MATRIX ON PROPOSED CHANGES IN THE PUBLIC PROCUREMENT RULES, 2004

NOTE

The words in bold & underlined are proposed additions / amendments in the existing rules. The struck through words/ statements are proposed to be deleted from the existing rules. In case a new change/amendment is proposed, please provide complete justification/rationale.

Subject/ Rule No. in PP Rules 2004/

Existing alongwith proposed Rules Justifications for Revision/ Insertion of new rule(s)

Please provide your views/ comments here

1. Short title & commencement

(1) These rules may be called the Public Procurement Rules, 2004.

No change.

2. Definitions (1) In these rules, unless there is anything repugnant in the subject or context,-

(a) “bid” means a tender, or an offer, in response to an invitation, by a person, consultant, firm, company or an organization expressing his or its willingness to undertake a specified task at a price;

(b) “bidder” means a person who submits a bid;

(c) “competitive bidding” means a procedure leading to the award of a contract whereby all the interested persons, firms, companies or organizations may bid for the contract and includes both national competitive bidding National Competitive Bidding (NCB) and international competitive bidding International Competitive Bidding (ICB );

(d) “Conflict of Interest” (d) “Conflict of Interest” involves a conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and

Definition of ‘force account’ has been added at “ga” and ‘framework contract’ at “gaa” as these concepts are new additions in the Rules. Definition at (j) has also been revised.

The definition regarding ‘conflict of interest’ has now become

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responsibilities while evaluating the bid /proposal.”(d) (e) “contractor” means a person, consultant, firm, company or an organization who undertakes to supply goods, services or works;

(e) (f) “contract” means an agreement enforceable by law;

(f) (g) “corrupt and fraudulent practices” includes the offering, giving, receiving, or soliciting of anything of value to influence the action of a public official or the supplier or contractor in the procurement process or in contract execution to the detriment of the procuring agencies thereby creating a conflict of interest ; or misrepresentation of facts in order to influence a procurement process or the execution of a contract, collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the procuring agencies of the benefits of free and open competition and any request for, or solicitation of anything of value by any public official in the course of the exercise of his duty;

an international requirement to be placed in rules for identifying corrupt and collusive practices in public procurement.

FIDIC provides global proprietary contracting

(g) (h) “emergency” means natural calamities, disasters, accidents, war and operational emergency which may give rise to abnormal situation requiring prompt and immediate action to limit or avoid damage to person, revenue, property or the environment;

(ga) (i) “force account” means work which a procuring agency executes using its own resources including labor, equipment, materials, and supplies.

(gaa) (j) “Framework contract” means a contract whereby the procurement is made for a certain volume or quantity of a particular good, a set of goods or services and works over a specific period against an agreed sum or

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rate (lump sum or per item).

(k) “Invitation For Bid (IFB)” is an advertisement published in a newspaper or posted on a website inviting suppliers / contractors to meet Client’s/Buyer’s needs.

(l) “Request For Quotation (RFQ)” Document means set of Standard Bidding Documents for goods & services with clear product definition, provided to interested bidders after publication of an Invitation For Bid and includes sections indicated in Rule 23 (2).

(m) “Request For Proposals (RFP)” Document means set of Standard Bidding Documents for buyers whose needs cannot be met with generally available products or services and includes sections indicated in Rule 23 (2).

(n) “Request For Expression of Interest (REoI)” is a formal advertisement in a newspaper or on a website requesting consultants, vendors or contractors to submit general or specific information concerning potential future purchase of goods, services or both.

(l) “Expression of Interest (EoI)” is the response of consultant, vendor or contractor to buyer’s Request for Expression of Interest (REoI) published in newspaper or posted on website, showing his interest in participating for the activity.

h) “lowest evaluated bid / proposal ” means,-

FIDIC i.e., Fédération Internationale d Ingénieurs

Conseils (International Federation of Consulting Engineers), a Geneva based recognized international authority on issues relating to construction, supplies, consulting & engineering best practices.

For goods having budget estimate exceeding Rs 2 million require RFQ document to mitigate contractual risks.

For goods & services under Two Stage and Two-Stage Two Envelop bidding proposals are solicited through an RFP document for more complex procurements.

REoI is associated with an RFP Document.

templates and standardized definitions, which have been adopted by Pakistan Engineering Council (PEC), Islamabad.

EoI is also associated with a process initiated under an RFP document.

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(i) a bid most closely conforming to evaluation criteria and other conditions specified in the bidding document Standard Bidding Documents under Rule 29; and

(ii) It may either be “any highest ranking bid or proposal” resulting out of the combined score of the technical & financial evaluation criteria based on price factor & non-price factors like technical merit, aesthetic & functional characteristics, environmental characteristics, after sales services, technical assistance, running cost, delivery date, delivery period, period of completion, operation, maintenance frequency, terms of payment and product or process certifications etc, assigned as per complexity of the activity under the Merit Point Evaluation Methodology in order to get the best quality of products and services at the most economical price, and to be called the Most Economically Advantageous Bid / proposal; or

(iii) the lowest price bid after having conformed to the least / minimum technical criteria to become Lowest Price Technically Acceptable (LPTA) Bid . The goods or services acquired through LPTA bid do not usually require highest quality and are routine items with least complexity of specifications.

(ii) having lowest evaluated cost;

(i) “Ordinance” means the Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002);

(j) “repeat orders” means procurement of the same commodity from the same source without competition and includes enhancement of respective contracts;

(k) “Responsiveness” is the substantial compliance by the

The term “Lowest evaluated bid” gives an impression of selection at the lowest price and tends to confuse the contracting authorities. However, PPRA Rules 2004 always seem to encourage highest quality of the product acquired through the lowest possible price which may not be the lowest price, but the most economical price as evident by the definition of ‘best value for money’ at Rule 2(l) of the said Rules 2004.

The terms ‘Most Economically Advantageous Bid’ and ‘Lowest Price Technically Acceptable Bid’ need to be made part of the definition of lowest evaluated bid to differentiate between the two bids with respect to the complexity of the procurement activity. as indicated in Rule 2(h)(ii) and (iii).

.

‘Responsiveness’ definition needs to be included in the Rules as it is a vital process at the

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bidder at the time of bid opening, to certain conditions published in a procurement notice or an Invitation For Bids. These conditions may relate to:(i) timely submission of bid (ii) submission of bid security in prescribed manner and upon the prescribed format, either in the form of a readily encashable financial instrument or an enforceable bank guarantee on prescribed format, as required by the procuring agency.(iii) compliance to prescribed bid validity period(iv) submission of bid forms duly signed and stamped(v) any other condition which the procuring agency may deem fit for compliance by the bidder at the time of bid submission.

No-compliance to the said conditions shall render the bidder non-responsive at the time of bid opening and his bid shall not be considered for further technical and financial evaluation.

(k) (l) “supplier” means a person, consultant, firm, company or an organization who undertakes to supply goods, services or works; and

(l) (m) “value for money” means best returns for each rupee spent in terms of quality, timeliness, reliability, after sales service, up-grade ability, price, source, and the combination of whole-life cost and quality to meet the procuring agency’s requirements.

(2) The expressions used but not defined in these rules shall have the same meanings as are assigned to them in the Ordinance.

In order to protect the integrity of the competitive process, the determination of responsiveness must be made from the bid documents at the time of bid opening, without resorting to subsequent explanation from the bidder or other extrinsic evidence. 

start of procurement management to establish bidder’s initial eligibility to get further evaluated and is often confused with technical & financial qualification process.

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3. Scope &applicability

Save as otherwise provided, these rules shall apply to all procurements made by all procuring agencies of the Federal Government whether within or outside Pakistan.

No change.

4. Principles of procurements

Procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner, the object of procurement brings value for money to the agency and the procurement process is efficient and economical.

No Change

5. International and inter-governmental commitments of the Federal Government.

Whenever these rules are in conflict with an obligation or commitment of the Federal Government arising out of an international treaty or an agreement with a State or States, or any international financial institution the provisions of such international treaty or agreement shall prevail to the extent of such conflict.

No Change

6. Language (1) All communications and documentation related to procurements of the Federal Government shall either be in Urdu or English or both. Except where a procuring agency is situated outside the territories of Pakistan and procurements are to be made locally, the procuring agency may use the local language in addition to Urdu or English.

(2) Where the use of local language is found essential, the original documentation shall be in Urdu or English, which shall be retained on record; for all other purposes their translations in local language shall be used: Provided that such use of local language ensures maximum economy and efficiency in the procurement.

(3) In case of the dispute reference shall be made to the original documentation retained on record.

No Change

7. Integrity pact (a) Procurements exceeding the prescribed limit shall be subject to an integrity pact and code of ethics, as specified by regulation with approval of the Authority Federal

The words “Federal Government” have been replaced with the word

Prescribed limit for exceeding the contract price may

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Government, between the procuring agency and the suppliers or contractors.

(b) Procurements exceeding 15% of the total contract price shall be allowed subject to the approval of the competent authority as prescribed in the Procurement Plan.

“Authority” in accordance with Section 27 of PPRA Ordinance, 2002.

be properly defined in the rules.

