Finance Ministry Sets June 30 Deadline For MSMEs To Submit Refund Claims Of Forfeited Bid Security In Government Contracts

The finance ministry on Tuesday said MSMEs will have time till June 30 to submit refund claims for performance or bid security and liquidated damages forfeited by government departments and public sector entities during the Covid-19 period.

To give relief to MSMEs, finance minister Nirmala Sitharaman in 2023-24 Budget announced 'Vivad se Vishwas-I' scheme which provides that in cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security will be returned to them by government and government undertakings.

"The scheme was commenced from April 17, 2023 and the last date for submission of claims is June 30, 2023," a finance ministry statement said.

Under the scheme, ministries have been asked to refund 95 per cent of the performance security, bid security and liquidated damages forfeited/ deducted during the COVID-19 pandemic. Certain relief has also been provided to MSMEs debarred for default in execution of contracts during the Covid-19 period till March 31, 2022.

All contractors or suppliers registered as micro, small and medium enterprises (MSME) with the ministry of MSME as on March 31, 2022, would be eligible to claim a refund of the forfeited amount for contracts which had an original delivery or completion period between February 19, 2020, and March 31, 2022.

This relief will be provided in all contracts for the procurement of goods and services, entered into by any ministry/department/attached or subordinate office/ autonomous body/Central Public Sector Enterprise (CPSE)/Public Sector Financial Institution etc. with MSMEs.

Government e-Marketplace (GeM) has developed a dedicated web page for implementation of this scheme. Eligible claims shall be processed only through GeM, the finance ministry added.