Public Procurement Act & Rules - Amended Upto 2076

Public Procurement Act and its Rules (Amended up to 2076) – for study purpose only
APPLICABLE FOR
All the procurement i.e. acquisitions of any goods (any kind of object, whether movable or immovable, living or
nonliving, and this term includes services incidental to the supply of such goods), consultancy services ( any study,
research, survey, design, drawing, supervision, training, testing, software development service or other intellectual or
professional service of a similar nature) or other services (hiring motor vehicles, equipment or goods, carriage or repair
and maintenance of goods) or carrying out or causing to be carried out any construction works (site preparation,
excavation, erection, building, installation of equipment or goods and decoration etc., associated with the construction,
reconstruction, demolition, repair or renovation of any structure or works, and this term also includes services incidental
to construction work such as mapping, laboratory testing, satellite photography and seismic investigation), by following
entities (known as public entities):
1. Constitutional organ or body, Court, Ministry, Secretariat, Commission, Department of the Government of Nepal
or Province Government or any other Governmental Entity or Office thereunder,
2. Corporation, Company, Bank or Board owned or controlled fully or in majority by the Government of Nepal or
province government or Commission, Institute, Authority, Corporation, Academy, Board, Center, Council
established at the public level or formed by the Government of Nepal or province government under the laws in
force and other corporate body of a similar nature,
3. University, College, Research Center, which is operated by the Government of Nepal or receives grants fully or in
majority from the Government of Nepal or province government, and other Academic or Educational Institution
of a similar nature,
4. Local body (Village Development Committee, Municipality or District Development Committee)
5. Development Board formed under the Development Board Act, 1956,
6. Body operated with loan or grant of the Government of Nepal or province government, and
7. Other Bodies as specified by the Government of Nepal or province government by publishing a notification in the
Nepal Gazette, as a Public Entity.
NOT APPLICABLE FOR
a) If the Government of Nepal decides that procurement relating to security, strategic or defense by application of
the process in accordance with this Act is not appropriate for the interest of national security or defense, or
In making a decision as above, Government of Nepal shall have to state reasons for procurement and determine
separate procedure related thereto as well.
b) If as per the agreement between government of Nepal and donor party, procurement is to be made in accordance
with the Procurement Guidelines of a donor party, or
c) Public entities which compete with private sectors for business, or Exempted Entities:
i. Nepal Doorsanchar Company Limited,
ii. Nepal Khadya Sansthan,
iii. National Trading Limited,
iv. Nepal Airlines Corporation,
v. Janak Shikshya Samagri Kendra Limited,
vi. Nepal Aaushadhi Limited,
vii. Singhadurbar Baidyakhana Bikas Samiti,
viii. Jadibuti Utpadan Tatha Prasodhan Company Limited.
d) Purchase made for promotion of customs, finance, technology, etc. for trade fairs, festivals, etc. organized in foreign
country, or
e) Nepal embassy located in foreign country,
f) Public entities licensed to operate aviation service and when such public entities are required to procure aviation or
equipment relating to aircraft. For example, Nepal Airlines Corporation (NAC).
g) Where the occurrence of special circumstance has created a situation in which, if a procurement is not made
immediately, the public entity will sustain further loss, the Public Entity may procure or cause to be procured
immediately.
The chief of the Public Entity shall have to give information of the circumstances above and the detailed description
concerning the procurement to be made immediately to one level higher authority.
Where special circumstances mean a circumstance resulted from natural or divine calamity and sudden or
unexpected special circumstance such as epidemic disease, drought, no rainfall, deluge, earthquake, flood, landslide
and firing, and this term also includes a circumstance such as war or internal conflict.
CA Mahesh Gyawali www.ottish.com | Learn Anywhere, Anytime 1

STEPS INVOLVED
S. No. Steps Remarks

1 Establish Public procurement Unit -
2 Prepare Master Procurement Plan If plan or project to be operated for more than one
year or Procurement Value > 10 crores p.a.
3 Prepare Annual procurement Plan and include it in If Procurement Value > 10 lakhs p.a.
budget
4 Obtain Procurement Requisition -
5 Preparation of Procurement Proceedings -
6 Prepare specifications, plans, drawings, design, -
special requirement or other descriptions
7 Prepare and Update Cost Estimate If Procurement Value > 1 lakh (Except: construction
contract)
8 Approve Description and Cost Estimate prepared or -
Updated above
9 Prepare or Update Standing List for each Procurement of consultancy service if Procurement
procurement separately Value < Rs. 20 lakhs
Procurement of Consumable goods or capital goods
or consultancy or other service or construction work
if Procurement Value < 5 lakhs
If work is to be carried out or service is to be
obtained from NGOs
10 Set criteria for qualification of bidders or proponents Except: Procurement of a construction work the cost
estimate < 2 crores.
11 Selection of Procurement Method -
12 Review of Procurement Decisions If Any
13 Conclude Procurement Contract & Publish Notice -
14 Implementation of Contract -
15 Insurance Procurement Value > 10 lakhs
16 Payment of Running Bill or Invoice -
17 Work Completion Certificate -
18 Final Payment -
19 Dispute Settlement -
20 Termination of Procurement Contract -
21 Remedy on termination of Procurement Contract -

STEP: 1:
ESTABLISH PUBLIC PROCUREMENT UNIT
• The chief of the concerned Public Entity shall be responsible for carrying out or causing to be carried out all
procurements by complying with the procedures referred to in PPA.
• Such procurement related activity shall be carried out through an employee who has the qualification prescribed
by the Public Procurement Monitoring Office and has knowledge or training on procurement business.
• On the basis of workload and nature of procurement, the public entity shall establish a separate procurement
department or section or unit and specify procurement officer in order to carry out the following acts:
a) Preparing a procurement plan,
b) Preparing prequalification documents, bidding documents and procurement contract related documents by
making necessary amendments in the standard bidding documents, standard prequalification documents and
standard procurement contract documents prepared by the Public Procurement Monitoring Office,
c) Preparing documents relating to proposals for consultancy services by making necessary modification in the
standard request for proposal prepared by the Public Procurement Monitoring Office,
d) Publicly publishing the procurement notice,
e) Issuing pre-qualification documents, bidding documents or forwarding documents relating to proposals for
consultancy service,
f) Receiving and safely keeping pre-qualification proposals, bids or consultancy service proposals,
g) Submitting the pre-qualification proposals, bids or consultancy service proposals to the evaluation committee
for evaluation and submit the evaluated bids for acceptance,
h) Notifying the acceptance of the pre-qualification proposals, bids or consultancy service proposals,
i) Obtaining, examining and safely keeping the performance guarantee,
j) Examining, or causing to be examined, the quality standards of the goods, construction works or services that
have been procured,
k) Making available the information and documents asked for by the Public Procurement Monitoring Office, and
l) Performing other functions as may be prescribed.
STEP: 2
PREPARE MASTER PROCUREMENT PLAN
(If plan or project to be operated for more than one year or Procurement Value > 10 crores p.a.)
Prepare a master procurement plan which shall contain the following matters:
a) Type, quantity and tentative estimated value of procurement,
b) Method of procurement,
c) Where procurement is broken up into lots or a package for maximizing competition, provisions relating
thereto,
d) Tentative number of contracts to be made for the completion of overall procurement proceedings and major
activities that pertain to such procurement proceedings
e) Matters relating to prequalification proceedings, if required, for procurement,
f) Tentative time schedule for procurement proceedings,
g) Other matters as may be determined from time to time by the Public Procurement Monitoring Office.
STEP: 3
PREPARE ANNUAL PROCUREMENT PLAN AND INCLUDE IT IN THE
ANNUAL PLANS AND PROGRAM AND BUDGET OF THE PUBLIC ENTITY
(If Procurement Value > 10 lakhs p.a.)
Prepare annual procurement plan which shall contain the following matters:
a) Description relating to the type of procurement,
b) Possible package of procurement,
c) Time schedule of procurement proceedings,
d) Method of procurement,
e) Type of contract to be entered into for procurement,

