The procurement and approval processes in government procurement systems tend to be tedious and overly complicated. Several procedures must be followed with permission from the appropriate authority who can be preoccupied. This causes the requisition to stall, delaying it by several days or even weeks.

Given the size and the interests of the stakeholders, public procurement is vulnerable to unfair practices imposing high costs on both the government and the society. With current procurement processes in place, preferential treatment to a seller is difficult to trace and visibility around contracts, buyer and seller details is limited.

Despite the Medium-Small Enterprises (MSEs) provisions, the participation of domestic MSEs in the public procurement activities remains low in India. Apart from resource related entry barriers including anti-competitive elements, many MSEs do not also take part in public procurement due to a perception that government procuring entities often delay in releasing the contract payments. This perception affects the financial stability of the MSEs.

In spite of the initiatives for standardizing the bid documents and code of contract following the international agencies such as IMF and the World Bank, there continues to be a multiplicity of bid documents across the entities in terms of addition/rephrase/repetition of clauses/provisions. Such ambiguities and contradictions in the bid documents stand against the principles of standardization, transparency, and accountability

The existence of anti-competitive practices by the bidders’ community tends to hamper the procurement process by negating the best value of money. Competition issues in India mainly concern with collusive bidding, bid rigging, cartelization, and abuse of dominance. Such anti-competitive elements have detrimental effects on the public procurement through various means such as eliminating competition and denying fair/minimum price.

With manual procurement processes, it’s acutely unrealisable to keep audit of each and every transaction & engagement between buyers & suppliers.

Manual data entry is prone to errors and inconsistencies. This can lead to delays in processing, inaccurate reporting, and difficulty in identifying trends or patterns for better decision-making.

Manual processes lack transparency, making it easier for sellers to collude undetected. Without real-time data and oversight, agreements to fix prices or divide markets become a possibility.

Manual approvals and limited audit trails create opportunities for manipulation of the system. The lack of a secure, auditable record allows for potential collusion between buyers and sellers, such as tailoring bid specifications or leaking confidential information.