8. Procurement planning

For each financial year Within one year of commencement of these rules, all procuring agencies shall prepare their annual procurement plans for their proposed procurements with the objective to object of realistically determine determining the requirements of the procuring agency, within its available resources, delivery time or completion date, proposed procurement procedure and the outputs and outcomes that are likely to accrue to the procuring agency in future. Procurement Plan should reconcile with budget of the procuring agency. The procurement plan thus prepared shall be uploaded on Authority’s website and on website of the respective procuring agency, if available and proceed accordingly. The regulation for an appropriate manner and mechanism for procurement plan shall be issued by the Authority.

As Procurement Plan for the donor-funded projects are more flexible and dynamic, they may be specified in advanced without the projected cash flows.

The original rule does point to the need of developing Annual Procurement Plan by the procuring agencies but it only asks for devising a mechanism to prepare the procurement plan’- it falls short of explicitly making it mandatory for the Procuring Agency to prepare procurement plans. The proposed rule also suggests that procurement planning should be in line with resources available and projected cash flows. The requirement for mandatory annual plans and then publicizing it is reflected in Rule 9 which is titled as “Limitation on Splitting

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or Regrouping”- hence the subject and contents of Rule 9 does not match. Rules 8 and 9 have accordingly been revised to put the things in the right context.

9. Limitation on splitting or regrouping of proposed procurement.

The procuring agencies shall not split or package a procurement plan with the intention to shorten or facilitate the procurement process and approval mechanism, unless the procuring agency is satisfied that :

a. block acquisition of goods, services or works will unnecessarily hold up available resources;

b. technical reasons indicate that splitting or packaging will improve quality;

c. The impact of weather, geographical spread on certain procurement particularly in case of works contract will affect its execution with regard to quality and delivery schedule. However, the consultants may be bound to prepare the exact/nearest estimates to avoid splitting & regrouping of civil works at a later stage.

d. An emergency exists as defined in rule 2(h).

Provided that any splitting or packaging shall be made part of the revised procurement plan and uploaded on the Authority’s website as well as on the website of the procuring agency, if functional.

The original rule puts a bar on splitting or regrouping the already planned procurements without taking into account the “Packaging” factor or provision for lots in procurements, any deviations were to be explained in the regulations. The existing rule has been revised / amended in toto.

There are, however, circumstances when splitting and packaging has to be done for competition and benefitting from economies of scale. In the proposed rule broad areas have been defined which may necessitate packaging/ splitting. The parameters for these conditions shall be explained in the

Frequent mis-use of splitting in civil work project needs to be prevented.

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regulations.

9A. Lots(New insertion)

(1) If splitting up the procurement contract into separate lots is financially and technically more advantageous to the procuring agency, and it is not done to restrict competition, the procurement may be so divided and separate lots may be awarded to different bidders.

(2) In case of dividing a procurement contract into separate lots, the procuring agency shall include in the bidding documents:

(a) The number and the nature of the lots; (b) How bids for one or more lots may be submitted,

specifying whether separate bids shall be submitted for each lot.

(3) All lots may be awarded to the one bidder, if that solution achieves the lowest evaluated bid for the combined lots.

(4) If one or more lots have been awarded, the procuring agency may, in any new procurement proceedings, modify the division of the lots that have not been awarded.

Rule 9A is proposed to facilitate procuring agencies to make bulk purchases of commodities like Urea, Sugar and other items. It is also intended that this rule will help procuring agencies like, TCP and USC to procure goods in large volume at a time without engaging in price matching with the bidders other than lowest evaluated bidder.

10. Specifications

Specifications shall allow the widest possible competition and shall not favour any single contractor or supplier nor put others at a disadvantage. Specifications shall be generic and shall not include references to brand names, model numbers, catalogue numbers, name or origin of a country or similar classifications. However if the procuring agency is convinced that the use of or a reference to a brand name, or a catalogue number or origin of a country is essential to complete an

No change.

(Most often, procuring entities try to exclude bidders from a particular country from which they expect lower quality goods, by naming it in

Instead of excluding a competitor by mentioning a specific country name, the relevant product specifications and

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otherwise incomplete specification, such use or reference shall be qualified with the words “or equivalent”.

Provided that this rule shall not apply to procurement made by public sector commercial concerns on the demand of private sector client specifying, in writing, a particular brand, model or classification of equipment, machinery or other objects.

specifications). reference certifications of excellence from reputed certification awarding bodies may be added in the specifications section for getting quality products.

11. Approval mechanism.

All procuring agencies shall provide clear authorization and delegation of powers for different categories of procurement and shall only initiate procurements once approval of the competent authorities concerned has been accorded.

No change.

12. Methods of advertisement

(1) Procurements of two one hundred thousand rupees and up to the limit of three two million shall be advertised on the Authority’s website in the manner and format specified by regulation by the Authority from time to time. These procurement opportunities may also be advertised in print media, if deemed necessary by the procuring agency:

Provided that the lower financial limit for advertisement on Authority’s website for open competitive bidding shall be the prescribed financial limit for request for quotations under clause (b) of rule 42.

(2) All procurement opportunities over three two million shall be advertised on the Authority’s website as well as in other print media or newspapers having wide circulation. The advertisement in the newspapers shall principally appear in at least two national dailies, having digital editions as well, one in English and the other in Urdu.

(3) In cases where the procuring agency has its own website it

This aspect of procurement process has been dealt with in the original rule in a pretty satisfactory manner. However, minimum ceiling has been proposed to be enhanced because of inflation since last revision of ceiling. The original rule did not state the advertisement mechanism where International Competitive Bidding is to be done. This omission is now being proposed through addition of a sub-rule (5).

This is to ensure wider circulation.

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may also post all advertisements concerning procurement on that website as well.

(4) A procuring agency utilizing electronic media shall ensure that the information posted on the website is complete for the purposes for which it has been posted, and such information shall remain available on that website until the closing date for the submission of bids.

(5) In case of International Competitive Bidding, in addition to Authority’s website and two national dailies, the advertisement may also be placed in at least one international magazine or international journal of repute having wide international circulation.

13. Response time.

(1) The procuring agency may decide the response time for receipt of bids or proposals (including proposals for pre-qualification) from the date of publication of an advertisement or notice, keeping in view the individual procurement’s complexity, availability and urgency. However, under no circumstances the response time shall be less than fifteen days for national competitive bidding and thirty days for international competitive bidding from the date of publication of advertisement or notice. The dates of uploading or publication of Invitation For Bid (IFB) / Request For Expression of Interest (REoI) and opening of bids / proposals a re inclusive in response time.

All advertisements or notices shall expressly mention the response time allowed for that particular procurement along with the information for collection of Standard Bidding Documents (SBDs) bid documents which shall be issued till a given date, allowing sufficient time to complete and submit the bid by the closing date: Provided that no time limit shall be applicable in case of emergency.

The existing sub-rules (2) & (3) which dilated on the response time for advertisements published in print or electronic media. However, the sub rules were confusing as both the sub rules talked of similar situations but proposed a different treatment with regards to response time. The existing above sub-rules are deleted and new sub-rule (2) has been proposed.Existing rule is silent on the response time for submission where a corrigendum is to be

As per the practice of the FIDIC, the words “Invitation For Bids (IFB)” and “Request For Expression of Interest (REoI)” may be mentioned for clarification of advertisement whether it is a an RFQ Document or an RFP document.

The words “bid documents” may be replaced by the words “Standard Bidding Documents (SBDs)” wherever

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(2) The response time for procurements falling under Rule 12(1) shall be calculated from the date of appearance of advertisement on Authority’s website whereas for procurements falling under Rule 12(2) the response time shall be calculated from the date of first appearance of advertisement in print media.

3) The procuring agency shall allow sufficient extension in time for bid submission where a corrigendum to a procurement notice or an addendum containing modifications or amendments to the Standard Bidding Documents either due to correction by the procuring agency itself or as a result of pre-bid / pre-proposal conference (s) is to be issued.

Provided that in cases where remaining time for submission of bid is less than seven days from the date of issuance of a corrigendum or an addendum , the extension in time for bid submission shall be given for at least seven days.

issued. A new sub-rule (3) has been added to address this gap.

used. The purpose of using the word “Standard Bidding Documents (SBDs)” is that all govt procuring entities are bound to use standard proprietary templates of FIDIC adopted by Pakistan Engineering Council (PEC) vide P&D’s revised notification dated June 2007, and re-notified Feb 2008

14. Exceptions It shall be mandatory for all procuring agencies to advertise all procurement requirements exceeding prescribed financial limit which is applicable under sub-clause (i) of clause (b) of rule 42. However under following circumstances deviation from the requirement is permissible with the prior approval of the Authority-

(a) the proposed procurement is related to national security and its publication could jeopardize national security objectives; and

(b) the proposed procurement advertisement or notice or publication of it, in any manner, relates to disclosure of information, which is proprietary in nature. or falls within the definition of intellectual property which is available from a

The words appearing in sub-rule (b) i.e. “or falls within the definition of intellectual property” shall be treated as deleted which were already covered in negotiated tendering in Rule 42(d).

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single source.15. Pre-qualification of suppliers and contractors.

