GFR Rule 144, Direct Purchase

GFR Rule 144 is the provision in the General Financial Rules 2017 that allows central government departments to purchase goods up to Rs 25,000 directly from the local market without conducting a formal competitive tender. It is the simplest procurement method available to the government.

What is GFR Rule 144 in government procurement?

Rule 144 of GFR 2017 reads, in essence, that goods required for government use may be purchased without formal competitive bids if the estimated value does not exceed Rs 25,000. The purchase is to be made from an authorised vendor in the local market, and the competent officer must certify that the price paid is fair and reasonable.

In practice, Rule 144 purchases cover routine consumables and small-value items: stationery, minor repairs, emergency supplies, and similar day-to-day requirements. The department is expected to verify that the price is not excessive by checking market rates, but there is no requirement to obtain multiple quotations. A single purchase officer can approve transactions within their delegated financial powers.

The rule is subject to the GeM mandate under Rule 149: if the goods being purchased are available on GeM, even purchases below Rs 25,000 are expected to be channelled through GeM's direct catalog purchase option rather than local market purchase. This GeM-first principle means that Rule 144's local market route is now largely limited to items not yet listed on GeM or emergency situations where portal access is not practicable.

Splitting a purchase worth Rs 60,000 into three separate Rs 20,000 transactions to keep each within the Rule 144 threshold is explicitly prohibited and is a common finding in CVC audits and CAG reports. Departments found to have split purchases face adverse audit observations and potentially disciplinary action.

Why it matters for bidders

For most vendors in formal business, Rule 144 purchases are invisible, they happen through local market transactions or direct GeM catalog orders. Suppliers who are registered on GeM with a well-maintained catalog benefit even from sub-Rs 25,000 demand, since buyers use GeM's direct catalog purchase option for amounts in this range.

The practical implication for businesses targeting government spending: list your products on GeM at competitive prices and keep your catalog current. A government buyer looking for something below Rs 25,000 will use GeM's catalog if your product is there, giving you a transaction you would otherwise never know about.

Example

A district-level government office needs five reams of A4 paper urgently, worth approximately Rs 1,800. The stores officer checks GeM, finds the item listed by multiple sellers, and places a direct catalog purchase of Rs 1,800 from the cheapest eligible seller, this is a GeM-mediated Rule 144 transaction. If the paper were not on GeM, the officer could buy it from the local market with a cash payment from the petty cash fund, subject to the competent authority's approval.

Key rules / thresholds

• Maximum value: Rs 25,000 per transaction.
• GeM-first rule: items available on GeM must be purchased through GeM even below this threshold.
• Splitting purchases to stay within this threshold is prohibited and is an audit violation.
• Above Rs 25,000: minimum three quotations are required under GFR Rule 145.
• The competent authority approving a Rule 144 purchase must certify the price as fair and reasonable.