To ensure fair competition, government procurement rules strictly regulate order sizes and splitting thresholds. Both buyers and sellers must comply with these guidelines.
Important Compliance Disclaimer
Before starting, please note that SahayakAI is an independent, private technology platform. We are not affiliated with, authorized, or officially connected with the Government e-Marketplace (GeM Portal) or the Government of India. The official portal is hosted at https://gem.gov.in. Use this manual for educational guidance, and always verify current criteria on the official site.
GFR 2017 Rule 144 Compliance
General Financial Rules (GFR) prohibit splitting demands or purchasing goods in small values to avoid the necessity of obtaining the sanction of higher authorities. For instance, a buyer cannot make five direct purchases of ₹20,000 each in a single week for the same item to bypass the ₹25,000 threshold that would otherwise require L1 comparison.
Legitimate Order Splitting (L1 Matching)
While splitting to avoid bidding is prohibited, buyers can legitimately split orders to ensure supply security. This is common in large bids where:
- A single supplier cannot meet the total delivery quantity requirements.
- MSE Purchase Preference is applied: Non-MSE L1 is awarded 75% of the bid, and MSE sellers within L1 + 15% are offered 25% after matching the L1 price.
Bidding Strategies for Sellers
- Ensure your prices are competitive to fall within the L1 + 15% band if you qualify as an MSE.
- Do not accept or encourage buyers asking to split invoices to stay within direct purchase limits. It can lead to compliance audits.
To calculate compliance boundaries and optimal pricing, use our GeM L1 Margin Calculator.