(1) A procuring agency, prior to the floating of tenders, invitation to bids Invitation For Bids (IFB) proposals or offers in procurement proceedings, may engage in pre-qualification of bidders through widely advertised pre-qualification criteria approved by the competent authority, in case of services, civil works, turnkey projects and in case of procurement of expensive and technically complex equipment to ensure that only technically and financially capable firms having adequate managerial capability which have earlier been pre-qualified, are later invited through pre-qualification notice though an Invitation For Bid (IFB) to submit bids in the manner as prescribed under rules 12 and 13. Such pre-qualification shall solely be based upon the ability of the interested parties to perform that particular work satisfactorily.

(2) A procuring agency while engaging in pre-qualification may take into consideration the following factors, namely:-

(a) relevant experience and past performance;

(b) capabilities with respect to personnel, equipment, and plant;

(c) financial position;

(d) appropriate managerial capability; and

(e) any other factor that a procuring agency may deem relevant, not inconsistent with these rules.

The underlined words in bold shall be added in the existing sub-rule (1) to make the existing rule clear with regard to initial advertisement of prequalification notice.

Pre-Qualification Notice is used for only selecting the technically & financially capable firms through some approved pre-qualification criteria. These pre-qualified firms are then invited through an Invitation for Bid (IFB) publicized in the manner as prescribed under rules 12 and 13 to submit their bids.

15A. Entering into Framework Contract .

(New addition)

(1) Where the procuring agency has to procure similar items at different intervals in a defined period of time and it expects better price because of economies of scale, it may enter into a framework contract for the supply of a quantity of similar items at specified prices during that

Framework contract has been introduced in the rules, which allow government to make a

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defined period.

(2) Framework contracts may be concluded following open competitive bidding with one or more suppliers to provide a range of goods, works and services over a defined period of time not exceeding one year.

(3) Procuring entities may procure similar items at different intervals through web-portals created for executing Framework contracts.

central contract for procurements over a specified period of time. Significant chunk of resources and time is expended on procurement of standardized and uniform items across different Procuring Agencies. At times the price variance in different procurement transactions is significant, on occasions the Procuring Agencies over a period of times enters into several contracts. Different options have been provided in which framework contract could be invoked. Introduction of this type of contract into the rules will help save time and resources.

Framework contracts are nowadays executed on web-portals created by Contracting Authorities as dynamic electronic purchasing systems being international best practice to adopt standardized procedures to save time and unnecessary paper work. This proposed sub-rule will pave the way for introduction of e-procurement in the rules for making them as an enabler of socio-economic development.

16. Pre-qualification process.

(1) The procuring agency engaging in pre-qualification shall announce, in the pre-qualification documents, all information required for pre-qualification including instructions for preparation and submission of the pre-qualification

o

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documents, evaluation criteria, list of documentary evidence required by suppliers or contractors to demonstrate their respective qualifications and any other information that the procuring agency deems necessary for prequalification.

(2) The procuring agency shall provide a set of pre-qualification documents to any supplier or contractor, on request and subject to payment of price, if any. Explanation.- For the purposes of this sub-rule price means the cost of printing and providing the documents only.

(3) The procuring agency shall promptly notify inform each supplier or contractor submitting an application to get pre-qualify pre-qualified whether or not it even if he has been earlier pre-qualified in some other pre-qualification activity, and shall make available to any person directly involved in the pre-qualification process, upon request, the names of all suppliers or contractors who have been pre-qualified. Only suppliers or contractors who have been pre-qualified shall be entitled to participate further in the procurement proceedings i.e. invitation to bids through Invitation For Bid (IFB) within a reasonable time which shall not be less than seven fifteen days directly from the pre-qualified bidders, and following procurement proceedings under rule 22 to 37.

(4) The procuring agency shall communicate to those suppliers or contractors who have not been pre-qualified the reasons for not pre-qualifying them.

(5)Prequalification shall be specific to a procurement activity or for a defined period of time not exceeding twelve months. Such time period shall be clearly mentioned in the prequalification notice or documents.

Pre-qualification and Invitation For Bid are two totally different processes.

Pre-Qualification procedure should be used to filter out or select the capable bidders from the rest of the lot. As an international best practice, the list of such pre-qualified bidders should be widely publicized on organization’s website or in the newspapers to make this selection more transparent. These pre-qualified bidders

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(6). There shall be a minimum of three bidders to be pre-qualified who should meet evaluation criteria and other terms and conditions of the pre-qualification documents. In case less than three bidders are prequalified, the process may be cancelled and the procuring agency shall resort to open competitive bidding through post- qualification in accordance with Rules 21 to 37.

should then be invited through an IFB which is publicized under rules 12 and 13 to submit their bids whenever the procurement activity is to be initiated. Usually pre-qualification exercise is done at a much earlier stage in the procurement calendar.

17. Qualification of suppliers and contractors

(1) A procuring agency, at any stage of the procurement proceedings, having credible reasons for or prima facie evidence of any defect in supplier’s or contractor’s capacities, may require the suppliers or contractors to provide information concerning their professional, technical, financial, legal or managerial competence whether already pre-qualified or not: Provided that such qualification shall only be laid down after recording reasons therefor in writing. They shall form part of the records of that procurement proceeding.

(2) A procuring agency may undertake post qualification of lowest evaluated bidder, for more complex and large contracts, if deemed necessary, as per criteria provided in the prequalification bidder’s qualification and evaluation documents. Post Qualification may include;

(a) Approaching the clients, quoted by the bidder, to confirm about its his previous work experience and to verify experience statements made by the bidder in their submitted pre-qualification documents or

The existing rule shall be numbered as sub-rule (1) and new sub-rule has been proposed to be added as (2) for Post Qualification which can help to ensure the quality of procured goods, works or services and to avoid any delays, through confirmation of bidder’s capacity and capability, to execute the contract.

In the post-qualification process, a bidder may be evaluated on the basis of firm qualification and evaluation criteria given in the Standard Bidding Documents (SBDs) and may not necessarily have any prior pre-qualification criteria.

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to verify their customer satisfaction certificates.

(b) Visit the premises of the bidder to verify information contained in its his submitted pre- qualification documents or to verify information contained in his documents submitted during the post-qualification process particularly its facilities including human resource, plant and equipment or any others information. There shall be no discussions concerning the financial bid or its evaluation.

(c) In case the lowest evaluated bidder fails the post- qualification, the procuring agency may consider the next ranked bidder or resort to rebidding as per rule 34.

18. Disqualification of suppliers and contractors.

The procuring agency shall disqualify a supplier or contractor if it finds, at any time, that the information submitted by him concerning his qualification as supplier or contractor was false and materially inaccurate or incomplete.

No change.

19. Blacklisting of suppliers and contractors

The procuring agencies shall specify a mechanism and manner to permanently or temporarily bar, from participating in their respective procurement proceedings, suppliers and contractors who either consistently fail to provide satisfactory performances or are found to be indulging in corrupt or fraudulent practices. Such barring action shall be duly publicized and communicated to the Authority for uploading on its website within seven days of their blacklisting, and ensuring that such blacklisted suppliers and contractors do not participate in any public procurement activity till they are blacklisted.

To make clear and to publicize that blacklisted firms shall be uploaded on authority’s website the words “for uploading on its website’’ are added in the existing rule.

Usually intimation to the public about the blacklisting of a supplier or contractor is significantly delayed and not communicated to other government entities, and the blacklisted firm keeps on

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Provided that any supplier or contractor who is to be blacklisted shall be accorded adequate opportunity of being heard in person.

participating in other public procurement activities. Time limit will ensure to check such delays and participation.

20. Principal method of procurement

Save as otherwise provided hereinafter, the procuring agencies shall use open competitive bidding as the principal method of procurement for the procurement of goods, services and works.

No change.

21. Open competitive bidding.-

(1) Subject to the provisions of rules 22 to 37 the procuring agencies shall engage in open competitive bidding if the cost of the object to be procured is more than the prescribed financial limit which is applicable under sub-clause (i) of clause (b) of rule 42

(2) Open competitive bidding shall be of two types depending upon the nature and size of procurement:

(a) National Competitive Bidding (NCB) may be used for procurements which by nature, scope and size are unlikely to attract foreign competition.

(b) International Competitive Bidding (ICB) may be used for procurements which are of complex nature and involvement of international bidders will add value to the quality of the proposed procurement.

To categorize Open Competitive Bidding existing rule shall be numbered as sub-rule (1) and new proposed sub-rule shall be added as sub-rule (2).

Existing rule explains the procedure / steps involved in open competitive bidding method in a detailed manner but it needs to make a distinction between National Competitive Bidding and International Competitive Bidding. It should also clearly mention the conditions for International Competitive Bidding.

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22. Submission of bids

(1) The bids shall be submitted in a sealed package or packages in such manner that the contents are fully enclosed and cannot be known until duly opened.

(2) A procuring agency shall specify the manner and method of submission and receipt of bids in an unambiguous and clear manner in the bidding documents Standard Bidding Documents . Conditional and alternative bids shall not be accepted by the procuring agency.

(3) Conditional bids shall not be entertained.

