Intellect, Infibeam bag contract for government marketplace

NEW DELHI: Chennai-based mid-tier financial technology firm Intellect Design Arena has pipped biggies such as Tata Consultancy Services and Sify to bag one of the largest government IT contracts in recent times.

A consortium led by Intellect and homegrown ecommerce major Infibeam has emerged the lowest bidder to run the online platform from where the country's largest buyer, the Government of India, purchases goods and services. The five-year contract is estimated to be worth around Rs 1,000 crore, sources in the know said.

Intellect and Infibeam, along with Tata Communications, have proposed to manage the government’s e-marketplace portal (GeM), which has been modelled after popular ecommerce platforms such as Flipkart or Amazon. “The Intellect and Infibeam combine has bid with very aggressive pricing for it,” said an executive at another consortium. Intellect, Infibeam and Tata Communications did not respond to ET’s request for comment citing client confidentiality. TCS declined to comment.




While Sify had partnered with Amazon Web Services, TCS had roped in Tata group ecommerce firm Tata CLiQ for the contract which saw a high degree of competition among the bidders. The scaled-up version of the portal will take care of the procurement needs of central and state governments, ranging from big ticket items such as laptops and air conditioners to furniture and daily use items such as stationery, as well as services like taxis and florists.

“We have set the ball rolling and plan to begin work by August 1,” said a government official aware of the details. As per the tender floated by the government, the company that manages the portal could get as much as 0.5% of the total transaction value as commission. However, sources said the winner consortium has bid much less than this amount.

According to estimates, government procurements total Rs 5-7 lakh crore a year for states and the central government put together. The finance ministry had amended the General Financial Rules to make it compulsory for all government departments to procure items and services from this portal.

Under the plan, Tata Communications will offer its cloud services, will Infibeam will provide its expertise in ecommerce services. One of the first Indian ecommerce companies to go public, Infibeam is also in the news currently for its speculated interest in acquiring another homegrown ecommerce firm, Snapdeal. Mumbai-based Nextenders has been roped in to manage e-bidding for the platform. Intellect will manage the operations. “Smaller companies can be extremely flexible and they agree with prices and specifications that larger firms can usually not match,” said an expert who has been tracking the deal.