas. 

It has also suggested that Medium enterprises could be considered for under Public Procurement Policy for MSEs, which prescribed 25% procurement clause for central government purchases, where no MSE supplier has filed a bid in the tender.

FISME is also collating issues concerning MSMEs and public procurement and helping the team tasked by Office of DC MSME under Ministry of MSME for suggesting amends.  (KNN Bureau)