(4) One bidder can only submit a single bid for a procurement unless the procuring agency specifically allow alternative bid in the bidding documents. In case a procuring agency allows submission of alternative bids then it shall specify how such bids will be submitted and bid prices shall be offered and the criteria on which alternative bids shall be evaluated. A separate bid security shall be required with an alternative bid if allowed by the procuring agency.

No change.

Sub-rules (3) and (4) are proposed to clarify acceptance or rejection of conditional, multiple and alternative bids. Alternative bids can be considered by the procuring agencies in Rule 36 (c) and (d).

23. Bidding documents

(1) Procuring agencies shall formulate precise and unambiguous bidding documents Standard Bidding Documents (SBDs) that shall be made available to the bidders immediately after the from the date of publication of the invitation to bid Invitation For Bid (IFB).

(2) For competitive bidding, whether open or limited, the bidding documents shall include the following sections, namely:-

(a) invitation to bid Invitation For Bid (IFB) ; (b) instructions to bidders Instructions To Bidders (ITB);(c) form of bid;

To clarify that the bidding documents shall be provided from the date of publication of tender notice amendment has been proposed in rule 23(1).

To cover “Blacklisting manner and mechanism” in bidding documents provision at “la” is added.

SBDs and IFB are standard terminology for the procurement documents may be used to comply with FIDIC’s global contracting templates accepted by PEC.

These sections are globally prescribed sections based on of FIDIC templates

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(d) form of contract; (e) (c ) general General Conditions of Contract (GCC) or special conditions of contract;(d) Bid Data Sheet (BDS)(e) Special Conditions of Contract (SCC);(h) specifications and drawings or performance criteria (where applicable);(i) list of goods or bill of quantities (where applicable);(h) (f) delivery time or completion schedule;(i) (h) qualification criteria (where applicable); (j) (i ) bid evaluation criteria;(k) (j) form of bid; (k) form of contract; (l) format of all securities required (where applicable);(l) (m) details of standards (if any) that are to be used in assessing the quality of goods, works or services specified; and

(la) (na) manner of blacklisting and mechanism; and (m) any other detail not inconsistent with these rules that the procuring agency may deem necessary.

(3) Any information, that becomes necessary for bidding or for bid evaluation, after the invitation to bid Invitation For Bid (IFB) or issue of the bidding documents Standard Bidding Documents (SBDs) to the prospective bidders, shall be provided in a timely manner and on equal opportunity basis. Where notification of such change, addition, modification or deletion becomes essential, such notification shall be made in a manner similar to the original advertisement.

(4) Procuring agencies shall use standard bidding documents Standard Bidding Documents as and when notified by regulation by the Authority:

which are used in Standard Bidding Documents adopted by the PEC as well.

Pakistan Engineering Council

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Provided that bidding documents Standard Bidding Documents already in use of procuring agencies may be retained in their respective usage to the extent they are not inconsistent with these rules, and till such time that the standard bidding documents Standard Bidding Documents (SBDs) are specified by regulations.

(5) The procuring agency shall provide a set of bidding documents Standard Bidding Documents (SBDs) to any supplier or contractor, on request and subject to payment of price, if any.

Explanation.- For the purpose of this sub-rule price means the cost of printing and providing the documents only.

(PEC) has already specified the proprietary FIDIC templates for the Standard Bidding Documents to be used by all public sector organizations vide P&D Notification June 2007, and which are available on PEC’s website.

The public sector Procuring agencies are required to issue only the Standard Bidding Documents, fine-tuned to their requirements.

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24. Reservations and domestic preference.-

(1) Procuring agencies shall allow all prospective bidders to participate in procuring procurement procedure without regard to nationality, except in cases in which any procuring agency decides to limit such participation to national bidders only or prohibit participation of bidders of some nationalities, in accordance with the policy of Federal Government.

(2) Procuring agencies shall allow for a preference to domestic or national suppliers or contractors in accordance with the policies of the Federal Government. The magnitude of price preference to be accorded shall be clearly mentioned in the bidding documents Standard Bidding Documents (SBDs) under the bid evaluation criteria.

In sub-rule (1), the word “Procurement” shall be substituted for the word “procuring”.

25. Bid Security.-

(1) The procuring agency may require the bidders to furnish a bid security not exceeding by giving a percentage ranging between 2% to 5% of the bid price, or may require a fixed amount based on an undisclosed percentage not exceeding 5% of the budget estimate. The bid security shall be submitted in the widely accepted form of a readily encashable financial instrument or an unconditional bank guarantee along with technical bid/ proposal. In case where no separate technical bid/ proposal is required it shall be attached with financial bid/ proposal.

(2) The bid security of technically non-responsive bidders shall be returned within 30 days of declaration of their bid as non-responsive.

The existing rule will be numbered as sub-rule (1). New additions shall be numbered as sub-rules -2, 3 & 4.

In sub-rule (1) the nature of bid security has been changed from upto 5% of the bid price to a fixed amount of upto 5% of the estimated budget. A

Scenario-1: Bid Security ranging from 2-5% of Bid Price:

In the absence of an Engineering Estimate or a budget Estimate being kept confidential, the bidder tends to give a competitive price keeping in view the unknown competition offered by other bidders. Client gets

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(3) Bid security of responsive bidders shall be retained by the procuring agency till the time the procurement contract has been signed with the lowest evaluated bidder and deposit of performance guarantee security in the form of a bank guarantee if required. Bid security of the successful bidder shall be returned to the successful bidder within seven days of his submission of Performance Security by. Bid security of unsuccessful bidders at this stage shall not be retained beyond 30 days of award of contract.(4) Bid security shall be forfeited in following circumstances if the bidder;

a. withdraws its bid after opening but within the validity period.

b. does not furnish performance security guarantee , if applicable.

c. does not sign the contract.

d. does not accept the correction of the quoted amount following the correction of arithmetic errors.

(5) Once Performance Security is submitted by the successful bidder, his bid security shall be returned within seven days of his furnishing an application to the Procuring agency for release of the same.

fixed amount will do away with the apprehension of bid price being revealed before opening of financial proposal as it could be worked back to find the financial bid. Also the original rule indicates the ceiling for bid security but is completely silent about the mechanism and conditions under which the bid security can be forfeited; moreover, there should be some timeline within which the bid security of unsuccessful bidders must be returned.

more economical and competitive bid prices. This wisdom is frequently followed in the international contracting community. Knowing the bid price by working back the bid security amount based on %age of bid price may only be of some significance to a bidder in Two-Stage Two Envelop bidding process. In all other three processes, any such revelation becomes useless for both the bidder s and the client after submission of bid.

Scenario-2: Bid Security of a fixed amount based on 2-5% of Budget Estimate: The Most often, Engineering Estimates (EE) are kept confidential to as per international best practices. If Budget estimates are revealed to bidders, all the bidders may jack-up their bid prices to give their bid prices near to the said estimate and hence the competitive edge in bid price diminishes. The

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Budget estimate should therefore be kept undisclosed and a fixed monetary amount based on a %age not exceeding %5 may be intimated to the bidder

However, it may be kept as an option for the client to have flexibility in some cases.

26. Bid validity.

(1) A procuring agency, keeping in view the nature of the procurement, shall subject the bid to a bid validity period.

(2) Bids shall be valid from last date for submission of bids for the period of time specified in the bidding document.

(3) The procuring agency shall ordinarily be under an obligation to process and evaluate the bid within the stipulated bid validity period. However under exceptional circumstances and for reason to be recorded in writing, if an extension is considered necessary, only one extension shall be allowed. In such case all those who have submitted their bids shall be asked to extend their respective bid validity period. Such extension shall be for not more than the period equal to the period of the original bid validity.

(4) Bidders who,-

(a) agree to extension of their bid validity period shall also extend the validity of the bid bond or security for the extended period of the bid validity;

Under sub-rule (2) date & time is clarified from which bid validity will be started. The existing sub-rule (3) was not clear about number of extension(s) in bid validity period. The rule 26 is also silent on validity of bid where the procurement process is stalled or held in abeyance because of court proceedings. A new sub-rule 5 has been added to address this eventuality. Sub-rule (4) now also clarifies the process if the bid validity is expired before award of contract.

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(b) agree to the procuring agency’s request for extension of bid validity period shall not be permitted to change the substance of their bids; and

(c) do not agree to an extension of the bid validity period shall be allowed to withdraw their bids without forfeiture of their bid bonds or securities.

(d) after expiry of bid validity period i.e. original as well as extended, the procuring agency shall advertise fresh tender, in case contract is not awarded.

(5) Where a procurement process is held in abeyance because of court proceedings, the bidders will be given the option for extension in the validity period of bids when the said case is decided. Those who will opt not to extend the bid validity period shall be allowed to withdraw without forfeiture of the bid security.

The sub-rules(4)(d), 5 shall be added in the existing rule.

This is a very good suggestion.

27 (A) Pre-Bid / Pre-Proposal Conference(New Addition)

(1) At a date specified in the publication of an advertisement or notice / Invitation For Bid (IFB) and in the Standard Bidding Documents, the procuring agency may hold one or more pre-bid/pre-proposal conferences. The purpose of the Pre-bid/Pre-proposal conference is to allow potential bidders, before bid/proposal submission, to ask questions and request clarifications to improve their understanding of client’s requirements, industry capabilities and any aspect of the Standard Bidding Documents. The procuring agency may also brief the potential bidders to submit responsive bids complete in all respect in order to achieve efficiency in the process.

