Bhubaneswar: To boost micro, small and medium enterprises, the State Government has approved the Odisha Public Procurement Preference Policy, 2023.
Informing about the move, Chief Minister’s Office (CMO) in X said, “#Odisha has approved a new Public Procurement Preference Policy for #MSMEs furthering the #MakeInOdisha initiative to support and empower the local business community.”
This new policy entails several features aimed at fostering growth and development of small manufacturing enterprises by favouring preferential procurement of their manufactured goods by State Government establishments, it said.
According to officials, the State Government had notified Odisha Procurement Preference Policy for Micro and Small Enterprises, 2015. As more than 7 years have passed by in the meantime and since the State Government wants to boost manufacturing activities in Odisha; the State Government brought the new policy in the name of `Odisha Procurement Preference Policy for Micro and Small Manufacturing Enterprises — 2023′ a few days ago.
To boost manufacturing activities in the State, Micro and Small Manufacturing Enterprises located in Odisha (OSMEs) will be given some preferences and relaxations, in procurement of goods by State Government Departments and their subordinate offices/organisations/ agencies, etc.
As per the current definition MSMEs in the MSME Development Act ‘2006, manufacturing business entities located in Odisha having total investment in Plant and Machinery upto Rs 10 crores and annual turn-over upto Rs 50 crore will be categorized as OSMEs.
The Start-up companies or business entities, registered with Start-Up Odisha (a Government of Odisha Company under MSME Department), working in Odisha in manufacturing sector and having total investment in Plant and Machinery upto Rs 10 crore and annual turn-over upto Rs 50 crore shall also be treated as OSMEs, as per the Policy.
The new policy can be said to be applicable to all such organisations located in the State wherein procurement of goods is done out of State Government fund or State Government arranged fund, it includes societies, cooperative societies, autonomous bodies, ULBs/PRIs, State PSUs/Corporations, educational institutions.
In intra-state Tender (i.e., in procurement of Exclusive List goods) process, there shall not be any requirement of deposit of cost of tender paper and EMD. There shall not be any eligibility criteria pertaining to annual turnover and past experience. Performance Security, if any, shall not exceed 2.5% (Two point five percent) of the contract value or procurement value.
Similarly, OSMEs taking part in open tender processes shall be exempted from the requirement of depositing cost of Tender Paper and EMD. Annual turnover criteria shall be relaxed in favour of OSMEs by 90%.
While the State Government intends to facilitate growth of OSMEs by making this Procurement Preference Policy, it is expected that OSMEs will not compromise on quality and timely delivery of goods to be procured from them by procuring entities. In case of any deficiency in quality, quantity or timely delivery of goods ordered for procurement, the procuring entity concerned will be free to take suitable action against the defaulting OSME, including blacklisting from future procurement for a certain period, the Policy says.
This Procurement Preference Policy is intended to facilitate sale of goods manufactured by OSMEs; not goods traded by them. If an OSME wants to sell goods through trading, then the benefits of this procurement preference policy shall not be applicable to it.
However, the Policy shall not apply to any ongoing procurement process for which notice inviting tender or other form of procurement solicitation has been made prior to the coming into force of this Policy.
