Govt to ease rules governing big contracts

Published: December 10, 2016

ISLAMABAD: The government has planned to relax rules governing public procurement and the bidding process in a bid to award multibillion-rupee contracts without facing obstacles, say officials.

Earlier, the government has drawn flak for violating public procurement rules in the award of lucrative contracts. For instance, a liquefied natural gas (LNG) terminal-building contract given to the Engro group by the Economic Coordination Committee (ECC) sparked scathing criticism of the government, which was forced to float a tender.

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The cabinet, in its meeting held on November 23, considered a proposal for amending the public procurement rules of 2004. It reviewed a summary submitted by the Cabinet Division for amendments and constituted a committee to make changes to the Public Procurement Regulatory Authority (PPRA) Ordinance 2002 and PPRA Rules 2004.

The committee will be headed by Water and Power Minister Khawaja Muhammad Asif and comprise Law and Justice Minister Zahid Hamid, Railways Minister Khawaja Saad Rafique, States and Frontier Regions Minister Lieutenant General (Retired) Abdul Qadir Baloch and Finance Secretary Dr Waqar Masood.

The cabinet was informed that consultations had not been held with public-sector organisations that made big procurements and it would be appropriate to address their concerns while amending the PPRA ordinance and rules.

Section 26 of the PPRA Ordinance 2002 gives powers to the federal government to make rules for meeting purposes of the ordinance. The PPRA board, in its meeting held on October 19, 2016 had also decided to introduce certain amendments to rules 12, 42 and 45 of the PPRA Rules 2004.

Rule 12 deals with advertisement methods and says procurement opportunities may also be advertised in print media, if deemed necessary by the procuring agency. It also says the lower financial limit for advertisement on the authority’s website for open competitive bidding will be the prescribed financial limit for request for quotations under clause (b) of Rule 42.

Under Rule 42, procuring agencies may provide for petty purchases where the object of procurement is below the financial limit of Rs25,000. Such procurement will be exempt from the requirement of bidding or quotation of prices.

This rule also deals with direct contracting for procurement that concerns the acquisition of spare parts or supplementary services from the original manufacturer or supplier. This also provides the clause of negotiating with the contractors.

Published in The Express Tribune, December 10th, 2016.

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