GFR 2017 Rules for Government Procurement: Thresholds & Exemptions

The General Financial Rules (GFR) 2017 are the backbone of government procurement in India. Every central government tender must comply with GFR provisions. Understanding these rules helps you predict procurement processes, challenge non-compliant tenders, and structure your bids correctly.

Key Procurement Rules

• Rule 149 — every authority delegated with financial powers can procure goods. Basic principle of procurement delegation.
• Rule 154 — procurement up to ₹25,000 can be done without quotations (petty purchase). ₹25,001–₹2,50,000 needs minimum 3 quotations.
• Rule 155 — above ₹2,50,000 requires advertised tender or procurement through GeM.
• Rule 161 — bid security (EMD) provision. Amount should be 2–5% of estimated value. MSE exemption specified.
• Rule 166 — rate contracts and framework agreements for repetitive procurement.
• Rule 170 — performance security (5–10% of contract value) from successful bidder.

Procurement Thresholds

• Up to ₹25,000 — direct purchase. No quotation required.
• ₹25,001 – ₹2,50,000 — limited tender (minimum 3 quotations from known suppliers)
• Above ₹2,50,000 — advertised tender on CPPP/GeM with minimum 21 days bid period
• Above ₹200 crore — global tender allowed (below this, only domestic suppliers unless no domestic source exists)

Bid Validity and Timelines

• Minimum bid submission period: 21 days for advertised tenders (can be reduced to 14 in urgent cases with recorded reasons)
• Bid validity: typically 90 days, extendable to 180 days with bidder's consent
• EMD validity: must exceed bid validity by 45 days
• Performance security validity: contract period plus 60 days

Transparency Requirements

• All tenders above ₹2,50,000 must be published on CPPP (Central Public Procurement Portal)
• Bid opening must be done in the presence of bidders or their representatives
• Evaluation criteria must be disclosed in the tender document upfront — no post-hoc criteria
• Award details must be published. All unsuccessful bidders must be informed of the reason for rejection.

What Vendors Should Know

• If a department is not following GFR rules (e.g., not publishing on CPPP, unreasonably short bid period), you can raise this with the department or CVC
• GFR applies to central government. States have their own financial rules, but many mirror GFR provisions.
• GFR 2017 replaced GFR 2005. The key change was making GeM mandatory and simplifying procurement categories.
• CVC guidelines supplement GFR — check CVC circulars for additional integrity requirements