(2) The pre-bid/pre-proposal conference may be held early and not later than seven days after the availability of the Standard Bidding Documents in the case of National

No change. One of the most important aspect of procurement management is holding a pre-bid/pre-proposal conference, which unfortunately has been badly neglected in the rules. A pre-bid conference significantly increases the prospects and chances of getting responsive and technically qualifiable bids/proposals.

It has been internationally

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Competitive Bidding (NCB) and no later than fifteen days in the case of International Competitive Bidding (ICB)

(3) Any amendment or modification to the Standard Bidding Documents, or procuring agency’s clarification to the queries based on suggestions and comments from potential bidders, shall be published/hosted as an addendum alongwith pre-bid/pre-proposal minutes of meeting on procuring agency’s website and also circulated among all the bidders present during the said conference.

(4) Not less than five working days shall be given to the potential bidders to incorporate any changes and prepare their bids/proposals once all such amendments, modifications or clarifications have been disseminated to all such bidders.

(5) Any exchange of information must be consistent with procurement integrity requirements.

acknowledged that the difference between and a good and bad procurement activity is the pre-bid conference. Therefore this rule may be inserted in an elaborate form.

Extension of time for submission of bids.

Where a procuring agency has already prescribed a deadline for the submission of bids and due to any reason, including any incorporation of amendment(s) in or modification(s) of the Standard Bidding Documents, or clarification(s), arising out the pre-bid/pre-proposal conference(s), the procuring agency finds it necessary to extend such deadline, it shall do so only after recording its reasons in writing and in an equal opportunity manner. Advertisement of such extension in time shall be done in a manner similar to the original advertisement.

The proposed amendment has been made owing to the insertion of the provision of a pre-bid /pre-proposal conference which is one of the most frequent causes of extension of time for bid / proposal submission

28. Opening of bids

(1) The date for opening of bids and the last date for the submission of bids shall be the same. Bids shall be opened at the time specified in the bidding documents. The bids shall be opened at least thirty minutes after the deadline for

No change.

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submission of bids.

(2) All bids shall be opened publicly in the presence of the bidders or their representatives who may choose to be present, at the time and place announced prior to the bidding. The procuring agency shall read aloud the unit price as well as the bid amount and shall record the minutes of the bid opening. All bidders in attendance shall sign an attendance sheet. All bids submitted after the time prescribed shall be rejected treated non-responsive and returned without being opened.

Rejection is a process wherein the bids are either returned before bid submission, or, are returned any time before selection of the bid.

As bids received after the prescribed bid submission period do not conform to the conditions of the IFB, these are deemed non-responsive and are returned unopened. Therefore the words “non-responsive” would be more appropriate.

29. Evaluation criteria

Procuring agencies shall formulate an appropriate and unambiguous evaluation criterion criteria listing all the relevant information against which a bid is to be evaluated. Such evaluation criteria shall form an integral part of the bidding documents. Failure to provide for an unambiguous evaluation criteria in the bidding documents Standard Bidding Documents shall amount to mis-procurement. Firm qualification criteria shall be treated as part of the bid evaluation criteria in post-qualification.

Amendments have been proposed to further make the rule clear.

In certain instances in post-qualification, procuring agencies are using firm qualification criteria to first filter the firms to select a few which are then further technically and financially evaluated. This is a feature of pre-qualification only.

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30. Evaluation of bids.

(1) All bids shall be evaluated in accordance with the evaluation criteria and other terms and conditions set forth in the prescribed bidding documents Standard Bidding Documents .

Save as provided for in sub-clause (iv) of clause (c) of rule 36 no evaluation criteria shall be used for evaluation of bids that had not been specified in the bidding documents Standard Bidding Documents .

(2) For the purposes of comparison of bids quoted in different currencies, the price shall be converted into a single currency specified in the bidding documents Standard Bidding Documents . The rate of exchange shall be the selling rate, prevailing on the date of opening of bids specified in the bidding documents Standard Bidding Documents, as notified by the State Bank of Pakistan on that day.

(3) A bid once opened in accordance with the prescribed procedure shall be subject to only those rules, regulations and policies that are in force at the time of issue of notice for invitation of bids Invitation For Bids .

No change.

31. Clarification of bids

(1) No bidder shall be allowed to alter or modify his bid after the bids have been opened. However the procuring agency may seek and accept clarifications to the bid that do not change the substance of the bid.

(2) Any request for clarification in the bid, made by the procuring agency shall invariably be in writing. The response to such request shall also be in writing.

No change.

32. Discriminatory and difficult conditions

Save as otherwise provided, no procuring agency shall introduce any condition, which discriminates between bidders or that is considered to be met with difficulty. In ascertaining the discriminatory or difficult nature of any condition

No change.

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reference shall be made to the ordinary practices of that trade, manufacturing, construction business or service to which that particular procurement is related.

33. Rejection of bids

(1) The procuring agency may reject all bids or proposals at any time prior to the acceptance opening or selection of a bid or proposal. The procuring agency shall upon request communicate to any supplier or contractor who submitted a bid or proposal, the grounds for its rejection of all bids or proposals, but is not required to justify those grounds.

(2) The procuring agency shall incur no liability, solely by virtue of its invoking sub-rule (1) towards suppliers or contractors who have submitted bids or proposals.

(3) Notice of the rejection of all bids or proposals shall be given promptly to all suppliers or contractors that submitted bids or proposals.

The word “its” have been deleted in sub-rule (1).

The word “acceptance” has vague meaning, which may create legal complications. Instead, the words “opening” and “selection” of a bid refer to the two legal processes utilized in procurement management which can be interrupted by the procuring agency through rejection of the whole process.

34. Re-bidding (1) If the procuring agency has rejected all bids under rule 33 it may call for a re-bidding.

(2) The procuring agency before invitation for re-bidding shall assess the reasons for rejection and may revise specifications, evaluation criteria or any other condition for bidders as it may deem necessary.

No change.

35 Announcement of evaluation reports

(1) Procuring agencies shall announce and upload on Authority’s web the results of bid evaluation in the form of a report giving justification for acceptance selection of lowest

New proviso has been added under sub-rule (1) and new sub-rule 2 has

Again the word “acceptance” does not connote to a particular process in

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evaluated responsive bid or the Most Economically Advantageous Bid , and reasons for non-acceptance dis- qualification of all other bids or rejection of bids each bid at least ten days prior to the award of procurement contract.

“Provided that a copy of the evaluation report shall be provided to any bidder who may request for the same.

(2)The contract can be awarded earlier than ten days by the procuring agency provided that the bidders confirm in writing that they do not have any reservation on the evaluation report.

(3) Any bidder, who feels aggrieved on the outcome of the technical or final evaluation, may choose to approach the Grievance Redressal Committee in the manner as stated under rule 48.

been inserted to award the contract earlier than 10 days subject to the condition that all the qualified bidders have no objection to the evaluation process.

procurement management. It may be replaced with the word ‘selection” which has its legal counterparts in the form of words ‘disqualification.”

36. Procedures of open competitive bidding

Save as otherwise provided in these rules the following procedures shall be permissible for open competitive bidding, namely:-

(a) Single stage – one envelope procedure

Each bid shall comprise one single envelope containing, separately, financial bid/proposal and technical bid/proposal (if any). All bids received shall be opened and evaluated in the manner prescribed in the bidding document.

(b) Single stage – two envelope procedure

(i) The bid shall comprise a single package containing two separate envelopes. Each envelope shall contain separately the financial bid/proposal and the technical bid/proposal;

(ii) the envelopes shall be marked as “FINANCIAL

The words “so as to ensure that the contract may be awarded within bid validity period” have been added in sub-Rule 36(b)(viii). This amendment has been proposed to emphasis procuring agencies to award the contract within bid validity period.

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BID/PROPOSAL” and “TECHNICAL BID/PROPOSAL” in bold and legible letters to avoid confusion;

(iii) initially, only the envelope marked “TECHNICAL BID/PROPOSAL” shall be opened;

(iv) the envelope marked as “FINANCIAL BID/PROPOSAL” shall be retained in the custody of the procuring agency without being opened;

(v) the procuring agency shall evaluate the technical bid/proposal in a manner prescribed in advance, without reference to the price and reject any bid/proposal which does not conform to the specified requirements;

(vi) during the technical evaluation no amendments in the technical bid/proposal shall be permitted;

(vii) the financial bids/proposals of bids shall be opened publicly at a time, date and venue announced and communicated to the bidders.

(viii) after the evaluation and approval of the technical bid/proposal the procuring agency, shall at a time within the bid validity period, publicly open the financial bids/proposals of the technically accepted bids/proposals so as to ensure that the contract may be awarded within bid /proposal validity period. The financial bid/proposal of bids found technically nonresponsive non-qualified/dis-qualified shall be returned un-opened to the respective bidders; and

(ix) the bid/proposal found to be the lowest evaluated bid or the Most Economically Advantageous Bid shall be accepted.

