Assam Procurement Preference Policy, 2021

Procurement, MSME Development

In supersession of Procurement Preference Policy, Assam, 2015 and Procurement Preference (Amendment) Policy, Assam, 2017, the Governor of Assam is hereby pleased to enunciate the Assam Procurement Preference Policy, 2021.

Whereas, in 2006 a Central Act namely, Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) came into force. Section 11 of the Act advocates for promotion and development of micro and small enterprises. The Procurement Preference Policy, Assam, 2015 as amended in 2017 was formulated as per the provision of Section 11 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

And, whereas, the formulation of the Procurement Preference Policy is required in order to align the State Policy with the Procurement Preferential Order issued vide No. P-45021/2/2017-PP (BE-III) dated 4th June 2020 by the Ministry of Commerce and Industry, Government of India.

Whereas, further to streamline the mechanism for procurement of maximum goods and services by various Government Departments/PSUs of the State Government, from the enterprises of the State without compromising quality, competitiveness and cost effectiveness, the Government intends to procure goods and services produced and provided by Micro and Small Enterprises, by the Government Departments/ State Public Sector undertakings and its aided institutions.

Objective:

The objective of the Policy shall be as follows, namely:-

To facilitate growth of Small and Micro Enterprises, to provide opportunity to local entrepreneurial talents and to maximize avenues for employment generation,
Increased participation by Small and Micro Enterprises in the State Government Stores Purchase Programme,
Enhancement of competitiveness amongst the Small and Micro Enterprises,
Encourage linkages between Small and Micro Enterprises and Large Enterprises,
Increased share of supplies of Small and Micro Enterprises to State Government Departments and its aided institutions and Public Sector Enterprises,
Development of Micro and Small Enterprises vendor in rural areas and enhancing participation of Small and Micro Enterprises.

Eligibility:

1 The Micro and Small Enterprises shall have its own production facilities /base in the State.
2 The Head Office or Corporate Office of such registered unit/company/enterprises shall be within the territorial jurisdiction of Assam.
3 Any Micro and Small Enterprise who has obtained an Udyam Registration shall be eligible under the Policy.
4 Such units shall be called enterprises registered under Procurement Preference Policy and when such units supply/intend to supply goods or render services to State Government offices Corporations/PSUs etc. they shall be called suppliers.
5 The Micro and Small Enterprise/other enterprise and unit must have engaged 90% local people in employment.
6 Any Micro and Small Enterprise registered in Assam shall have to maintain 'local content' of a particular item of goods or services or works as specified in a consolidated notification to be issued by Chief Secretary for different items from time to time. The tender for services and works shall not be divisible amongst the procuring entity.
7 Micro and Small Enterprises have to submit a declaration that it has not been blacklisted by the Central/ State Government or by any other agencies/corporations of the Central/State Government and has no dues pending in any of the offices of Central/ State Government or in any other agencies/corporations of the Central/State Government.
8 Any Startup who has registered in Assam and obtained My Assam Startup ID (MASI) shall be eligible under the Policy.
9 The Policy will not be applicable for the procurement under Externally Aided Projects (EAP).

Benefits:

A Benefits for Registered Startups

Startups registered in Assam shall be eligible to avail the following benefits:

Tender Sets: Issue of tender sets free of cost Earnest Money: 50% exemption from payment of Earnest Money Security Deposit: 50% waiver in payment of Security Deposit

Developing Micro and Small Enterprise vendors, enhancing participation of Micro and Small Enterprises including those owned by Scheduled Castes or Schedule Tribes and Women

ASIDC shall also act as a Nodal Agency for promotion and development of Micro & Small Enterprises in the State and take necessary steps to develop appropriate vendors by organizing Vendor Development Programmes, Buyer-Seller Meets for the development of Micro & Small Enterprise in the State. Outreach programme shall be conducted by ASIDC to cover more and more Micro and Small Enterprises owned by persons belonging to Schedule Caste, Schedule Tribe and women. For the purpose of the same State Government shall make a separate budget provision for ASIDC to carry out the works.

B Mandatory Procurement from Small & Micro Enterprises

Every Department of the State Government or its Agencies or aided Institutions shall set an annual goal of procurement for Micro and Small Enterprises, with the objective of trying to achieve overall procurement of minimum 25 percent of total annual purchases of products and services rendered by Small and Micro Enterprises in a period of three years. In case there are no supplier in the Micro and Small Enterprise Sector of the State who have the capacity to supply required items, department/organization is free to procure from open market through stipulated processes.

C Purchase Preference

Subject to the provisions of this Policy and to any specific instructions issued by the Nodal Department or in pursuance of this, purchase preference shall be given to local Micro And Small Enterprise/Startup.
The Micro and Small Enterprise or Start-up who will quote the price closest to L1 who is not a Micro and Small Enterprise or Start-up will be given the price preference and supply order of 25% of total quantity of the items proposed to be procured.
If more than one Micro and Small Enterprises or Start-ups quote the same price over the price of L1 and L1 is not the Micro and Small Enterprise or Start-up, in that case the 25% of total quantity of the items proposed for procurement will be equally divided among them.
If the closest quoted rate is more than 20% of the L1 price in that case such Micro and Small Enterprise or Start-up will be offered only 20% of Price Preference provided such unit is willing to supply the 25% of total quantity of the items proposed for procurement.

D Exemption of small purchases

In procurements, where the estimated value to be procured is less than Rs. 5 lakhs, such procurement shall be exempted from this Policy. However, it shall be ensured by procuring entities that procurement is not split for the purpose of avoiding the provisions of this Policy.

E Requirement for specification in advance

The margin of purchase preference and the procedure for preference to make in the State shall be specified in the notice inviting tenders or other form of procurement solicitation and shall not be varied during a particular procurement transaction.

F Powers to grant exemption and to reduce minimum local content

The Administrative Department undertaking the procurement (including procurement by any entity under its administrative control), with the approval of their Minister-in-charge, may by written order for reasons to be recorded in writing.

reduce the minimum local content below the prescribed level, or
reduce the margin of purchase preference below 20% or
exempt any particular item or supplying entities from the operation of this Policy or any part of the Policy.