Maharashtra courts start-ups for public supply contracts

Government revises policy norms giving start-ups a better chance to win contracts.

Written by Sandeep A Ashar | Mumbai | Published:October 20, 2016 2:12 am

BY TWEAKING the state’s procurement policy to allow registered start-ups a better opportunity to win public contracts, the Maharashtra government has kicked off a series of initiatives for building a thriving ecosystem for start-ups.

According to the revised policy measures, government and semi-government agencies would waive off the annual turnover and experience criteria if a registered start-up bids for a contract for public supplies. The waiver would be valid for a five-year period.

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Further, to give a leg up to ‘innovative start-ups’, the government’s revised policy adopts the Swiss challenge model. As per the model — a relatively new form of public procurement — the government can invite bids or expression of interest involving start-ups for a public project, and then publish the bid, before inviting competing counter proposals to either match or better the initial approval.

When contacted, Apoorva Chandra, Principal Secretary, Industries, clarified that the model would only be applicable for innovative start-ups.

The government has also conditioned that the interested innovative start-ups would have to obtain an innovation certification from the government-run Science and Technology Park, Pune. The relaxation would also be available for a three-year window period, he clarified.

With a exodus of new-age start ups reported from India to countries like Singapore and the UK, the Centre’s Department of Industrial Policy and Promotion (DIPP) had earlier asked states to create a “conducive and wholesome ecosystem” for start-ups to flourish.

While the Centre has itself rolled out tax sops for start-ups, it had asked states to act as “incubators” for innovative start-ups. “The whole aim is to improve access to the start-ups and encourage innovation,” said Chandra. The Maharashtra Cabinet Tuesday had approved the revisions.

Meanwhile, the Maharashtra government introduced 25 other revisions to the procurement policy, which had been modified last year after graft allegations were raised against public procurements by a couple of departments.

For ringing in transparency and streamlining the process of procurement of goods, the state government had last year introduced a provision where market rates would be compared before ordering purchases of certain branded items through rate contracts finalised by the Director General of Supplies and Procurement. But following complaints that this practice was “leading to confusion”, the government has decided to discontinue it. The government has also said that for all future contracts, goods samples certified any laboratory accredited by the National Accredition Board for Testing and Calibration Laboratory will be permitted.

The policy was also revised to introduce provisions allowing allotment of contracts by inviting ‘Expression of Interests’ or technical bids for supplies where the cost of the contract was a constant.

Top sources said that the provision was introduced after the government had faced difficulties in approving allotment of Take Home Ration contracts for supplementary nutrition to children and pregnant mothers earlier this year.

The government has also directed all departments to ensure that Earnest Money Deposits to bidders who fail to secure contracts are compulsorily returned within two months of the opening of the bid. The bidder will have the right to collect 10 per cent interest on the EMD amount if the deadline is not met, which, the government has said, would be collected from the official responsible for the lapse.

‘Biggest FDI’ deal remains uncertain

When Terry Gou, founder of the world’s largest contract manufacturer of consumer electronics Foxconn, signed a MoU with Maharashtra for setting up a semi-conductor unit and an iPhone assembly unit in the state, the ruling BJP sold it as the state’s largest foreign direct investment venture.

It had claimed that the Taiwenese giant would invest $ 5 billion in the state. But now, 14 months later, even senior government officials concede that the deal may not quite see the light of the day.

Sources said the firm is yet to submit its land requirement for the semi-conductor unit. The firm had earlier evinced interest in the land notified in Chakan-Talegaon for the semi-conductor unit, the government had been encouraging it to invest in the Vidharbha belt. But for now, the investment has run in uncertain weather, confirmed senior officials.

While it had earlier announced that the iPhone assembly unit would be rolled out from August, 2016, senior officials confirmed there has been no breakthrough in this regard too, with the firm yet to seal a tie-up with a local mobile company.