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Printer Consumables OEMs manipulating GeM portal to extract unjustified prices

As per the government’s directives, all government organisations have to buy all office related equipment including stationery, IT Products, IT consumables from GeM portal.

By Newsd
Updated on :
Printer Consumables OEMs manipulating GeM portal to extract unjustified prices

The government’s public procurement marketplace- Government-e-Marketplace (GeM) is an initiative under the “Digital India” drive which helps in the process of public procurement by government departments and their autonomous bodies.

As per the government’s directives, all government organisations have to buy all office related equipment including stationery, IT Products, IT consumables from GeM portal.

However, the platform is being manipulated by the OEM (Original Equipment Manufacturer) of printer consumables as the GeM portal had bifurcated the ‘Printer Cartridges’ category into two namely ‘OEM Cartridges/consumable” and “Compatibles” to streamline the procurement process.

Now, the OEMs are manipulating the GeM portal to extract unrealistic and unjustified prices from the government which is resulting into a great loss to the Government Exchequer and consequently the very purpose of creation of GeM has been defeated.

The OEMs such as HP, Canon, Xerox, brother, Samsung, Lexmark, Epson and Nine Star (Pantum) who hold the major printer consumable business share on GeM portal and open market, are taking undue advantage which allows only OEMs and their selected authorized sellers/dealers to sell consumables on GeM portal.

The alarming factor is that OEM toners are readily available in open market at much lower prices than the prices registered on GeM portal. When we checked it with dealers in Nehru Place, Bhikaji Cama Place and Chawri Bazar we found the price gap to be upto 40 per cent on the MRP.

The activities of the OEMs are in contravention to the GeM GTC (General Terms & Conditions) Clause 3 (A)xi as according to this clause “GeM seller must offer its best possible lowest price on GEM and undertake that it would not sell or offer to sell the same product outside GeM in comparable quantity on similar terms and conditions at a price equal to or lower than Offered Price on GeM.  In case any such infringement by Seller is noticed, the Seller shall be liable to be removed/ debarred from the GeM.”

Although in line with the above clause, GeM has started an intensive drive to implement Price Sanitization Mechanism effective 9 February 2020 to check unreasonable pricing behaviour no concrete action has been initiated by GeM against these OEMs despite their being involved in manipulative practices causing huge loss to the Government Exchequer.

Currently, there are two ways to procure material on GeM- a) By placing orders upto Rs. 25000/- and b) by floating bids on GeM for value above Rs. 25000/-. The prices being quoted in bids by OEMs through their registered sellers is lower by at least 8-10% in comparison to the prices registered by OEMs for orders upto Rs. 25000/-. This must be analysed by GeM Data Analytic Team who can check the offered prices on GeM and the prices quoted in bids.

If OEMs can offer such huge discounts in bids, they can also offer the discounted rates for orders upto Rs. 25000/- value but are not doing so. GeM authorities should take cognizance of the situation and urge the OEMs to bring down their prices in the larger interest of all government buyers.

It is also a known fact that a few leading  OEMs such as Xerox, Canon, Nine Star, etc. are manufacturing compatible toners of other OEMs mainly HP, Canon apart from their own brand. In such a situation creating a separate category for OEMs has no relevance and GeM should maintain only a single category namely “ Printer Cartridges” for OEMs and Compatibles as well for the benefit of all government organisations which will be a huge saving to Government Exchequer.

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