f) Other matters as may be determined from time to time by the Public Procurement Monitoring Office.
STEP: 4
OBTAIN PROCUREMENT REQUISITION
The Procurement Unit of the concerned public entity shall obtain procurement requisition from its divisions and sections
with Description relating to type, quality and quantity of goods, Timing of procurement of goods, Estimated cost of
procurement, and Source of financing and get such requisition to be approved by the competent authority.
STEP: 5
PREPARATION OF PROCUREMENT PROCEEDINGS
• Identify the need for procurement.

• Obtain information as to the procurement contract prevailing at the market in order to identify various technical
solutions relating to procurement and ascertain the availability of supplier.
• Where goods, construction works or consultancy services or other services of similar nature were procured in the
preceding years, study the procedures of such procurement.
• Public Entity making any procurement shall, to the extent possible, make by inviting open bids, and provide equal
opportunity to qualified bidders to participate in such procurement process without any discrimination.
• The public entity shall, in making any procurement, make such procurement only from a person, firm, organization
or company who has obtained permanent accounts number and value added tax registration certificate from the
inland revue office.
• Procurement may also be made from a person, firm, organization or company who has not obtained the value
added tax registration certificate on any of the following conditions:
a) Procuring goods or construction works valued at less than twenty thousand rupees,
b) Procuring goods or services exempted from valued added tax,
c) Renting a house, and
d) Procuring construction works with the involvement of consumers' committee or beneficiary community.
• A public entity shall, in making procurement by selecting any method set forth in these Rules, procure goods
manufactured in Nepal despite that the cost of such goods is higher by up to 15% than that of goods manufactured
abroad.
STEP: 6
PREPARE SPECIFICATIONS, PLAN, DRAWING, DESIGN,
SPECIAL REQUIREMENT OR OTHER DESCRIPTIONS
• Prepare a specifications, plan, drawing, design, special requirement or other descriptions pertaining thereto on the
basis of relevant objective technical and quality characteristics and functions of such goods, construction works or
services.
• Particular brand, trademark, name, patent, design, type, origin or producer’s name not to be mentioned in
description.
(Exception: If there is no other way than such mentioning, a particular brand, trademark, name, patent, design,
type, origin or producer’s name shall be mentioned and the words “equivalent to” shall be mentioned thereafter.)
• Description not to be made with intention to create obstacles, in any manner, to participation by qualified bidders
in the procurement process or to limit competition without any justification.
STEP: 7
PREPARE OR UPDATE COST ESTIMATE
(If Procurement Value > 1 lakh (Except: construction contract))
• A public entity shall take into account the following matters while preparing the cost estimate of any procurement:
a) Whether all procurement acts can be done through the same procurement contract or separate procurement
contract needs to be made for each item of work,
b) Whether the procurement contract is required to be renewed or not,
c) If there is any alternative to procurement, such alternative,
d) Maximum amount & time likely to be required for completion of work referred to in the procurement contract,

e) Other matters as may be determined from time to time by the Public Procurement Monitoring Office.
• The following matters shall be taken into account while preparing the cost estimate of consultancy service:
a) Where the concerned Ministry has prepared the norms relating to the cost estimate of consultancy service,
such norms,
b) Terms of reference of the concerned consultancy service,
c) Actual cost incurred in the procurement of the same nature by the concerned public entity or any other public
entity in the current year or in previous years,
Provided that, in preparing the cost estimate based on this Clause, the cost estimate shall be prepared by
adjusting the price at the rate of previous years,
d) Remuneration of key human resources and other human resources,
e) Travel costs, accommodation costs of human resources, office expenses, required goods, equipment and
service costs, translation costs of reports and other documents and printing costs,
f) Where the consultant has to organize any training, symposium or travel, costs required for the same and other
costs.
• In preparing the cost estimate of any construction work, the cost estimate shall be prepared as per the norms
concerning the construction work, archaeological excavation and underground works such as tunnel digging, deep
tube-well and petroleum exploration, where such norms are available, and failing such norms, the required norms
shall be prepared and caused to be approved by the Government of Nepal, Council of Ministers, and the cost
estimate shall be prepared as per the approved norms.
• In preparing the cost estimate of the rent of any motor vehicle, machinery, equipment or goods to be hired, the
chief of the concerned public entity shall form a committee comprising a maximum of three skilled technicians
having knowledge of such vehicle, equipment or goods. If such an entity does not have such technical human
resources, the superior office of such an entity shall form such a committee.
STEP: 8
APPROVE DESCRIPTION AND COST ESTIMATE PREPARED OR UPDATED ABOVE
• If the description and cost estimate prepared or updated above are required to be amended with variation of more
than 25% of original approved or was designed erroneously or procurement process is disturbed due to false
estimate prepared, the person preparing, examining or approving as well as advisor for preparation of such design
or estimate shall be liable for punishment as per prevailing laws.
• No punishment under special circumstances where Special Circumstance means a circumstance resulted from
natural or divine calamity and sudden or unexpected special circumstance such as epidemic disease, drought, no
rainfall, deluge, earthquake, flood, landslide and firing, and this term also includes a circumstance such as war or
internal conflict.
STEP: 9
PREPARE OR UPDATE STANDING LIST FOR EACH PROCUREMENT SEPARATELY
➢ Procurement of consultancy service if Procurement Value < Rs. 20 lakhs
➢ Procurement of Consumable goods or capital goods or consultancy or other service or construction work
if Procurement Value < 5 lakhs
➢ If work is to be carried out or service is to be obtained from NGOs
• Any importer, supplier, constructor, consultants, NGOs or service providers desirous to be included in such
standing list shall make an application with prescribed documents to the entity and such standing list shall be
updated yearly:
a) Registration Certificate
b) Permanent Account Number or Value Added Tax Registration Certificate
c) Tax Clearance Certificate
d) Others as necessary

