State Cabinet Approves Odisha Procurement Preference Policy for MSME 2023

Bhubaneswar: The State Cabinet today approved Odisha Procurement Preference Policy for Micro and Small Manufacturing Enterprises 2023.

The policy is applicable to all State Government establishments as far as the procurement of goods by them is concerned. It will not be applicable 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 not more than Rs. 50 Crores will also be benefited under this policy at par with other small manufacturing enterprises.

This policy has a provision of ‘Exclusive List’ where under 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 on the basis of 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 open tender process. Odisha Small Manufacturing Enterprises will be entitled for price preference in open tenders with a price preference margin of 10% for 25% of total procurement quantity.

Price Preference concept will not be applicable if the bid of lowest-bidding Odisha Small Manufacturing Enterprises is beyond L1+10% range. In that case, concept of PURCHASE PREFERENCE will be applicable for 15% of procurement quantity. For example, if the L1 bid is Rs.100 and the bid of the lowest-bidding Odisha Enroll Manufacturing Enterprise is Rs 111; then the L1 bidder will supply 85% of the procurement quantity at LI rate of Ps.100 and the lowest-bidding Odisha Small Manufacturing Enterprises will get to supply 15% of the procurement quantity at L1 rate of Rs.100 (not at its bid price of Rs. 111).

In intro- state as well as open tender process, Odisha Small Manufacturing Enterprises will be exempted from deposit of cost of tender paper and EMD. They shall also be fishy exempted from the requirement of past work experience criteria. For intro-state tender, they shall be exempted from annual turnover criteria whereas for open tender, the annual turnover criteria shall be relaxed in favour of than by 90%.