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Public Procurement Regulatory Authority Rules

PPRA Pakistan

Public Procurement Regulatory Authority (PPRA) Pakistan

Public Procurement Regulatory Authority (PPRA) Pakistan was established in 2002 to regulate all procurements of goods, services and works in the public sector.  Tasked to build and strengthen capacity, to develop a uniform, modern, transparent and cost effective public procurement system, PPRA is also endowed with the responsibility to create standard, coherent and transparent set of rules, regulations and procedure.

The basic aim for putting in place a public procurement rules and framework is to promote transparency and efficiency in procurement procedures and to provide equal and nondiscriminatory treatment to all economic operators participating in public procurement.

 

FREQUENTLY ASKED QUESTIONS

Question No. 1
What is the minimum response time for procurement advertisements?
Answer:
In terms of Rule 13 of the Public Procurement Rules 2004 the minimum response time shall not be less than fifteen (15) days for national competitive bidding and thirty (30) days for international competitive bidding. The Procuring Agencies can increase the response time depending upon nature of procurement.

Question No. 2
How can procuring agency calculate response time?
Answer:
The response time shall be calculated from the date of first publication of the advertisement in newspaper or posting on the PPRA’s website. If the advertisement is mandatory to advertise in both print and PPRA website in terms of Rule 12 of Public
Procurement Rules, 2004 the response time shall be calculated from the day of its first publication in the newspaper.

Question No. 3
Can procuring agency fix amount for bid security?
Answer:
In terms of Rule 25 of the Public Procurement Rules 2004 the procuring agency may require the bidders to furnish a bid security not exceeding five percent of the bid price. The procuring agencies cannot fix the amount on account of bid security.

Question No. 4
Can procuring agency reject bids without assigning any reason?
Answer:
No procuring agency can reject any bid without a reason. In terms of Rule 33(1) of the Public Procurement Rules 2004 the procuring agency may reject all bids or proposals at any time prior to the acceptance of a bid or proposal. The procuring agency shall immediately give notice of rejection of bid(s) to all bidders. On request by the bidders, the Procuring Agency shall intimate the reasons of rejection of bids but will incur no liability on this account nor is required to justify the rejection of bids.

Question No. 5
What course of action will be adopted by the procuring agency when all the bid prices substantially exceed the cost estimates/ market value?
Answer:
The cost of bids are required to be assessed in the light of the evaluation criteria and other terms and conditions set forth in prescribed bidding documents. Keeping in view principles of procurement as given in rule 4, a procuring agency shall take a decision on acceptance of the bid. However, if it does not found feasible, procuring agency is allowed to cancel all the bids prior to acceptance as provided under Rule-33 of the Public Procurement Rules, 2004 and invoke Rule 34 of the said Rules for re-bidding.

Question No. 6
Whether the procuring agency can enter into negotiations with the bidders for the reduction in the prices or to call for new bids?
Answer:
Negotiations with the bidder having submitted the lowest evaluated bid or with any other bidder are not allowed as provided under Rule 40 of Public Procurement Rules, 2004.

Question No. 7
Whether negotiation if allowed to be made with all the bidders or only with the lowest evaluated bidder?
Answer:
Negotiations with the bidder having submitted the lowest evaluated bid or with any other bidder are not allowed as provided under Rule 40 of Public Procurement Rules, 2004.

Question No. 8
Many procuring agencies are signing Memorandum Of Understanding (MOU) with the Transparency International Pakistan empowering the latter to scrutinize contracts to be signed by them. Is this practice not an overlap of PPRA mandate by a Civil Society Organization and is it in line with PPRA Ordinance 2002 and Public Procurement Rules, 2004?
Answer:
Only PPRA has been mandated by its Ordinance 2002 to monitor and regulate the application of law and rules relating to public procurement of all goods, services and works. PPRA does not indulge in line clearance functions nor this function is covered by law or has been outsourced by PPRA to any Civil Society Organization in /outside the country. Public sector organizations entering into MOU entailing line clearance function do so at their own risk and cost.