STEP: 10
SET CRIETERIA FOR QUALIFICATION OF BIDDERS OF PROPONENTS
(Except: Procurement of a construction work the cost estimate < 2 crores.)
• In setting forth qualification criteria professional and technical qualifications, equipment availability, past
performance, after-sale service arrangements, availability of spare parts, legal capacity, financial resources
and condition, punishment for having committed professional offenses and similar other criteria may be
considered.
• No provision can be so made as to allow only a particular class of construction entrepreneur, supplier, and
consultant or service provider to participate or to prevent any particular class of construction entrepreneur, supplier,
and consultant or service provider from participating in the procurement process.
• Bids, pre-qualification proposals and consultancy service proposals shall be evaluated only in accordance with the
criteria set forth in the bidding documents, pre-qualification documents and in the documents relating to proposals,
respectively, and such criteria shall equally be applicable to all bidders or proponents without any discrimination.
• The Public Entity may disqualify a bidder or proponent at any time if it finds that the statement submitted by such
bidder or proponent concerning the qualifications was factually false or substantially incomplete.
Provided that minor errors can be corrected by seeking information pertaining thereto from the concerned bidder
or proponent.
In determining the criteria of qualification of bidders or In determining the criteria of qualification of the
proponents of prequalification taking part in the proponent taking part in procurement proceedings of a
procurement proceedings relating to the supply of goods, consultancy service, a public entity may determine such
the public entity may determine such criteria having
criteria having regard to any or all of the following
regard to any or all of the following matters as required:
a) Technical capacity, matters:
b) In the event of installation of goods, expertise of a) If the proponent is a person, his or her experience,
technician to be involved in such installation, and if the proponent is a firm or organization, its
c) Assurance that the goods to be supplied can function institutional experience as required,
smoothly for a specific period of time, b) Required educational qualification of key staff of the
d) Provision of repair and maintenance of goods, proponent and required experience of work of similar
e) Availability of services and reserve spare parts, nature,
f) In the case of a supplier supplying goods, along with c) Mode of performance of work, responsiveness to
installation thereof, skills, mastery, experience and procedures, terms of reference, technology transfer
reliability of such supplier. and schedule of time,
g) The nature, quantity of goods supplied by the d) Managerial capacity of the proponent,
bidders to governmental bodies or private e) Financial capacity of the proponent,
organizations in the last three years, contract price, f) Where request for proposal is made internationally,
date thereof, and the names and addresses of such participation of native human resources,
governmental bodies or private organizations, g) Description specifying the public or private
h) If the goods to be procured are of complex or organization to which the consultancy service
exceptional nature, documents showing a check identical to the proposed consultancy service has
carried out by the public entity itself or on its behalf been provided during the period of last ten years, the
by a qualified official body of the country in which amount and date thereof,
the bidders or prequalification proponents are h) Description as to qualification of the key staff
established on the production capacities of the proposed for the completion of the proposed work,
bidders or prequalification proponents, i) Description of his or her managerial staff and average
i) Certificates drawn up by official quality control annual human resources in the last three years, and
institutes or agencies of recognized competence j) Portion of the proposed consultancy service which he
attesting the conformity of goods to be procured or she intends to get provided through a sub-
clearly identified by reference to specifications or contractor.
standards on the basis of inspection of such goods,
j) Samples, supplementary descriptions or
photographs required to certify the authenticity of
the goods to be supplied,
k) Proportion of the supply work which the bidders
intend to sub-contract.

A public entity may, in specifying the criteria as to the qualification of the bidder or pre-qualification proponent
participating in the procurement actions of a construction work costing more than 2 crores rupees, specify such
criteria having regard to any or all of the following matters, as required:
a) General experience in the execution of works solely as a prime contractor or of works under a management
contract or as a partner of a joint venture or as a subcontractor,
b) A minimum average annual turnover of construction works of or above the threshold referred to in the
bidding documents or prequalification documents, having completed solely or including the works carried
out as a partner of a joint venture. In the case where a national open bidding is invited, the maximum average
turnover of any 3 years out of 10 years shall be taken as the basis.
c) A special experience upon having executed monthly or yearly a construction work equivalent to the
minimum amount set forth in the bidding documents or prequalification documents solely or by concluding
a management contract or as a partner of joint venture or a sub-contractor, and having completed
successfully the procurement contracts of the nature, complexity and construction technology similar to the
proposed procurement contract in such a number as specified in such documents,
d) Economic and financial capacity as to the availability of liquidity, credit facility and other financial source
(excluding the advance payment under any procurement contract) which may provide such cash-flow as
may be necessary to complete the proposed construct work or other construction work which the concerned
bidder or prequalified proponent has been executing or committed to execute or the accessibility to the
source of such property in cases where there is no payment of money or delay in payment of money required
to commence the construction work referred to in the procurement contract,
e) Skilled human resources as specified in the bidding documents or prequalification documents,
f) Main equipment, machineries as specified in the bidding documents or prequalification documents in
running condition which are owned by the bidder or pre-qualified proponent himself or herself or which will
be so available by way of rent, lease, contract or other commercial means that they can be used freely during
the period of the procurement contract.
STEP: 11
SELECTION OF PROCUREMENT METHOD
For procurement of goods, construction works or other

Remarks
services
By inviting open bids (bolpatra) If Procurement Value > 20 lakhs
• At international level or
• At national level
(Bid means a document setting out price, proposal or rate
submitted by a bidder in the format specified by a Public Entity
as per the notice published by that entity for procurement.)
Types of inviting bids on the basis of prequalification:
• Inviting open bids by determining prequalification, -
• Inviting open bids without determining prequalification Construction for ≤ 2 crores
Open bid may be invited in:
• A single stage or -
• Two stages (1 technical bid, if selected then only financial Not feasible to define technical aspects or Complex
st
bid) nature of work

By inviting sealed quotations • If Procurement Value ≤ 20 lakhs
(Sealed quotations mean the statement, accompanied by the • Procurement of X-ray, ECG, medicinal goods,
quoted price, in a sealed envelope, submitted by an interested medical equipment used for diagnosis and
person, firm, company or organization in respect of provision of treatment of a disease, of cost ≤ 50 lakhs rupees
any goods or works or other services in response to a notice of
a public entity.)
By procuring directly • If Procurement Value ≤ 5 lakhs
• Only one supplier or construction entrepreneur or
consultant or service provider
• Additional goods or services of proprietary nature