(c) Two stage bidding procedure

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First stage

(i) the bidders shall first submit, according to the required specifications, a technical proposal without price;

(ii) the technical proposal shall be evaluated in accordance with the specified evaluation criteria and may be discussed with the bidders regarding any deficiencies and unsatisfactory technical features;(iii) after such discussions, all the bidders shall be permitted to revise their respective technical proposals to meet the requirements of the procuring agency;

(iv) the procuring agency may revise, delete, modify or add any aspect of the technical requirements, firm qualification or evaluation criteria, or it may add new requirements or criteria not inconsistent with these rules:

Provided that such revisions, deletions, modifications or additions are communicated to all the bidders equally at the time of invitation to submit final bids proposals, and that sufficient time is allowed to the bidders to prepare their revised bids proposals :

Provided further that such allowance of time shall not be less than fifteen days in the case of national competitive bidding National Competitive Bidding (NCB) and thirty days in the case of international competitive bidding International Competitive Bidding (ICB) ;

(v) those bidders not willing to conform their respective bids proposals to the procuring agency’s technical requirements may be allowed to withdraw from the bidding without forfeiture of their bid security;

Two Stage bidding and Two stage Two Envelop bidding are the mechanisms wherein conceptual work and R&D gets involved and the acquisition revolves around a proposed solution. Therefore the word “proposal” may be solely used.

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Second stage

(vi) the bidders, whose technical proposals or bids have not been rejected and who are willing to conform their bids proposals to the revised technical requirements of the procuring agency, shall be invited to submit a revised technical proposal along with the financial proposal;

(vii) the revised technical proposal and the financial proposal shall be opened at a time, date and venue announced and communicated to the bidders in advance; and

(viii) the revised technical proposal and the financial proposal shall be evaluated in the manner prescribed above. The bid proposal found to be the lowest evaluated proposal /bid or the Most Economically Advantageous proposal shall be accepted:

Provided that in setting the date for the submission of the revised technical proposal and financial proposal a procuring agency shall allow sufficient time not less than fifteen days in the case of National Competitive Bidding (NCB) and thirty days in the case of International Competitive Bidding (ICB) to the bidders to incorporate the agreed upon changes in the technical proposal and prepare their financial proposals accordingly.

(d) Two stage - two envelope bidding procedure.-

First stage

(i) the bid proposal shall comprise a single package containing two separate envelopes. Each envelope shall contain separately the financial proposal and the technical proposal;

Prescribing the minimum limit of sufficient time would tend to preserve the integrity of the process.

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(ii) the envelopes shall be marked as “FINANCIAL PROPOSAL” and “TECHNICAL PROPOSAL” in bold and legible letters to avoid confusion;

(iii) initially, only the envelope marked TECHNICAL PROPOSAL” shall be opened; (iv) the envelope marked as “FINANCIAL PROPOSAL” shall be retained in the custody of the procuring agency without being opened;

(v) the technical proposal shall be discussed with the bidders with reference to the procuring agency’s technical requirements;

(vi) those bidders willing to meet the requirements of the procuring agency shall be allowed to revise their technical proposals following these discussions;

(vii) bidders not willing to conform their technical proposal to the revised requirements of the procuring agency shall be allowed to withdraw their respective bids proposal without forfeiture of their bid security;

Second Stage

(viii) after agreement between the procuring agency and the bidders on the technical requirements, bidders who are willing to conform to the revised technical specifications and whose bids proposal have not already been rejected shall submit a revised technical proposal and supplementary financial proposal, according to the technical requirement;

(ix) the revised technical proposal along with the original financial proposal and supplementary financial proposal shall be opened at a date, time and venue announced in advance by the procuring agency:

The supplementary financial proposal gives

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Provided that in setting the date for the submission of the revised technical proposal and supplementary price financial proposal a procuring agency shall allow sufficient time not less than fifteen days in the case of National Competitive Bidding (NCB) and thirty days in the case of International Competitive Bidding (ICB) to the bidders to incorporate the agreed upon changes in the technical proposal and to prepare the required supplementary financial proposal; and

(x) the procuring agency shall evaluate the whole proposal in accordance with the evaluation criteria and the bid proposal found to be the lowest evaluated bid or Most Economically Advantageous shall be accepted.

the proposal price based on addition or reduction or any modification of the activity’s scope. There is no use of opening the original financial proposal as it is not used in the evaluation process for combined evaluation of the proposal.

37. Conditions for use of single stage two envelope, two stage and two stage two envelope bidding procedures.-

Single stage one envelope bidding procedure shall ordinarily be the main open competitive bidding procedure used for most of the procurement. Other appropriate procedures of open competitive bidding shall be selected in the following circumstances, namely:-

(a) single stage two envelope bidding procedure shall be used where the bids are to be evaluated on technical and financial grounds and price is taken into account after technical evaluation;

(b) two stage bidding procedure shall be adopted in large and complex contracts where technically unequal proposals are likely to be encountered or where the procuring agency is aware of its options in the market but, for a given set of performance requirements, there are two or more equally acceptable technical solutions available to the procuring agency; and

(c) two stage two envelope bidding method shall be used for procurement where alternative technical proposals are possible, such as certain type of machinery or equipment or manufacturing plant.

No change.

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38. Acceptance of bids.-

(1) The bidder with the lowest evaluated or Most Economically Advantageous bid, if not in conflict with any other law, rules, regulations or policy of the Federal Government, shall be awarded the procurement contract, within the original or extended period of bid validity.

(2) Single bid may be considered for acceptance if it meets the evaluation criteria expressed in bidding documents the Standard Bidding Documents and is not in conflict with any other rules, regulations or policy of the Federal Government. The price may be compared with the prevailing market prices, if so required. (3) In case of forfeiture of bid security under Rule 25(4) the procuring agency may award the procurement contract to next lowest evaluated bidder.

The existing rule shall be numbered as sub-rule (1) and new sub-rules 2 & 3 are added.

Sub-rule 2 explains the procedure in case a procuring agency receives single bid after adopting to open competition. Sub-rule (3) explains the procedure to award contract to next ranked bidder.

39. Performance guarantee.

Where needed and clearly expressed in the bidding documents, the procuring agency shall require the successful bidder to furnish a performance guarantee security which shall not exceed be less than ten per cent of the contract amount. The performance guarantee shall be released within sixty days of completion of the contract subject to clearance of everything.

In the existing rule at the end a new sentence relating to return of performance guarantee within reasonable time has been added.

Performance Security is a document which relates to post-completion coverage of the warranty or defects liability period. It may be in the form of a Bank Guarantee or any other readily encashable /enforceable instrument. Using the word “Guarantee” in rules may restrict the usage of the instrument.

In case of “forced” or “unbalanced” bid, the procuring agency has the right to enhance the Performance security to mitigate the

36

contractual risk related to activity completion. The rule should not restrict the procuring agency to enhance the said security.

40. Limitation on negotiations.

Save as otherwise provided, there shall be no negotiations with the bidder having submitted the lowest evaluated bid or Most Economically Advantageous bid with any other bidder:

Provided that the extent of negotiation permissible shall be subject to the regulations issued by the Authority.

No change.

41. Confidentiality

(1) The procuring agency shall keep all information regarding the bid evaluation confidential until the time of the announcement of the evaluation report in accordance with the requirements of rule 35.

(2) PPRA Rules 2004 shall prevail over Pakistan Right to Information Act, 2013, regarding confidentiality of the bid evaluation process till the announcement of final evaluation results by the procuring agency.

No change. Section 2(j)(v)(a) of the Pakistan Right to Information Act, 2013, provides exemption to the procuring agency from giving public access to the information regarding on-going bid evaluation process. However, various federal entities have improperly started asking for information regarding on-going bid evaluation process under Section 3(i) of the said Act. The Law Division usually interprets in favour of the information-requisitioning entities when approached. This is a non-professional trend as any bidder, after getting such

37

information, instead of resorting to Complain Redressal Committee, may try to stall the bid process through interim stay by the courts before the conclusion of combined evaluation of the on-going procurement process.

It is imperative that PPRA Rules 2004 should prevail as a primary procurement regulation over the Access to Information Act 2014 which deems to be a secondary regulation on public procurement so that access to bid evaluation information is only provided when the said process gets completed and the final bid evaluation result is announced/uploaded by the procuring agency.

42. Alternative methods of procurements.

(1) A procuring agency may utilize the following alternative methods of procurement of goods, services and works, namely:-

(a) petty purchases.- Procuring agencies may provide for petty purchases where the object of the procurement is below upto the financial limit of twenty five fifty thousand rupees. Such procurement shall be exempt from the requirements of bidding or quotation of

The existing rule is numbered as sub-rule (1) and a new sub-rule (2) is added for the mandatory documents under sub-rule 42(1)(c) & (d).

The ceilings for

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prices:

Provided that the procuring agencies shall ensure that procurement of petty purchases is in conformity with the principles of procurement prescribed in rule 4:

Provided further that procuring agencies convinced of the inadequacy of the financial limit prescribed for petty purchases in undertaking their respective operations may approach the Federal Government for enhancement of the same with full and proper justifications.

