The government’s Vivad Se Vishwas I – Relief for MSMEs scheme announced by Finance Minister Nirmala Sitharaman in this year’s budget to settle pending disputes related to government contracts has provided relief to 137 enterprises as of June 1, said Pankaj Chaudhary, Minister of State in the Finance Ministry in a written reply to a question in the Rajya Sabha on Tuesday. However, claims of 1,103 MSMEs were pending as of June 1, Chaudhary added in his response.
According to the scheme, launched on April 17, MSMEs unable to execute government contracts during the Covid period were allowed a 95 per cent refund of the performance security, 95 per cent of the bid security, 95 per cent of the liquidated damages (LD), and 95 per cent of the risk purchase amount forfeited or deducted.
Further, for companies debarred due to default in the execution of such contracts, the scheme allows for revoking the debarment by issuing an appropriate order by the procuring entity. However, the company cannot file a claim if it has been ignored for placement of any contract due to debarment in the interim period (date of debarment and the date of revocation).
According to an Office Memorandum by the Department of Expenditure to Secretaries of all ministries and departments, relief will be offered in all contracts for procurement of goods and services entered into by any ministry, department, attached or subordinate office, autonomous body, CPSE, central banks, financial institutions etc., with MSMEs.
To file the claim, the original delivery period of the contract or completion period stipulated in the contract has to be between February 19, 2020, and March 31, 2022. Moreover, MSMEs must be registered with the government and share details including contract number, contracting authority, paying authority and the deducted amount with respect to the contract applicable with the respective procuring entity.
Importantly, the Finance Ministry in June had extended the deadline by a month till July 31 for MSMEs to submit claims under the scheme, as per a PTI report. The Department of Expenditure (DEA) has tasked the public procurement portal Government e-Marketplace (GeM) for implementing the scheme.