• One public entity from another public entity
• International inter-governmental entities at the
price / rate prescribed
• Special Circumstances
• Not included in the initial contract due to failure to
foresee and difficult to be completed by separating
from the initial contract due to technical or
financial reasons
• Service of same consultant is indispensable
• Medicinal goods ≤ 20 lakhs rupees
• Goods manufactured in Nepal ≤ 15 lakhs rupees
• Cottage Industry ≤ 25 lakhs rupees
Through participation of user’s committee or beneficiary group If Procurement Value ≤ 1 crore
(User committee means a committee formed by the persons
directly benefited from construction works from amongst
themselves so as to build, operate, repair and maintain such
works.)
Through force account (अमानात) Works such as repair and maintenance of ordinary
nature, regular petty work or sanitation, through
force account shall be caused to be executed through
(Force account means any construction work to be executed by negotiation after breaking it into pieces ≤ 1 lakh
a public entity itself.) rupees or be awarded on wage basis by making
available the necessary
• If Procurement Value ≤ 10 lakhs: Request
Through NGOs
proposals through notice
• If Procurement Value > 10 lakhs: Open expression
of intent (Similar to procurement of consultancy
vide same process)
Through Lump sum piece rate Construction for ≤ 2 crores
Items Monetary Limits
(NRs.): With VAT
Vehicles 60 lakhs
Through Catalogue Shopping Heavy Equipment 60 lakhs
X-ray, MRI & other health 40 lakhs
related devices
Other machineries 25 lakhs
Procure any goods, construction work, consultancy
Through Limited Tendering service or other service which are or will be available
limitedly.
It would not be cost effective, after the expiry of the
period of their guarantee or warrantee specified by
their manufacturers, to repair, maintain and bring
into use any motor vehicles, machineries, equipment,
devices, chemicals, fertilizers, pesticides or other
goods of similar nature owned by a public entity and
Through Buy Back Method
they would not yield results conforming to the
standards specified by such manufacturing
companies or cannot be reused or purposeful, and
that it would not be appropriate to keep storing them
or even to auction them from the point of view of
public health or environment.
For procurement of consultancy services Remarks

By soliciting competitive proposals (prastab)

Solicitation from conslutants in Standing List • If Procurement Value ≤ 20 lakhs
Solicitation of open expression of interest:
National level If Procurement Value > 20 lakhs to 10 crores
International level If Procurement Value > 10 crore
Through direct negotiations: • If Procurement Value ≤ 20 lakhs

By the chief of the public entity himself • If Procurement Value ≤ 5 lakhs
By the chief of the public entity with approval from one level • If Procurement Value > 5 lakhs to 20 lakhs
higher authority
Appointment on the basis of expertise
For procurement of other services Remarks

Renting of house or land
• Rent ≤ Rs. 15 lakhs p.a. within the Kathmandu
Valley and ≤ Rs. 5 lakhs p.a. outside the
Direct negotiation Kathmandu Valley,
Through public notice • More than above
Obtaining service on contract to operate its day-to-day works
such as office security, transportation of letters, sanitation,
operation and supervision of telephone, electricity and water
supply system, animal health and agricultural dissemination,
maintenance and care of garden, typing or computer type and
driving.
Direct negotiation If Service fees ≤ 5 lakhs
Repair and maintenance
PROVISION RELATING TO BIDS
PROCESS AND STAGE OF BIDDING

• A public entity shall procure through bidding any construction works, goods or services whatsoever of which cost
estimate exceeds twenty lakhs rupees.
• In invitation to bid can be made by the following process:
a) Inviting open bids by determining prequalification,
b) Inviting open bids without determining prequalification (Construction for < 2 crores)
• The open bid may be invited in:
a) a single stage or
b) two stages (1st technical bid, if selected then only financial bid)
• Two-stage biding may be invited in the following conditions:
a) When it is not feasible to define fully the technical aspects of the goods or construction works or services to
be procured or the terms and conditions of the procurement contract at the time of the invitation to bid, or
b) Because of the complex nature of the goods or construction works or services to be procured, if it is necessary
for the Public Entity to discuss with the bidders about how to resolve the problems related to various technical
aspects or the procurement contract and about such technical aspects and conditions of contract and benefits
accruing there from.
INTERNATIONAL LEVEL BIDDING
• While making invitation to bid pursuant to this Act, an international level bid shall be invited in any of the following
conditions:
a) Where the goods or construction works as requisitioned by a Public Entity are not available under
competitive price from more than one construction entrepreneur or supplier within the State of Nepal,
b) Where no bid was submitted in response to invitation to national level bidding for the procurement of
goods, construction works or other services, and the same has to be procured from abroad,

c) Where under an agreement entered into with a donor party, foreign goods or construction works have to
be procured from foreign assistance source,
d) Where the Public Entity has certified that the goods or construction works, being of complex and special
nature, have to be procured through an international level bidding.
PREPARE PREQUALIFICATION DOCUMENTS
• Prepare Prequalification documents which shall contain following matters:
a) The matters to be included in the prequalification documents are as follows:
b) Qualification required for the proposed work and in the case of a joint venture, the qualification of the partners,
c) Documents and information to be submitted by a bidder to prove his/her qualifications and eligibility,
d) If procurement requires to be made by making separate lot or package of goods or construction work, such lot
or package,
e) Method of preparing proposal,
f) Process of evaluating pre-qualification proposal,
g) Major conditions of procurement contract,
h) Such matters specified from time to time by the Public Procurement Monitoring Office as required to be
included into the pre-qualification documents, and
i) Method, place, deadline for submitting pre-qualification proposal.
• The Public Entity shall provide the prequalification documents required to submit proposal to all persons, firms,
companies and organizations that request for such document.
• The selection of the qualified applicant shall be made on the basis of the qualification criteria set forth.
• The Public Entity shall openly publish a list of the applicants so selected and send the same to all applicants.
• If any applicant whose prequalification proposal is rejected, requests for the information of the reasons for the rejection
of his or her proposal, within thirty days of the notice being given, the concerned Public Entity shall have to provide
such information to him or her.
PREPARE BIDDING DOCUMENT
• Bidding Document means a document prepared by the concerned Public Entity making invitation to bid for submission
by bidders by filling up or preparing price or proposal or rate in such document and this term also includes instructions
to bidders, specifications, drawing, design, terms of reference, schedule of work, evaluation criteria, bill of quantities,
conditions of contract and similar other documents.
• The bidding documents shall contain the following matters:
a) The nature of procurement, time required for procurement and technical specifications thereof,
b) Where bids are invited without carrying out prequalification, the criteria for qualification of bidders,
c) Where there is provision of site visit, information relating thereto,
d) If any bid conference has to be held prior to submission of bid, information relating to such conference,
e) Instructions for preparing and submitting bids, the place for the submission of bids, the deadline for the
submission of bids and the place, date and time for the opening of bids,
f) Component of price, the currency or currencies in which the bid price may be stated, the currency and the source
and date of the related exchange rate to be used for comparison of bids,
g) The criteria and methodology for the evaluation of bids and the selection of bidder,
h) The preferences to be given, if any, for domestic goods and local construction entrepreneurs, provision relating
thereto,
i) Where any goods or construction works are to be procured by making separate lots and packages, such lots and
packages and the manner of evaluation thereof,
j) Where alternatives to the technical specifications are also invited, the manner of evaluation of such alternatives,
k) Where a bid can be submitted even only for a portion of the goods, construction works or services to be procured,
a description of such portion or portions,
l) The validity period of bid,
m) The amount, type, acceptable form and validity period of security to be furnished for bid, performance or
other necessary matters,
n) Where a bid security is required, provision that the period of that security shall exceed by thirty days to the
validity period of bid,
o) Performance guarantee to be kept as:
Bidder accepted amount up to 15% less than estimated 5% of accepted amount
Bidder accepted amount more than 15% less than estimated 5% of accepted amount + 50% of amount
which he had accepted below 15%
p) Financial and technical details submitted by the bidder in any public entity,
q) If such bidder had accepted and initiated any work with any other public entity, details about such entity, work,
amount of contract and work progress,