(b) request for quotations. Quotation of prices: - A procuring agency shall engage in this method of procurement only if the following conditions exist,(i) the cost price of object of procurement is more than fifty below the prescribed limit of one hundred thousand rupees but is less than or equal to the prescribed limit of two hundred thousand rupees:

Provided that the respective Boards of Autonomous bodies are authorized to fix an appropriate limit for request for quotations quotation of prices method of procurement subject to a maximum of rupees five hundred thousand which will become financial limit under this sub-rule .”

(ii) the object of the procurement has standard specifications;

(iii) minimum of three quotations have been obtained; and

(iv) the object of the procurement is purchased from the supplier offering the lowest price:

Provided that procuring agencies convinced of the inadequacy of the financial limit prescribed for request for quotations in undertaking their respective operations may approach the

different procurement methods need to be revised and made realistic in comparison with the level of input, time and effort required to go for competitive bidding. Accordingly changes have been made in rule 42(a) and (b).

In order to make the procedure more systematic and transparent new provision at rule 42(b)(v) is added.

In rule 42(c), sub-rules (ii), (iii) and (v) have been deleted and shifted to rule 42(d). The reason is that these provisions relates to a method where negotiated tendering is more suitable. In addition, the provision of repeat orders at rule 42(c)(iv) has been revised.

Provision for Force Account has been added as one of the alternate method of procurement. Inclusion of this as sub-

Rule 42(a) mentions the name of the activity “Quotation for prices”. The same name may be used at rule 42(b). The name “Request For Quotation (RFQ)” may be used for the legal document wherein quotations exceeding Rs 200,000/- are submitted. RFQ document should be at par with the RFP document.

39

Federal Government for enhancement of the same with full and proper justifications;

(v) Requests for quotations Quotation of prices shall be in writing, duly signed by the designated authority, and shall be dispatched/ posted through fax, courier or email and record of such correspondence shall be maintained. The method for submission of quotations shall be clearly mentioned in the requests Invitation for quotations of prices . Evaluation of quotations shall be carried out by the procuring agency on the basis of criteria formulated before the issuance of requests for quotations Invitation for quotations of prices .

c) direct contractingA procuring agency shall only engage in direct contracting if one or more of the following conditions exist, namely

(i) the procurement concerns the acquisition of spare parts or supplementary services from original manufacturer or supplier:

Provided that the same are not available from alternative sources;

(ii) Deleted from here and added in Rule 42(d)(iv).

(iii) Deleted from here and added in Rule 42(d)(v).

(iv) repeat orders not exceeding fifteen per cent of the original procurement of same goods and same services; and for works, variation by increase or decrease, omission, change, addition, alteration, deletion or amendment which when taken together are not in excess of fifteen per cent of the contract price.

rule 42 (e) will help the procuring agencies to cope with the situations, where procuring agencies feel that either the bidders / service providers are reluctant to undertake some work owing to its volume, nature, timeline or it feels that it could substantially save on time and resources by undertaking the activity itself.

The term “designated authority” may be adequately defined in the Definitions section of the rules to clarify any confusion of the bidders.

40

(v) Deleted from here and added in Rule 42(d)(vi).

(vi) when the price of goods, services or works is fixed by the government or any other authority, agency or body duly authorized by the Government, on its behalf, and

(vii) for purchase of motor vehicle(s) from local original manufacturers or their authorized agents at manufacturer’s price. In case a procuring agency is outside Pakistan local mean the country where a procuring agency is located.

(d) negotiated tendering

A procuring agency may engage in negotiated tendering with one or more suppliers or contractors with or without prior publication of a procurement notification. This procedure method shall only be used when one or more of the following conditions exist;-

(i) the supplies involved are manufactured purely for the purpose of supporting a specific piece of research or an experiment, a study or a particular development;

(ii) for technical or artistic reasons, or for a design contest, or for reasons connected with protection of exclusive rights or intellectual property, the supplies may be manufactured or delivered only by a particular supplier;

(iii) for reasons of extreme urgency brought about by events unforeseeable by the procuring agency, the time limits laid down for open and limited bidding methods cannot be met. The circumstances invoked to justify extreme urgency must not be attributable to the procuring agency:

(iv) only one manufacturer or supplier exists for the required procurement:

(ii) Deleted from Rule 42(c)(ii) and added as Rule 42(d)(iv).

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Provided that the procuring agencies shall specify the appropriate fora, which may authorize procurement of proprietary object after due diligence;

(v) where a change of supplier would oblige the procuring agency to acquire material having different technical specifications or characteristics and would result in incompatibility or disproportionate technical difficulties in operation and maintenance:

Provided that the contract or contracts do not exceed three years in duration;

(vi) in case of an emergency:

Provided that the procuring agencies shall specify appropriate fora vested with necessary authority to declare an emergency;

Provided that any procuring agency desirous of using negotiated tendering as a method of procurement shall record its reasons and justifications in writing for resorting to negotiated tendering and shall place the same on record.

(e) Entering into Force Account

A procuring agency may enter into Force Account for works if one or more of the following conditions exist;

(i) quantities of work to be done cannot be defined in advance;

(ii) works are small and scattered or in remote locations for which qualified construction firm(s) is unlikely to bid at reasonable prices;

(iii) Deleted from Rule 42(c)(iii) and added as Rule 42(d)(v).

(v) Deleted from Rule 42(c)(v) and added as Rule 42(d)(vi).

The principal Accounting officer of a procuring agency may be vested with the powers to declare an emergency. Specifying each time an appropriate forum for varied sorts of emergencies and getting approvals from it at the spur of the moment would defeat the very purpose of tackling with emergencies of immediate nature.

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(iii) works are required to be carried out without disrupting ongoing operations;

(iv)in case of emergency ;

Provided that the procuring agencies shall specify appropriate fora vested with necessary authority to declare an emergency;

2. For the procurements under Rule 42 (c) and (d), the procuring agency shall provide bidding documents Standard Bidding Documents to the prospective contractor or supplier, who shall be asked to submit his best technical and financial bids within reasonable time. The procuring agency shall require to follow the provisions of Rules 29, 30, 33 & 34 before award of contract. Rules 39, 43, 44, 45, 46, 47 & 49 will also be applicable.

43. On account payments

All procuring agencies shall make prompt payments to suppliers and contractors against their invoices or running bills within the time given in the conditions of the contract, which shall not exceed thirty days.

No change. When the payment bill is deposited with the AG/District Accounts Officer, it gets processed forpayment to the firm by AGPR. The expenditure is presently booked in the PIFRA System. The statedinformation is reconciled and sent back to the AGPR for finalization of appropriation to accounts.The said process is further extended for reconciliation and

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appropriation of running and final billpayments into suppliers’ accounts and indicates the completion of major contracts by PIFRA.However, giving a complete picture on the project sign-off or closure remains out of scope of thisfinancial management system in the absence of any Materials Management Module in theprocurement system of the procuring agencies. This therefore delays payments beyond 30 days of payment invoice submission by the contractor and leads to violation of the PPRA Rules.

Therefore before committing to this time period of 30 days, PIFRA stakeholders may be consulted to check the actual time needed for invoice payments nowadays.

43(A) Liquidated Damages

In the event a contractor fails to deliver any or all of the goods, works or services within the period agreed in the contract, the procuring agency either shall allow an extension in the contract period pursuant to a written request by the contractor with justifications or deduct the amount, as liquidated damages, a sum equivalent to the

This is a new rule added as this provision is part of procurement rules/ guidelines of almost all the international organizations and it

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percentage specified in the contract for each week or part thereof of delay.

helps the PAs to make it binding for the contractor to comply with the agreed contractual obligations.

43(B) Fine & Penalties(New Addition)

In the event a contractor fails to deliver any or all of the goods, works or services within the period agreed in the contract, the procuring agency, may, alongwith deduction of Liquidated damages, impose fine or penalty of an amount specified in the contract.

The rules do not provide for imposition of fine as token punishment. A new rule may be added to give an option to the procuring agency to impose any fixed amount of fine alongwith liquidated damages.

44. Entry into force of the procurement contract

A procurement contract shall come into force,-

(a) where no formal signing of a contract is required, from the date the notice of the acceptance of the bid or purchase order has been given to the bidder whose bid has been accepted. Such notice of acceptance or purchase order shall be issued within a reasonable time; or(b) where the procuring agency requires signing of a written contract, from the date on which the signatures of both the procuring agency and the successful bidder are affixed to the written contract. Such affixing of signatures shall take place within a reasonable time:

Provided that where the coming into force of a contract is contingent upon fulfillment of a certain condition or conditions, the contract shall take effect from the date whereon such fulfillment takes place.

No change.

45. Closing of contract.-

(1) Except for defect liability or maintenance by the supplier or contractor, as specified in the conditions of contract, performance of the contract shall be deemed close on the

No change. It has been observed that many public sector

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issue of a final over-all delivery certificate, or final taking over certificate or a final acceptance certificate which shall be issued within thirty days of final taking over of goods or receiving the deliverables or completion of works enabling the supplier or contractor to submit final bill and the auditors to do substantial audit.