Question No. 9
How to upload tender documents at PPRA’s website?
Answer:
Following methods are used for uploading of tenders on PPRA website:-
1. Online: User ID and Password can be provided on request at email address info@ppra.org.pk for online tender submission.
2. By Post: Soft copies of Tender documents can be sent by Post/ Courier to “IT section Public Procurement Regulatory Authority, 1st Floor FBC Building G-5/2 Islamabad”
3. By-email: Tender documents can be sent as attachment with file extension “DOC” (MS Word File), “JPG” (Image File), “PDF” (Acrobat Reader File) at email address info@ppra.org.pk

Question No. 10
It is not clear whether all annual requirements if known would have to be advertised in advance on PPRA’s website or just the main items.
Answer:
Indicative requirements of annual procurement should be advertised under Rule 9, at macro level, on PPRA’s website as well as on the website of the organization concerned for advance information of prospective bidders. Detailed advertisement for processing the procurement should subsequently be made, as required from time to time, in accordance with Rule 12. PPRA has already devised a proforma for this purpose.

Question No. 11
If a tender for procurement of goods over one hundred thousand rupees and up to the limit of two million rupees uploaded on Authority’s website, would there be any compulsion on the procuring agency to advertise it in the print media also?
Answer:
If a tender for procurement of goods, services and works costing over rupees one hundred thousand and up to the limit of two million rupees has been launched on Authority’s website, it is not mandatory to put the advertisement on print media.

Question No. 12
i. If only one tender/bid is received in response to a tender notice advertised in both or one of the media (Authority’s website/ print media), should the single tender be accepted or re-advertised the tender.
ii. How to compare the only one bid received by a procuring agency?
iii. If no tender/ bid is received against a requirement, what method of procurement is recommended to be adopted (Re-advertisement or Direct Contracting)
Answer:
i. Public Procurement Rules, 2004 don’t put any limit on number of tenders/bids received in response to tender notices provided that the procurement opportunity has been advertised in the prescribed manner. The single bid may be considered if it meets the evaluation criteria expressed in tender notice and is not in conflict with any other rules, regulations or policy of the Federal Government. However the procuring agency should make a decision with due diligence and in the light of Rule 4
“Principles of Procurement”.

ii. Whenever a procuring agency is confronted with such a situation whereby the rate quoted by the single bidder cannot be compared so as to declare it as the lowest rate or otherwise it may make a prudent decision. While making a decision, the following factors may be kept in view:-
a. The comparison of price of the goods, works or services if procured during the current financial year.
b. Market price of the goods, works and services to be procured.
c. In case abnormal increase in prices is observed, the procuring agency may like to re-advertise the procurement opportunity, if time permits.

iii. Re-advertisement would be a preferred option. Direct contracting could also be used provided it meets the prescribed condition for direct contracting.

Question No. 13
Under the Rules if preference was allowed to a domestic or national supplier/contractor, magnitude of price preference to be accorded should be mentioned. However, a clarification whether the magnitude of price preference should be in figure or the
percentage, needs to be obtained.
Answer:
Preference to domestic or national suppliers or contractors should be provided in accordance with policies of the Federal Government. The magnitude of preference, presently in vogue-but for goods of domestic value addition, has been specified in para 3 of the Ministry of Commerce S.R.O 827(1)2001 dated 3rd December, 2001 as amended on 28.09.2002. This S.R.O can be downloaded from PPRA’s website.

Question No. 14
a) It has been observed that financial limits for procurement under sub rules(a) & (b) of rule 42 are not sufficient. These limits need to be reviewed.
b) Moreover, under sub rule c (iv) a procuring agency may engage in direct contracting for repeat orders not exceeding fifteen percent of original procurement. It is not clear how this rule could be applied in case of procurement of spare parts / equipment.
Answer:
a) The sub rule (a) of rule 42 and sub rule (b) of rule 42 are provided with a similar proviso which read as “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”. Accordingly the procuring agencies desirous to use / invoke the proviso may send a proposal for consideration of PPRA Board.

b) Procurement of spare parts has been dealt with separately under Rule 42(c)(i) which reads as “A procuring agency shall only engage in direct contracting if the following conditions exist, namely:-

The procurement concerns the acquisition of spare parts or supplementary service from original manufacturer or supplier:
Provided that the same are not available from alternative sources;
In case of procurement of spare parts/ equipment through open competitive bidding when spare parts of required specifications are available from multiple sources, repeat orders not exceeding fifteen percent of the original procurement of the spare parts/ equipment may be placed under Rule 42(c) (iv)”.

