Issues faced by Start Ups/SMEs working with Government: Inputs Sought

With this post we would like to seek your experiences on working with the Government as a Startup or SME.

Here we are specifically referring to a Startup/SME working with Central, State or Local Administration and the issues faced by them. Are such opportunities available to Startups/SMEs?

Once we know all the issues, we will have a separate discussion on solutions that must be implemented so the bottlenecks can be removed.

We look forward to your inputs! more  

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RFPs initiated by different departments of Central & State Govts generally debar the Startups/ SMEs by including 'Annual Turnover' in the 'eligibility criteria' for the companies to respond. Most of the SMEs/ Startups get eliminated by the turn over criteria. They are thus denied the opportunity to participate in the process. In fact, the best of their indigenous products & services get discarded. The opportunity is snatched by vendors whose turn over is high, even though their products are technologically outdated. My suggestion is to remove the 'annual turn over criteria' from the RFPs and thus give equal opportunity to all. In case the RFP mentions that preference will be given to SMEs/ Startups, it will further boost the business of such enterprises and make them more competitive. As an example, excellent indigenous software products in the 'Human Resource Management' domain are available today (which the Indian vendors are able to sell in US/ international market), but Govt Deptts in India still prefer to go in for the branded HR software products (of foreign suppliers). And these products are being purchased at 5 to 10 times the cost of Indian products. This is a truth and 'vested interests' is probably the only reason for purchasing foreign goods. Unfortunately, the forums like NASSCOM and others who guide the Govt departments seldom encourage the Startups/ SMEs. They have yet to define which all Tenders by the Govt Deptts should be strictly 'for SMEs'. more  
Corruption at every level and delays in making payments is rampant more  
Eligibility Criteria for Govt Projects are still too rigid for a small startup to meet the mark. more  
We again invite everyone's inputs on this... more  
Startups suffer badly under norms of Govt procurement. Its a non starter as it stands more  
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