MSE purchase preference: L1 plus 15% and the 25% share
MSE purchase preference. Under the Public Procurement Policy for Micro and Small Enterprises, a registered MSE quoting within L1 plus 15% may match L1 and supply up to 25% of the tendered value.
Checked against its sources on 23 September 2026.
How it works
After bids are opened, a registered micro or small enterprise whose price is within 15% of L1 can bring its price down to L1 and be awarded up to 25% of the tendered value. Several qualifying MSEs share that portion proportionately. Where the item cannot be split, the Ministry of MSME's FAQ allows the whole order to go to the MSE.
It sits inside a wider target: central ministries, departments and PSUs are to buy at least 25% of their goods and services from MSEs each year, with 4% earmarked for SC/ST-owned and 3% for women-owned MSEs.
Who qualifies
MSEs with a valid Udyam registration, for goods they manufacture and services they provide. Traders and resellers are excluded. The same MSEs are exempt from EMD and receive tender sets free, but not from performance security.
Separately, a buyer may relax prior turnover and experience criteria for MSEs, subject to quality and technical specifications. That is a discretionary relaxation shown in the bid, not part of the preference.
Where ScanX reads this for you
For every GeM match, ScanX opens the bid document and puts this field in the row you receive, read from the document itself rather than typed by us.