In a reverse auction, technically qualified sellers lower their prices in a live online round for a fixed time. The aim is to get the best price through open competition.
When does RA happen?
Under the General Financial Rules, purchases above ₹10 lakh on GeM go through online bidding or reverse auction. The buyer chooses this while creating the bid, so check the bid document: it will say whether the bid will be followed by a reverse auction.
How it works
- Sellers submit offers in the normal bid.
- The buyer evaluates technical compliance.
- Qualified sellers are invited to the RA with a start time and duration.
- During the RA, each seller can only reduce their price. The portal shows rank information as set by GeM.
- When the RA closes, the final prices decide the result, subject to the bid's terms.
Prepare before the RA
- Know your floor price. Work out your cost, GST, freight, warranty and margin before the auction, not during it.
- Check the time and your internet. Join a few minutes early from a reliable connection.
- Read the RA rules in the bid. Decrement steps and auto-extension rules differ.
Do not drop below your cost in the excitement of the auction. A loss-making order, plus performance security and penalties for delays, can hurt more than losing the bid.
Sources
SoftTender is a private consultancy. We are not affiliated with GeM, CPPP, NSIC or any Government department. Registration on official portals such as GeM is free; we charge only for our assistance service. We do not guarantee that any tender will be awarded.