GeM Split Bid / Splitting

GeM Split Bid or Splitting refers to the practice of intentionally dividing what is a single procurement requirement into multiple smaller orders, each structured to fall below the threshold that would trigger competitive bidding or a higher level of procurement scrutiny. It is explicitly prohibited under GFR 2017, CVC guidelines, and GeM's terms of service.

What is GeM Split Bid / Splitting in government procurement?

India's procurement framework establishes thresholds at which the procurement method must change: below Rs 25,000 (direct purchase without competition), Rs 25,000 to Rs 5 lakh (system-selected three-seller comparison), and above Rs 5 lakh (competitive bid or reverse auction). These thresholds exist to ensure that larger procurement gets proportionally more competition, protecting the government from paying above-market prices.

Splitting occurs when a buyer with a requirement worth, say, Rs 12 lakh places four purchase orders of Rs 3 lakh each, each qualifying as a three-seller comparison rather than a competitive bid. The result is the same total quantity at the buyer's preferred seller, without the open competition that a Rs 12 lakh bid would require. This deprives the market of the ability to compete for the order and may result in the government paying higher prices.

Splitting can occur across time (placing orders over successive months for what is a single annual requirement), across products (separating a bundled requirement into components, each below the threshold), or across organisational units (different cost centres within the same organisation placing separate orders for what is operationally a unified requirement).

CVC has treated bid splitting as a serious integrity violation, officers found to have deliberately split requirements to favour a vendor face departmental proceedings and have faced prosecution in egregious cases. CAG audit reports regularly surface instances of splitting in PSUs and central government departments.

GeM combats splitting through platform-level controls (the carting restriction), audit trail analysis, and pattern detection algorithms that flag when the same buyer places multiple orders for the same product category within a short period. These flags go to the department's internal vigilance and, in some cases, to CVC's monitoring dashboard.

Why it matters for bidders

Sellers who benefit from splitting, because a buyer is placing multiple small orders to channel business to them rather than floating a competitive bid, face serious risk. When the pattern is flagged and investigated, both the buyer officer and the seller can face action. GeM can suspend a seller's account if the platform determines the seller was aware of and facilitated splitting. The seller's future access to GeM is jeopardised, making the short-term revenue gain very expensive in the long run.

Legitimate sellers who lose business to competitors benefiting from splitting should file a complaint through GeM's grievance mechanism or directly to the department's vigilance officer. The audit trail on GeM makes splitting investigations straightforward, the evidence is entirely within the platform's own records.

For sellers, the right response when a buyer suggests placing multiple small orders rather than a single bid is to decline the arrangement and suggest the buyer consolidate the requirement and float a proper bid. Winning through a transparent competitive process creates a clean contract and a long-term relationship; winning through splitting creates legal exposure that can end the relationship abruptly.

Example

A stationery company is a preferred vendor for a PSU's administrative office. The office manager tells the stationery company informally that they need approximately Rs 18 lakh worth of supplies for the year and would place 8 quarterly orders to "keep it simple." A vigilance review six months later identifies the pattern: six orders for nearly identical stationery items from the same seller, each just under Rs 3 lakh, all placed by the same officer. GeM's audit trail shows consistent ordering pattern. The vigilance officer flags it as suspected splitting. The office manager faces a show-cause notice. The stationery company's GeM account is suspended pending inquiry. The annual requirement is consolidated and floated as a competitive bid, won by a different seller at a price 12% lower than the split-order price.

Key rules / thresholds

GFR 2017 Rule 146 explicitly states: "Powers of procurement should not be split up to avoid the necessity of obtaining the sanction of the higher authority." CVC Circular No. 07/02/21 specifically reiterates the prohibition on splitting in the context of GeM procurement. Officers found to have split procurement face penalties under the Central Government Service Rules and potentially the Prevention of Corruption Act if intent to benefit a specific vendor is established.