r) The terms and conditions of the procurement contract under Section 52 and the modality of coming for the entry
into force of that contract,
s) Information that bids shall not be processed in the event of conflict of interest or information relating to legal
action for fraud or corruption,
t) Provision that any bidder may make an application, for review, against any error or decision made by the Public
Entity in carrying out bid proceedings,
u) Provision that the documents proving technical capacity and financial proposal (bid price) have to be
submitted in one envelope, and
Such other matters determined by the Public Procurement Monitoring Office as to be involved in the
prequalification documents or bidding documents.
• The Public Entity shall make available the bidding documents upon collection of the charges as prescribed to any
person, firm, organization or company that requests for the bidding documents in accordance with the notice for
invitation to bids, and where prequalification is required to participate in the procurement proceedings, to those
persons, firms, organizations or companies that have been pre-qualified and request for such documents.
• In case of two staged bidding while inviting the first stage bid, the bidding documents shall state the purpose of
procurement, expected performance, broad specifications and other broad features and the qualification of bidders,
and state that bidder shall not be required to quote the price in his/her bid and shall submit only technical proposal and
comments on the terms and conditions of the proposed procurement contract.
PUBLISH NOTICE FOR INVITATION OF BIDS OR PREQUALIFICATION PROPOSALS
• Publish in a daily newspaper of national circulation and, in the case of an international bid; it may also be published
in any international communication media.
• A notice on invitation to international bidding shall be published in English language; and all bidding or
prequalification documents shall have to be made available in the English language. Further, such notice shall have to
be placed in the website also.
• Place in website of the concerned entity or that of the Public Procurement Monitoring Office:
a) Mandatory: Central Level Public Entity
b) Optional: District Level Public Entity
• Notice on invitation to bid or prequalification proposal shall contain the following matters:
a) The name and address of the Public Entity inviting bid,
b) The nature of and time limit for procurement work and the place of delivery of the goods to be supplied, the
services to be delivered and the construction work to be performed,
c) If bid security is required, the amount and validity period thereof,
d) Where bid security is required, the amount and validity period of the bid,
e) The place, manner of obtaining the bidding documents or prequalification documents, and the fees charged,
f) The place, manner, the deadline for the submission or forwarding of the bidding documents or
prequalification documents,
g) The place, date and time for the opening of bids, and matter that the bidders or their authorized agents shall
be invited to attend the opening of bid, and
h) Other matters as prescribed.
• Period to be given for submission of bid documents:
Initially If bids not submitted If bids not submitted or submitted bids are not relevant
or submitted bids are or if procurement is not done promptly or work of entity
not relevant may be halted
National Level 30 Days 15 Days 7 Days
International Level 45 Days 21 Days 7 Days
• In making procurement through an international level bidding, the Public Entity may give domestic preference to the
Nepalese entrepreneurs and businesspersons as prescribed, and where domestic preference is to be so given, that matter
shall be set forth in the notice on invitation to bid and the bidding documents.
• Preference shall be given to the domestic firms, organizations or companies that participate solely or in joint venture
with domestic firms, organizations or companies in the case of an international bidding.
• In giving preference, the proposal of a domestic firm, organization or company whose bid price exceeds by up to 5 %
of the bid price offered by a foreign firm, organization or company that offers the lowest price may be accepted.
• A foreign bidder, while submitting bid, shall have to state whether he/she has appointed any agent in the State of
Nepal or not. A foreign bidder, while submitting bid, shall have to state whether he/she has appointed any agent in the
State of Nepal or not and where an agent is appointed, the details as prescribed in relation to the agent shall also be
set forth in the bid.
• Where a foreign bidder enters into joint venture with a domestic construction entrepreneur, in the case of procurement
of public construction work, preference may be given to such a foreign bidder.

• The public entity shall mention the following validity period of tender or proposal of consultancy service in the tender
documents or request for proposal documents:
Cost estimate No. of days
Within 10 crores 90
Above 10 crores 120
CLARIFICATION AS TO UNCLEAR MATTER ON BIDDING OR PREQUALIFICATION DOCUMENTS
• Where any bidder, being unclear about any matter set forth in the bidding documents or the prequalification
documents, requests, within the time period set out in such documents, for a clarification, the Public Entity shall have
to communicate the information of such matter to all bidders prior to the deadline for the submission of bids or
prequalification proposals.
• Where the Public Entity makes any alteration/modification in the information and the bidding documents or
prequalification documents, it shall have to communicate information relating to such alteration/modification to all
bidders that have participated in the procurement proceedings within a reasonable time so as to enable them to take
such alteration/modification into account in submitting their bids or preparing their proposals for prequalification.
• Where it is necessary to provide additional time to bidders, the Public Entity may extend the deadline for the
submission of bids or prequalification proposals.
• Organize a conference of bidders in advance of at least 10 days prior to the deadline for the submission of tender in
the case of a notice of invitation to national tender and in advance of at least 15 days prior to such deadline in the case
of a notice of invitation to international tender, for the purpose of briefing bidders on the tender documents, technical
specifications, sites or similar other matters. (Optional)
SUBMISSION OF BIDS
• A bid shall have to be submitted in the specified form, duly signed by the bidder himself /herself or his /her authorized
agent, in a sealed envelope by the bidder himself /herself or through his or her authorized agent or by post or courier
at such place and within the last date and time as specified for the submission of bids.
• Bids received after deadline shall not be processed and such bid shall be returned unopened to the concerned bidder.
WITHDRAWAL AND MODIFICATION OF BID
• Except for bids submitted by electronic means, any bidder may, before 24 hours of expiry of the deadline for the
submission of bids, make a sealed application for modification to or withdrawal of bid that a bidder has once submitted.
• In case of two staged bidding, the Public Entity may hold discussions with any or all bidders in relation to the technical
bids submitted in response to the invitation to bid and may, also taking into account the discussions held, do the
following in relation to the bids submitted:
a) Canceling a proposal relating to a bid that fails to meet the basic requirements required to be met in relation to
procurement or fails to make minimum performance or fails to complete the work within the specified period or
that cannot be modified to meet such requirements or to make such performance or to complete the work within
the specified period or due to any other weakness,
b) Modifying or improving the technical specifications, evaluation criteria and terms and conditions of the
procurement contract in order to increase competition,
c) Determining the evaluation system in order to determine the appropriateness of various options submitted by the
bidders.
• In case of two staged bidding, after the completion of discussions, if any, the Public Entity shall make invitation to
second stage bid and in making such invitation to bid, the bidders whose bids have not been cancelled shall be invited
to submit bid along with price in accordance with revised bidding documents.
BID SECURITY
• Security means retention money or earnest money furnished as security pending the completion of any
obligation/work, and this term also includes bid security or performance security or an amount furnished for security
required to be so furnished for any other reason.
• A bidder shall provide as prescribed bid security along with the bid and such security may be forfeited under following
conditions:
a) If the bidder requests for modification or withdrawal of bid during the validity period of bid, after the
deadline,
b) If the bidder refuses to accept the correction of arithmetical errors found in the bid,
c) If the selected bidder fails to sign the procurement contract in accordance with the terms and conditions set
forth in the bidding documents,
d) Where the bidder fails to furnish the performance security as set forth in the bidding documents within the
time for signing the procurement contract,
e) If the bidder has changed the bid price or substantive matter of the bid while providing any information in
response to clarification sought by the Public Entity pursuant in the course of examination of bids.
f) If any act contrary to conduct is committed.

