Govt to rewrite public procurement rules
Steps being taken to prevent contractors taking on too many projects at the same time
The government is set to change the rules of the Public Procurement Act to prevent a contractor from getting too many works a year so that the projects can be completed on schedule.
The prime minister instructed not to give more than two projects or lots to a single firm at the same time; if the firm can complete its work in time, it can be given more work later.
If a contractor gets several projects at the same time, various problems arise such as time-wasting and a lack of quality control.
The move to amend the PPA comes after several ministries and divisions including the Prime Minister's Office, Local Government Division and Power Division called for inclusion of 38 provisions to the act.
All rules and regulations require amendment with the passing of time, said MA Mannan, state minister for finance and planning.
The volume of work and price have changed much now than when the laws were enacted. The law has to be modified in light of the change in circumstances, he said.
The LGD proposed dividing a project into several smaller blocks so that more number of contractors can be brought on for timely completion.
The implementation of projects typically gets delayed due to the tendency to award big tenders to a few contractors of choice, said the proposal from LGD.
Giving its opinion on the proposal, the planning ministry said the existing rules provide specific guidelines on how far a project can be divided. It would not be optimum to divide a project into smaller blocks at all times.
The existing law allows participation of new contractors under the limited tendering method for work of up to Tk 2 crore; the contractor cannot quote 5 percent more or less than the estimated price.
The information and communication technology (ICT) division has recommended increasing the range to 10 percent more or less and to lower the ceiling from Tk 2 crore to Tk 1 crore.
A limited tendering method means getting the job done by a contractor listed with the purchasing authorities.
The LGD also called for participation of new contractors under open tender for work involving up to Tk 1 crore. At present, only those who have previous relevant experience can participate in the open tenders.
For projects above Tk 2 crore under open tenders, a clause must be added. It stipulates that contractors quote prices 5 percent more or less than the estimated price, as per another proposal. If the contractor quotes price beyond the range, he/she will be disqualified.
In case of international open tenders, the PMO and the Power Division have recommended adopting “single stage two envelopes” method, which means the bidders will place technical and financial offers at one go.
The planning ministry proposal said the World Bank purchase policy does not allow this method but the Asian Development Bank gives this scope. In case of appointing consultants by development partners, performance security clause will be included in the agreement to ensure accountability.
Planning Minister AHM Mustafa Kamal already held an inter-ministerial meeting last week about the planned amendment to the PPA, with another meeting scheduled for today.