Services on GeM — manpower, housekeeping and transport, questions answered
Supplying goods on GeM and providing services on GeM are different businesses that happen to share a portal. On goods you price a product and deliver it. On a manpower, housekeeping, security or transport contract you take on people, statutory obligations and a monthly wage bill, in exchange for a margin of a few per cent — and the contract is often won or lost on whether the bidder understood that.
These are the specific questions. For bidding mechanics common to both, see how to bid on GeM.
How services differ
Is bidding for a service different from bidding for a product?
The mechanics are similar — categories, listings, bids, often a reverse auction — but what you are quoting is not. On a product bid you quote a price for a thing. On a manpower bid much of the price is fixed before you arrive, and you quote only the part that is yours.
Which services go through GeM?
The common ones are manpower outsourcing, housekeeping and sanitation, security, transport and vehicle hire, and a range of professional and technical services. Buyers can also raise a custom bid for a service that has no standard category.
Do I register differently as a service provider?
You register as a seller in the same way, but you list under service categories and the eligibility a buyer sets tends to look different — experience in similar contracts, annual turnover, and often statutory registrations.
Pricing a manpower bid
What exactly am I quoting?
Usually the service charge — also called the administrative charge — and nothing else. The typical structure of a manpower bid breaks the cost into separate per-person line items: the minimum wage for the post and area, provident fund, the EPF administrative charge, EDLI, ESI, and bonus. Those are fixed by law or by notification. You do not quote the wage line.
What you compete on is the percentage you add on top for running the contract and making a profit.
How big is the service charge, realistically?
Thin, and often bounded at both ends. Bids commonly set a floor and a ceiling — a few per cent at the bottom to a high single figure at the top — and a quote below the floor can be treated as unresponsive rather than as a keen price. The exact band is set in the bid, and it varies.
Two consequences follow, and they are the whole point of this page:
- Your margin is a small percentage of a cost base you do not control.
- Almost every risk in the contract — compliance, wage revision, late payment, attrition — sits underneath that margin.
So where does the money actually go wrong?
Not usually in the quote. It goes wrong in the gap between paying wages monthly, on time, because you are legally obliged to, and being paid by the buyer when the paperwork allows. If payment takes two months and your margin is four per cent, you are financing the government's wage bill out of working capital at a rate no lender would match.
Work out how many months of wages you can carry before you bid. That number, not the service charge, decides whether the contract is viable.
Statutory compliance
Who is responsible for EPF and ESI on the deployed staff?
You are. They are your employees for compliance purposes, and the registrations, the monthly returns and the liability are yours. Buyers commonly require proof of the registrations at bid stage and proof of remittance during the contract, often as a condition of releasing payment.
What happens if I pay less than the notified minimum wage?
It is a breach of the Minimum Wages Act as well as of the contract, and on a government contract the buyer is the party most likely to find out — because the wage line is in the bid document and the remittance proof is in the file. The structure of these bids assumes the notified wage is paid; underquoting the wage line is not a commercial strategy, it is a liability.
Which minimum wage applies — central or state?
It depends on the establishment and the work, and the two differ. Check the notification that applies to that buyer and that location, and check the date: rates are revised, and in many cases there is a periodic adjustment linked to cost of living.
The minimum wage is revised mid-contract. Who absorbs it?
Read your bid before you need the answer. A well-drafted services bid provides for the wage component to move with the notification, because the wage was never yours to set. A bid that fixes your total rate for three years while the wage underneath it rises is a bid where you absorb every revision out of a few per cent.
This single clause is worth more scrutiny than the rest of the document, and it is the one most often skimmed.
Benefits and eligibility
Do MSE benefits apply to services?
Yes, and here the position is better than on goods. Where exemption from earnest money is available under the MSE category, it runs to manufacturers for goods and service providers for services — so a genuine service provider is on the right side of the distinction that excludes traders on a goods bid.
As always it has to be validated in your GeM profile, not merely certified on paper. See MSME benefits.
What eligibility do service bids usually set?
Experience of similar contracts over a stated period, and a minimum average annual turnover. MSE and startup relaxations exist on some bids and not others. MSE status does not remove a turnover or experience requirement — it is not a substitute for qualifying.
During the contract
How is performance measured, and can they deduct?
Yes. Services bids carry performance conditions — attendance, replacement of absent staff within a stated time, supervision, uniforms, police verification for security posts — and deductions attach to failures against them. Unlike a goods contract where delivery is a single event, a services contract is assessed every month, so a deduction regime compounds.
What if the buyer wants more people than the contract covers?
Get it in writing and get the rate agreed before deploying anyone. Staff added informally at a supervisor's request are staff you are paying and may struggle to bill.
What happens at the end of the contract?
Plan for it from the start, because the people are yours. Whether the next contractor takes on the staff, and on what terms, is not something the buyer resolves for you.
The mistakes that cost people money
- Quoting a service charge below the bid's floor and being held unresponsive.
- Pricing the margin without pricing the months of wages you will carry before payment.
- Treating EPF and ESI as the buyer's problem.
- Missing the clause that decides who absorbs a mid-contract wage revision.
- Assuming MSE status covers a turnover or experience shortfall.
- Deploying extra staff on a verbal request.
The short version
On a GeM manpower or housekeeping contract you are not quoting a price so much as accepting a role: pay the notified wage and the statutory contributions on time, every month, and collect a few per cent for doing it. The commercial questions that matter are how long you can fund wages before payment arrives, and who absorbs a wage revision. Settle both before you quote, because the service charge is too thin to absorb either.