The government has amended the Public Procurement Act 2063 for the second time through the Ordinance. As per the amended Act, the time period for the procurement process has been reduced. While the original law mentioned that a time of 30 days should be given for national-level bidding or prequalification proposals and 45 days should be given for international-level bidding, this time has been reduced.

In Sub-section (4) of Section 14 of the original Act, instead of at least 30 days, 21 days and instead of 45 days, 30 days have been fixed.

Similarly, if no proposal is received from any bidder within the period allowed for submitting a bid or prequalification proposal, or if a proposal is received, it is not substantially effective and a bid has to be invited again, it was mentioned that a bid can be invited again after giving a time of 15 days in the case of national-level bidding and 21 days in the case of international bidding. Now, this time has been reduced to 15 days instead of 7 days and 21 days.

It is mentioned that at least 15 days will be given instead of 7 days and 21 days.

It is mentioned that while purchasing, a public body should give priority to domestic goods as prescribed and that the priority should be mentioned in the bidding document. In Section 13 of the amended Procurement Act, after (d) in Sub-section (2) of the original Act, D (1) (2) has been added. In the added Sub-section D (1), in the case where the construction work is included in the bidding process and the contract is obtained by a joint venture, all the members of the joint venture shall bear the responsibility and complete the construction work as per the agreement. The amended Act states that the responsibility of such work cannot be transferred to any one member or limited member of the joint venture or to anyone else.

Amendment to Section 14 of the original Act by adding a restrictive clause at the end of Sub-section (1) of the said Section, in cases where a bid or proposal for pre-qualification is invited through the electronic procurement system, the notice of such invitation shall not be published through any other means than the electronic procurement system. The original Act, on the other hand, states that the notice of invitation to bid or proposal for pre-qualification shall be published in a national daily newspaper and in the case of an international bid, it may also be published in international media.

Sub-section (12) has been added to Section 14 of the original Act, notwithstanding anything else written elsewhere, the Government of Nepal may invite bids by giving a period of 7 days in case of special circumstances.

Sub-section 11 has been added to Section 8 of the original Act in Clause (a). Where it is mentioned that the arrangement for reducing the bid score shall be made through the procurement method.

The revised Act mentions that the method of selecting the bidder or service provider with the lowest score during that period should be remembered. Section (2) of the original Act mentioned that procurement should not be made in pieces in a way that limits competition. But instead, the revised Act mentions that large packages should not be made in a way that narrows and limits competition or that the procurement method should not be made in pieces in a way that changes the procurement method.

In Section 25, Sub-section (7) 7 (b) of the original Act, if a bidder submits a bid that is more than 30 percent lower than the approved cost estimate, the evaluation committee shall request a rate analysis from such bidder.

In Section 26, Sub-section (1) of the original Act, if the bid score of the bid is substantially higher than the cost estimate, the public body may negotiate with such bidder and agree on a lump sum discount percentage to reduce the bid score to within the approved cost estimate and proceed with the procurement process. By adding 1 (a) to Sub-section (1) of Section 27 of the original Act, if the bids of two or more bidders who have accepted the minimum bid are equal, the lowest bid will be selected for acceptance by drawing lots.

By adding these restrictive phrases after Sub-section (1) of Section 30 of the original Act, it has been mentioned that when purchasing consultancy services for an amount less than the specified amount, a notice may be published by giving a prescribed period. In cases where a letter of intent is sought through the electronic procurement system, the notice will not have to be published by any means other than the electronic procurement system. The word 15 days in Sub-section (3) of Section 40 of the original Act has been replaced by the word 7 days.

In the previous Act, it was mentioned that when requesting sealed bids, a notice should be published in a national or local newspaper giving a period of at least 15 days. Section 41 (a) has been added after Section (41) of the original Act. In which, goods and services published on the government e-marketplace prepared by the Public Procurement Monitoring Office can be purchased directly up to the specified amount. Manufacturers, suppliers and service providers will have to publish details of their products and services on the e-marketplace along with their prices.

By adding 42 (a) after Section 42 of the original law, when a public body purchases fertilizers, medicines, information technology or goods or services specified by the Government of Nepal by publishing a notice, the cost estimate and its approval, price increase, acceptance of the bidder, bid security, submission, and purchase agreement must be in accordance with the procedures approved by the government.

By adding 43 (a) to Section 43 of the original law, if a public body has to purchase land for commercial or professional purposes, it may purchase it by adopting the specified procedures. However, when a public body acquires land for public interest, it must do so in accordance with the prevailing laws. The decision of the Public Procurement Review Committee shall be implemented by the concerned public body by adding Sub-section 5 (a) to Sub-section (5) of Section 50.

Sub-section (1) of Section 52 (a) has been amended. The public body may, after the procurement agreement, obtain an advance bank guarantee from the supplier, construction entrepreneur or service provider for the preparation of the construction site, temporary camps, arrangement of workers, management of machinery and equipment, and in the case of supply of goods and consultancy services, after considering the need and justification, provide mobilization funds up to a maximum of 20 percent of the procurement agreement amount. Before providing such funds, the public body shall request the main activities and their schedule.

Earlier, there was a provision that the public body could obtain an advance bank guarantee from the supplier, construction entrepreneur or service provider after the procurement agreement and provide funds not exceeding twenty percent of the procurement agreement amount. According to Sub-section (7) of Section 59 of the original Act, if the contract is terminated, the entire performance security deposited for that work shall be forfeited. It is mentioned that the amount required to complete the remaining work due to the termination of the contract shall be recovered from the bidder who does not perform the work as per the contract as the government dues. In place of the amended Sub-section (8), a new provision has been made.

In the amended Act, if the contract is terminated, the entire performance security deposited for that work shall be forfeited. The additional amount to be borne by the public body shall be determined based on the updated cost estimate made by the public body to complete the remaining work and the amount to be paid by the concerned supplier, construction entrepreneur, consultant or service provider when the work is completed.

‘The additional amount will be recovered from the supplier, construction contractor, consultant or service provider who does not complete the work as per the agreement,’ the amended act states, ‘In the event of termination of the agreement, there will be no impediment to the public body inviting bids to complete the remaining work as per the updated cost estimate.’

The provisions in subsection (1) of section 61 (a) of the original act have been removed and replaced with new ones. Accordingly, if the procurement-related action is not initiated within the stipulated time or if the official concerned with the public procurement work does not take the necessary decision in this regard, the authorized officer will take action against such official in accordance with the prevailing law.

A provision has been added to the act to encourage employees who complete the procurement process on time. For that, Section 61 (b) has been added, where the Government of Nepal or a public body provides incentives to employees involved in the procurement work on the basis of achieving excellent results by completing the procurement-related work in a quality manner within the stipulated time.’