Public Procurement : Treat Empanelled Cloud Service Providers (CSPs) as compliant with local value addition norms

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Public Procurement : Treat Empanelled Cloud Service Providers (CSPs) as compliant with local value addition norms

Jayakumar Selvaraj

@Jayakumar

May 28, 2021

Public Policy

149

The Public Procurement (Preference to Make in India), Order 2017— Revision, issued by DPIIT, dated 16.09.2020.mandates that global tenders shall not be floated for any public procurement with an estimated value less than 200 crores. For such non global tenders, only Class-I local suppliers (local value addition >50%) and Class-II local suppliers (local value addition – 20% to 50%) are eligible to bid. Further, in cases where the Nodal Ministry has communicated that there is sufficient local capacity and local competition, only 'Class-I local supplier' will be eligible to bid.

In this context, there is an urgent need to address the uncertainty around demonstrating local value addition requirements by empaneled CSPs and prevent any delay in the public procurement process. There are several Request for Proposals (RFPs) that require a declaration on the local value addition, and an early clarification will help streamline the procurement process.

For cloud service providers offering services to the Government, the MEITY’s empanelment process as delineated in referenced document (b), requires the following.

The data center facilities and the physical and virtual hardware should be located within India.
Compliance to the government regulations wherein it is required that Cloud services offered shall be hosted within India and data residency shall also be limited to the boundaries of India.
All data functions and processing shall be performed within the boundaries of India.

Considering the above, empaneled CSPs offering services by leveraging data centers in India should be considered compliant for requirements under the above mentioned order.

In light of this, we have requested MeitY to issue a clarification that empaneled cloud service providers are Class-I local suppliers and that no additional declarations will be required other than the empanelment certificate, for participating in Government procurement. This will simplify the procedure for compliance and help address any delay in the public procurement process.

public procurement

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Jayakumar Selvaraj

Jayakumar