• After the conclusion of a procurement contract, the Public Entity shall return the bid security of the bidder who has
signed the procurement contract and the bid security of those bidders whose bid security is not liable to forfeiture.
OPENING OF BIDS
• The Public Entity shall have to open bids as prescribed at the time and place specified in the bidding documents on
the same day immediately after expiry of the deadline for the submission of bids.
• The chief of public entity shall form a committee under convenorship of the procurement official and consisting of at
least two members to open the bids or proposals registered with the public entity, and cause such bids or proposals to
be opened in presence of the bidders or their representatives at the pre-determined time.
Provided that nothing shall bar the opening of bids or proposals for the sole reason that a bidder or his or her
representative is not present.
• The public entity shall, open the envelope of every bid which is requested by the bidder for withdrawal and read out
the name of such a bidder and then open all envelopes submitted for modification of bids and read out the content
inside such envelopes.
• Then after the public entity shall open every submitted bid one by one, and read out contents of such a bid, prepare a
record (Muchulka) thereof and cause such a record (Muchulka) to be signed by the concerned bidder or his or her
representative who is present.
EXAMINATION OF BIDS
• The Public Entity shall have to submit to the evaluation committee the bids opened above and the committee shall,
prior to evaluating the bids, examine the bids in order to ascertain the following matters:
a) Whether documents establishing that the bidder is qualified under law to submit the bid are submitted or not,
b) Whether the bid is complete in accordance with the instructions to bidders set forth in the bidding documents or
not and whether it is signed by the bidder or by the bidder’s authorized agent or not,
c) Where a bid security is required to be submitted along with the bid, whether a bid security of such type, period
and amount as set forth in the bidding documents is accompanied with the bid or not,
d) Whether the bid is substantially responsive to the technical specifications set forth in the bidding documents and
the terms and conditions of procurement contract attached with the bidding documents or not.
• In examining the completeness of bids pursuant to clause (b) above, the following matters shall be examined:
a) Whether a power of attorney for the authorized agent or local agent of the bidder is submitted,
b) Where a joint venture agreement is necessary, whether such agreement is submitted,
c) Whether documents establishing the eligibility of the bidder and of goods mentioned by the bidder are submitted,
d) Whether necessary document relating to the qualifications of the bidder is submitted,
e) Where the bidding documents require the submission of a rate analysis, whether such rate analysis is submitted,
f) Other matters as prescribed.
• For two stage biddings:
1. The evaluation committee shall, while evaluating the technical aspect of a bid evaluate the following matters:
a) Scope of the supply of goods, construction work or other service,
b) Technical specifications and operating and performance characteristics of key goods, construction work or other
service, and
c) Warranty period.
2. After evaluating the technical aspect of a bid, the evaluation committee shall, while evaluating the financial aspect
of such a bid, evaluate the following matters:
a) Period for the supply or completion of goods, construction work or other service,
b) Conditions of payment,
c) Liquidated damages to be paid by the bidder for not completing the work in time and the bonus to which the
bidder is entitled for completing the work before time,
d) Bidder’s liability towards warranty,
e) Liability to be fulfilled by the bidder,
f) If the bidder has added any other conditions to the proposed procurement contract, such conditions.
• The Public Entity may, in the course of examining the bids pursuant to this Section, ask bidders for necessary
information and the concerned bidder shall have to provide the information sought by the Public Entity and in
providing such information, no change or alteration in the bid price or other substance of the bid shall be allowed.
• While examining the qualification, if the qualification of a bidder is found to be substantially lower than what was at
the prequalification stage, the bid of such a bidder shall be rejected.
• If any arithmetical error is found in a bid in examining bids pursuant to this Section, the Public Entity may correct
such an error, and where, in making such correction, there exists a discrepancy between unit rate and total amount,
the unit rate shall prevail, and the total amount shall be corrected as per the same rate.
NON-PROCESSING OF BIDS
a) Not sealed,