(2) In case of defect liability or maintenance period, defect liability certificate shall be issued within thirty days of the expiry of the said period enabling the supplier or contractor to submit the final bill. Except for unsettled claims, which shall be resolved through arbitration, the bill shall be paid within the time given in the conditions of contract, which shall not exceed sixty days to close the contract for final audit.

entities / executing agencies issue provisional completion certificates which create problems for initiating processing of final bill payments and initiation of audit. No provisional completion or delivery certificates should be allowed.

46. Record of procurement proceedings.

(1) All procuring agencies shall maintain a record of their respective procurement proceedings along with all associated documentation for a minimum period of five ten years and may be archived and record related to real estate, machinery and equipments may be maintained as permanent.

(2) Such maintenance of record shall be subject to the regulations framed in this regard from time to time.

No change.

47. Public access and transparency.-

As soon as a final bid evaluation result is announced/uploaded by the procuring agency or a contract has been awarded the procuring agency shall make information all documents related to the evaluation of the bid and award of contract public on the website of the Authority and its own web, if available on format specified through regulations.

Provided that where the disclosure of any information related to the award of a contract is of proprietary nature or where the

The proposed amendment being a more firm method for public access to all the signed contracts.

The proposed amendment highlighted in red makes rule 47 consistent with rule 41 which states that final bid evaluation result is announced/uploaded by the procuring agency

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procuring agency is convinced that such disclosure shall be against the public interest, it can withhold only such information from public disclosure subject to the prior approval of the Authority.

48. Redressal of grievances by the procuring agency.-

(1) The procuring agency shall constitute a committee comprising of odd number of persons, with proper powers and authorizations, to address the complaints of bidders that may occur prior to the entry into force of the procurement contract.

(2) Any bidder feeling aggrieved by any act of the procuring agency after the submission of his bid may lodge a written complaint concerning his grievances not later than fifteen within ten days after the announcement of the technical bid evaluation report or final bid evaluation report as the case may be. bid evaluation report under rule 35.

(3) The committee shall investigate and decide upon the complaint within fifteen days of the receipt of the complaint.

(4) Mere fact of lodging of a complaint shall not warrant suspension of the procurement process.

(5) Any bidder not satisfied with the decision of the committee / review committee of the procuring agency may lodge an appeal in the relevant court of jurisdiction.

(6). Appeal to the Review Committee:

(1) A bidder not satisfied with decision of the procuring agency’s complaints redressal committee may lodge an appeal to the Review Committee;

Provided that he has not withdrawn the bid security, if any, deposited by him.

(2) The Review Committee shall comprise the

The existing sub-rule 2 has been amended and new sub-rules 6-9 have been proposed for addition.

In sub-rule (2), the number of days within which the complaint could be filed has been changed to ten days to make it consistent with Rule 35.

Present rule on redressal of grievances, only provides for a single tier of grievance redressal. This redressal is done by officials of the Procuring Agency where original decision on procurements is made, though with a different set of officials.

International best practices indicate presence of a second tier system as well. Through proposed revision, effort has been made to

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following:

(a) Managing Director (PPRA) or his nominee;

(b) Director General Federal Audit or his nominee not below the rank of BS-19;

(c) A private member represented on the PPRA Board.

(d) An independent professional having expertise of relevant field concerning the procurement in question, if required.

(3) The Managing Director or his nominee as the case may be shall be the Chairperson of the Review Committee and the private members shall be selected by the PPRA Board for a period not exceeding two years;

(4) The independent professional shall be nominated by the Managing Director for each reference and paid remuneration for attending the meeting of Review Committee at a rate prescribed by the Authority from time to time;

(5) The bidder shall submit following documents to the Review Committee:-

a. a letter stating his request to appeal to the Review Committee and the nature of complaint;

b. a copy of the complaint earlier submitted to the complaint redressal committee of the procuring agency alongwith all supporting documents;

c. copy of the decision of Complaint Redressal Committee.

(6) On receipt of appeal, the Chairperson shall convene a meeting of the Review Committee within

introduce a second tier of grievance redressal.

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seven working days;

(7) Unless the Review Committee recommends dismissal of an appeal being frivolous, in which case the bidder may lose the bid security deposited with the procuring agency, the Review Committee may: –

a. reject the reference, stating its reason;

b. state the rules or principles that govern the subject matter of the reference;

c. point out the infirmities and breach of rules and regulations by the procuring agency;

d. annul in whole or in part of a non-compliant act or decision of a procuring agency, other than any act or decision bringing the procurement contract into force;

e. if the procuring agency is in breach of its obligations under the Ordinance, Rules or Regulations, order the payment of compensation by the officer(s) responsible for mis-procurement for cost incurred by the bidder on preparation of bid;

f. direct that the procurement proceedings may be terminated, in case the procurement contract has not been signed.

g. declare the case to be one of mis-procurement if material violation of Act, Rules, Regulations, orders, instructions or any other law relating to public procurement, has been established.

(8) It shall be mandatory for the appellant and the head of procuring agency or his nominee not below the rank of BS-19 to appear before the Review Committee as and when called and produce

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documents, if required.

(9) In case the appellant fails to appear twice despite the service of notice of appearance, the appeal may be decided ex-parte.

(10) The Review Committee shall hear the parties and announce its decision within ten working days of submission of appeal.

(11) The decision of Review Committee shall be final and binding upon the procuring agency. After the decision has been announced, the appeal and the decision thereof shall be hoisted by the Authority on its website.”

(7) Declaration of mis-procurement and its consequences,-

(1) Notwithstanding anything contained in sub-rule 5 (g):

a. the head of the procuring agency on his own initiative or on recommendation of the Complaint Redressal Committee of the Department may declare the case to be of mis-procurement, if any material violation of provisions of the Act, Rules, Regulations, orders, instructions or any other law relating to public procurement, has been established.

b. the Authority may take notice of any material violation of provisions of the Act, Rules, Regulations, orders, instructions or any other law relating to public procurement and declare the case to be of mis-procurement if such violation has been established.

(2) On declaration of mis-procurement; the head of the procuring agency, the Authority or the Review

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Committee shall refer the case to the Competent Authority for initiation of disciplinary proceedings against the officials of the procuring agency responsible for mis-procurement and may also refer the matter to National Accountability Bureau or / and Federal Investigation Agency initiating action against such officials.”

49. Arbitration.

(1) After coming into force of the procurement contracts, disputes between the parties to the contract shall be settled by arbitration.

(2) The procuring agencies shall provide for a method of arbitration in the procurement contract, not inconsistent with the laws of Pakistan.

No change.

50.Mis procurement.

Any unauthorized breach of these rules shall amount to mis-procurement.

No change.

51. Overriding effect

The provisions of these rules shall have effect notwithstanding anything to the contrary contained in any other rules concerning public procurements:

Provided that the prevailing rules and procedures will remain applicable only for the procurement of goods, services and works for which notice for invitation of bids a procurement notice or Invitation For Bid had been issued prior to the commencement of these rules unless the procuring agency deems it appropriate to re-issue the notice for the said procurement after commencement of these rules.

No change.

52. Post Procurement Reviews(New Addition)

The records of Procurement activities shall be reviewed periodically by the Authority of top ten high value procurements and a random audit of ten of the remaining transactions of procuring agencies. The findings of the post procurement review shall be provided to the procuring agency for improvement in the institutional frame work and public procurement activities.

Post procurement reviews are introduced to enhance quality of procurement of goods, works & services and improvement in the institutional frame work.

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53. Inconsistency (New Addition)

These rules and all the regulations made thereunder are to be taken as mutually explanatory of one another but in case of inconsistency, the Public Procurement Rules, 2004 shall take precedence over all regulations.

The rule is added to clarify the order of precedence in Rules and Regulations.

54. Sector-specific Procurement Supplement to Procurement Rules 2004 (New Addition)

A procuring agency may develop a customized sector- specific procurement supplement to be read in conjunction with the PPRA Rules 2004 and is compliant thereto and which may contain operational procedures based on sector-specific templates for the Standard Bidding Documents and evaluation guidelines, contractual Terms & Conditions, business processes, benchmarks for developing technical specifications of products, participation preferences for sub-contractors from under-developed geographical areas and social domains and User Notes on various stages of the public procurement lifecycle of the said sector.

As international best practices USA has excelled in developing sector-specific procurement supplements which and are read in conjunction with its primary contracting regulation Federal Acquisition Regulations (FAR) and which have been made its part. FAR still remains the core regulatory engine driving government procurement.

Inclusion of this proposed rule is expected to pave the way for development of such sector-specific supplements and may trigger the mechanism for socio-economic development in the Country.

Certain sectors e.g., health, energy, EPC construction and ICT etc have their own peculiarities and special requirements which may not be addressed by general procurement rules and therefore require more focused treatment through development of a procurement supplements which which may be read in conjunction with the PPRA Rules 2004 and which may be compliant to the competitive spirit and aspect of fair play exhibited by the PPRA Rules 2004.

The mechanism of public procurement in Pakistan can be made an enabler of socio-economic development by making it mandatory for the prime contractor to get work of a value equal to atleast 10-15% of the total contract’s amount

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done from sub-contractors hailing from under-privileged geographical areas and deprived social domains. The government may register such sub-contractors under a small business development program, may enhance their professional capacity and provide special funding to them to enable them to establish their set-up for respond to the prime contractor’s technical and skill requirements.

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