Question No. 15
Which type of record is to be maintained for audit?
Answer:
Following documents may be kept for maintenance record of procurement by the procuring agencies for requirements of audit:

i. Detail with regard to the originating of demand. It explains the nature quantity of the items to be produced. It should be supported by justification report.
ii. Purchase requisition may be maintained. It shows specification as well as quantity of the items to be produced. It also contains the name / names of the consignee, to whom the material is to be delivered.

Tender documents / file
iii. It includes consolidation of tender documents, preparation of tabulation statements, analysis of sales, comparative statement, evaluation of tender, documents by the technical committee, approval of the competent authority.
iv. Purchase order file be maintained. It includes the documentary detail of the quantity ordered, rate accepted and delivery period, inspection of material, chemical analysis, acceptance of material on basis of suitability report from the consignee and finally, delivery of material to the ultimate consignee.
v. Material receipt note be maintained, it shows description and quantity of material accepted. It is an authority for payment.
vi. Contractor bills:- These show detail of material supplied and must always be accompanied by original copy of material, Receipt Note and original sales Tax Invoice.
vii. Budget file containing appropriation for the purchase.
viii. File relating to sanction / approval of competent authority to make the purchase and make payments and related documents, necessary for audit including need assessment, actual quantities demand, difference if any, from items purchased and those required along with justification.
ix. Record of goods, services and works to be planned / procured in a year before publishing advertisements.
x. Record of spare parts / equipment or services procured from the original manufacturer or record of goods, services and works actually procured in a particular year.
xi. Copies of tenders / quotations invited to make the purchases along with specifications.
xii. In case of limited tenders, sealed quotation, comparatives statements and invitation record.
xiii. Record showing he particulars of bidders who purchased tender documents, deposited bids and participated in the tendering process.
xiv. Record of bidders who deposited bid security to the procuring agency.
xv. Pre-qualification record of suppliers / contractors.
xvi. Technical & Financial bid evaluation reports of each type of procurement.
xvii. Newspapers in which advertisements published against each procurement.
xviii. Record of cash deposit receipt, received from the bidders.
xix. Stock Register containing the entries of purchase and specification of items purchased.
xx. Register showing details of items procured services made as well as work done.
xxi. The record pertaining to requisitions made by the department as well as approval of the competent authority for said procurement.
xxii. Record of black-listed suppliers / contractors.
xxiii. Purchase committee should also keep a record of evaluation of input cost of consumable stores on the basis of project usage in addition to the cost of the equipment while evaluating the bids.
xxiv. Delivery of challan of suppliers / contractors.
xxv. Instructions to bidders.
xxvi. Proceedings of committees.
xxvii. Final approval of competent authority for procurement from a particular bidder at specific rate.
xxviii. Acceptance letter to successful bidders.
xxix. Bank guarantees.
xxx. In case of imported goods, import invoices, inventories, indents, letter of credit and shipping documents.
xxxi. Issue indents / acknowledgments.
xxxii. Pre-qualification record of suppliers and contractors.
xxxiii. Inspection rates / laboratory tests and analysis reports of samples provided by suppliers.
xxxiv. Tender opening committee should record their proceedings and if feel necessary negotiation be carried out with the different suppliers / contractors.
xxxv. Delegation of financial powers.
xxxvi. Codal requirements.
xxxvii. Contractor profile.
xxxviii. Firms registered with sales tax department.
xxxix. Test reports.
xl. All latest instruction / direction / discretion / rules / regulations for procurement.

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