b) Not submitted within the time frame,

c) Withdrawn,
d) Not in accordance with prequalification requirements,
e) Bids submitted by mutual collusion,
f) Cancelled.
EVALUATION OF BIDS
• Where a bid is found containing minor deviations in the matters such as the technical specifications, descriptions and
characteristics etc. so as not to reject the bid, the value of such deviations shall be quantified, to the extent possible,
and included in the evaluation of bids however if the value of minor deviations in bid exceeds 15% of the bid price of
the bidder, such a bid shall be deemed to be substantially non-responsive; and shall be excluded from evaluation.
(Minor deviations mean such deviations that do not materially depart from the matters such as the technical
specifications and descriptions as set forth in the bidding documents.)
• Bid shall be evaluated in accordance with the criteria and methodology set forth in the bidding documents; and in
carrying out such evaluation, the bid with the lowest bid price shall be determined by making comparison of the
evaluated price of every bid with the evaluated price of the other bids.
• The qualifications of the bidder of the bid having the lowest bid price shall be verified in order to ascertain whether it
conforms to the qualification criteria set forth in the bidding documents or not.
• Where on examination, the qualification of the bidder of the bid having the lowest bid price is in conformity with the
qualification evaluation criteria set forth in the bidding documents, such bid shall be the lowest evaluated substantively
responsive bid.
• Where, on examination, the qualification of such bidder is found not to be in conformity with the qualification as
evaluation criteria set forth in the bidding documents, such bid shall be excluded from evaluation; and the qualification
of the next bidder having the next lowest bid price shall be examined on the same grounds respectively.
• The evaluation committee shall prepare an evaluation report stating, the criteria and methodology of evaluation of the
lowest evaluated substantially responsive bid and submit the report to the Public Entity.
REJECTION OF BIDS OR CANCELLATION OF PROCUREMENT PROCEEDINGS
• The Public Entity may, in the following circumstances, reject all bids or cancel the procurement proceedings:
a) If none of the bids are substantially responsive,
b) If agreement could not be reached with bidder,
c) If the bid price of the lowest evaluated substantially responsive bid is substantially above the cost estimate, or
d) If requisitioned goods, construction works, consultancy services or other services are no longer required.
• No bid shall be rejected or re-bidding shall be invited only for the reason that only a few bids are or only one bid is
substantively responsive.
• The Public Entity shall have to communicate to all the bidders a notice along with the reason for the rejection of bids
or cancellation of the procurement proceedings.
• In making re-invitation to bid because of non-submission of any bid in response to an invitation to bid or cancellation
of all bids or cancellation of the bid proceedings, the modification shall also be carry out in the bidding documents,
technical specifications, cost estimate and terms and conditions of procurement contract as per necessity by reviewing
the reasons for such rejection of bids or cancellation of the bid proceedings.
• If it is proved that the bidder has submitted bid by collusion among the bidders, such bid shall be rejected.
ACCEPTANCE OF BID AND PROCUREMENT CONTRACT
• The Public Entity shall select for acceptance only the lowest evaluated substantially responsive bid.
• Within 7 days of the selection of the bid, the Public Entity shall serve a notice of the intent of acceptance of his or her
bid to the concerned bidder and the information regarding the name, address of the bidder whose bid has been so
selected and the price of the bid shall also be communicated to the other bidders.
• If no bidder makes an application for review of procurement proceedings within a period of seven days of providing
the notice, the bid of the bidder selected shall be accepted and a notice shall be communicated to the bidder to furnish
the performance security (refer notice for amount of security) to conclude the procurement contract within 15 days.
• If, within 30 days of the communication of the notice, any bidder whose bid has been rejected requests for grounds
for the rejection of its bid, the Public Entity shall have to communicate such information to that bidder.
• The concerned bidder shall have to furnish the performance security and sign the procurement contract.
• If the bidder fails to furnish the performance security and sign the procurement contract within that period, the bid
security of that bidder shall be forfeited, and the bid of the other immediately next lowest evaluated substantially
responsive bidder shall be accepted and the procurement contract concluded.
• If even the next bidder fails to furnish the performance security and sign the procurement contract, the bid of the other
immediately next lowest evaluated substantially responsive bidder, respectively, shall be accepted, and a notice shall
be served to that bidder for concluding the procurement contract.

• The public entities shall complete the process regarding to approval of bids and procurement contract within the period
of validity of bid.
PROVISION RELATING TO SEALED QUOTATIONS

(If Procurement Value < 20 lakhs)
• Sealed quotation means the statement, accompanied by the quoted price, in a sealed envelope, submitted by an
interested person, firm, company or organization in respect of provision of any goods or works or other services in
response to a notice of a public entity.
• Prepare a form of sealed quotation stating clearly therein the specifications, quality, quantity terms and conditions of
supply and time and other necessary matters of the goods, construction work or other services to be procured.
• Publish a notice in a national or local level newspaper by giving a period at least of 15 days.
• Any person who submits a sealed quotation shall furnish, along with the sealed quotation, a cash guarantee in a sum
to be set by 2.5% of the price offered by it or a guarantee equal to that amount issued by a commercial bank with
validity period of 75 days.
• The validity period of the sealed quotation shall be Forty-Five days.
• The public entity shall open sealed quotations, as far as possible, in presence of the sealed quotation bidders or their
agents in the place specified in the notice soliciting sealed quotations immediately after the expiration of the deadline
for the submission of sealed quotations.
• The lowest evaluated sealed quotation falling within the cost estimate shall have to be approved.
• Procurement of X-ray, ECG, medicinal goods, medical equipment used for diagnosis and treatment of a disease, the
cost of which does not exceed 50 lakhs rupees may be made by inviting sealed quotations.
PROVISION RELATING TO DIRECT PROCUREMENT
• Goods or consultancy services or other services may be directly procured or construction work may be caused to be
carried out directly in the following conditions:
a) Low-value procurement i.e. procurement of Consumable goods or capital goods or consultancy or other service
or construction work the value of which is up to 5 lakhs rupees,
(No direct procurement shall be made from the same person, firm, company or organization more than once in
one financial year and for purchase > 1 lakhs rupee obtain minimum three quotations from standing list.)
b) If only one supplier or construction entrepreneur or consultant or service provider has the technical efficiency or
capacity to fulfill the procurement requirement,
c) If only one supplier has the exclusive right to supply the goods to be procured and no other appropriate alternative
is available,
d) If additional goods or services of proprietary nature within the prescribed limit is to be procured from the existing
supplier or consultant or service provider after it has been proved that if the existing supplier or consultant or
service provider is changed to replace or extend existing goods or services or the spare parts of the installed
machine the goods or services existing in the Public Entity cannot be replaced or changed,
(Proprietary goods mean any subsidiary equipment and spare parts manufactured by a manufacturer of any goods,
machines or equipment for the operation or repair and maintenance of such goods, machines or equipment.)
e) Purchases by one public entity from another public entity,
f) Purchase of goods or services from international inter-governmental entities at the price / rate prescribed by such
entities,
g) Purchases required to be made in special circumstances:
h) If the most necessary construction works, goods or consultancy services or other services within the limit as
prescribed but not included in the initial contract due to failure to foresee and difficult to be completed by
separating from the initial contract due to technical or financial reasons, is to be procured.
i) If the service of a particular consultant with his unique qualifications is immediately needed for the concerned
work or where the service of same consultant is indispensable.
• Medicinal goods the price of which does not exceed 20 lakhs rupees or goods the price of which does not exceed
15 lakhs rupees which have been manufactured in Nepal may be directly purchased at the selling price specified by
the manufacturer of such goods by publishing a notice in a newspaper of national circulation.

• In so making direct procurement, goods with Nepal Standard Marks shall be procured to the extent available.
Provided that if there is only one pharmaceutical company prequalified by the World Health Organization to
manufacture any pharmaceutical product, such a pharmaceutical product may be procured through direct
negotiation, irrespective of the amount of such product.
• A public entity may make direct procurement of such goods the price of which does not exceed 25 lakhs rupees as
manufactured by any cottage industry which is so specified by the Government of Nepal by notification in the Nepal
Gazette as to be a domestic cottage industry, upon making a procurement contract with such a cottage industry.
PROVISION RELATING TO CONSTRUCTION WORKS THAT MAY BE CAUSED TO BE CARRIED OUT

BY USERS COMMITTEE OR BENEFICIARY COMMUNITY
• A construction work or service related thereto the cost estimate of which does not exceed 1 crore rupees may be
caused to be executed by or obtained from a users' committee or beneficiary community consisting only of the
inhabitants residing in that place and from the community using such service.
• The cost estimate not exceeding 1 crores rupee shall include value added tax, overhead contingency amount and
amount of portion of public participation.
• A public entity may invite proposals by publishing a public notice setting out the nature, quantity of the concerned
work or service, required amount, amount to be borne by the users' committee or beneficiary community and other
necessary matters or such committee or community itself may submit a proposal or application.
• In awarding the construction work or service to the users' committee or beneficiary community, payment shall be
made only after deducting value added tax, overhead contingency amount and amount of portion of public
participation specified in the cost estimate.
• Once the procurement contract is concluded, the public entity may give earlier advance payment not exceeding one
third amount of the contract amount to such a committee or community. The public entity shall settle the advance
so given before payment of the final installment.
• The users' committee or beneficiary community shall have the technical evaluation of the work, bills, receipts &
other documents proving the expenditure of the work of each installment endorsed by its meeting and submit the
same to the concerned public entity.
• The users' committee or beneficiary community shall post a notice in the public place of the expenditure made by
it in each instalment, and have social audit of the acts and actions performed by it within such period and in
accordance with such process as specified by the Public Procurement Monitoring Office.
• Heavy machines such as a loader, excavator, roller, dozer, grader, bitumen distributor and bitumen boiler cannot be
used in the construction work to be executed by the users' committee or beneficiary community. Provided that if the
work is so mentioned when the cost estimate was prepared as to be work of complex nature requiring the use of
heavy machines, such machines may be used with the consent of the public entity, on recommendation of the
concerned technician.
• The users' committee or beneficiary community itself shall complete the work obtained by it and cannot cause such
work to be executed by a construction entrepreneur or sub-contractor.
• Once the construction work is completed, the public entity shall transfer the ownership of the project to the users'
committee or beneficiary community, also specifying the responsibility of care, repair and maintenance thereof.
• If the users' committee or beneficiary committee is found to have misused any amount received by it, the concerned
public entity shall inquire into the matter and recover such an amount as government dues on pro-rata basis from
the office-bearers of the users' committee.
PROVISION RELATING TO FORCE ACCOUNT
• Works such as repair and maintenance of ordinary nature, regular petty work or sanitation may be done by force
account or caused to be done by a users' committee.
• A public entity shall obtain prior approval of one level higher authority for the execution of a work through force
account.
• If the public entity is required to execute a work through force account, it shall execute the work on wage basis by
procuring the technical service and construction materials required for that work in accordance with the process set
forth in the Act and this Regulation.
• If a construction work is to be executed through force account, such a work may be caused to be executed through
negotiation after breaking it into pieces not exceeding one lakh rupees or be awarded on wage basis by making
available the necessary construction materials.
PROVISION RELATING TO WORK MAY BE CAUSED TO BE CARRIED OUT BY NGOs

• If promptness, effectiveness and economy are achieved in having works such as public awareness training,
orientation, empowerment, main-streaming carried out by a non-governmental organization, the Public Entity may
have such work carried out or obtain such services from a nongovernmental organization by application of the
process as prescribed.
• In order to have a work executed by a nongovernmental organization, the terms of reference specifying the
requirement, type, period, quality of work, human resource, operational modality of such work and a tentative
estimate of the required amount shall be prepared.
• In order to have the work of up to 10 lakhs rupees, the public entity shall request proposals from non-government
organizations registered pursuant to the law in force with the objective of carrying out such work and included in
the standing list, by publishing a notice in a daily newspaper of national or local circulation, giving a period at least
of fifteen days.
• For the execution of a work the cost estimate of which exceeds ten lakhs rupees, open letters of intent shall be
invited and the process applicable for procurement of a consultancy service shall be followed.
PROCUREMENT THROUGH LUMP SUM PRICE RATE METHOD
• If a public entity needs to procure any construction work which is of such a nature as not requiring any qualification
and the cost estimate of which does not exceed 2 crores rupees, it may procure such works through competition on
the basis of the lump sum rate method through a national bidding, upon publishing the cost estimate.
• In submitting a bid, a bidder shall submit the bid offering the lump sum rate which is less or more by a certain
percent than the total cost estimate.
• In this method, a single lump sum price for the procurement of any goods and services is agreed before the works
begins. Generally, the tender is submitted with the details of how and on what basis the work is going to be
performed.
• For example, the minimum and maximum extent of increase and decrease of the cost (if any) than the total estimated
cost is specified before the work begins.
PROCUREMENT THROUGH CATALOGUE SHOPPING
• A public entity may procure any heavy equipment, motor vehicles, tools, machineries, equipment, medical devices
required for health services such as X-ray and MRI or similar other mechanical goods through competition upon
giving a written notice of seven days in minimum to fifteen days in maximum to the companies which produce or
distribute the goods of similar standards or their authorized sellers.
• Upon receipt of the notice, the manufacturing company or its authorized seller who wishes to sell such goods shall
register an application with such a public entity, attaching therewith the description (catalogue or brochure)
containing the official specification, quality, price and facilities of the product.
• Provided that the bid security shall not be required for such registration of the application
• A list of manufacturing companies of the products of similar specifications and quality or their authorized sellers
shall be prepared having regard to the descriptions (catalogues or brochures) containing the specification, quality,
price and facilities submitted by the manufacturing companies or their authorized sellers who have been registered.
• An invitation shall, specifying the quantity of the goods to be procured on the basis of the list be made to financial
proposals, along with an offer to make discount in the price or addition to the facilities out of the price and facilities
specified by the manufacturers or authorized sellers.
• Upon receipt of the proposals the lowest evaluated substantively responsive proponent shall be selected upon
making evaluation pursuant to this Regulation on the basis of, inter alia, the offered discount in the price and addition
to the facilities.
• The procurement contract shall be made with the proponent selected, against the performance security.
• This method shall not be used in the procurement actions requiring the multi-year contract.
• Limits for catalogue shopping:
Items Monetary Limits (NRs.): With VAT
Vehicles 60 lakhs
Heavy Equipment 60 lakhs
X-ray, MRI & other health related devices 40 lakhs
Other machineries 25 lakhs
PROCUREMENT THROUGH LIMITED TENDERING

• If a public entity needs to procure any goods, construction work, consultancy service or other service which are or
will be available limitedly, it may make such procurement by inviting bids or proposals through a fifteen-day notice
on invitation to bids after ascertaining the situation that the number of available suppliers, construction
entrepreneurs, consultants or service provides of such nature is three or below, so that there is competition between
such suppliers, construction entrepreneurs, consultants or service providers only.
• In making procurement through the limited tendering method, the public entity shall obtain prior approval of one
level higher authority.
• This method allows limited bidders for the procurement. If there are limited service providers/vendors for
procurement of any services, the competition for the procurement is made only between and among the limited
Bidders.
PROCUREMENT THROUGH BUY BACK METHOD
• If there exists a situation that it would not be cost effective, after the expiry of the period of their guarantee or
warrantee specified by their manufacturers, to repair, maintain and bring into use any motor vehicles, machineries,
equipment, devices, chemicals, fertilizers, pesticides or other goods of similar nature owned by a public entity and
they would not yield results conforming to the standards specified by such manufacturing companies or cannot be
reused or purposeful, and that it would not be appropriate to keep storing them or even to auction them from the
point of view of public health or environment, the public entity may ascertain such a situation and return the old
goods to the concerned manufacturer, authorized seller or supplier and obtain in exchange the new goods of similar
nature from the same manufacturer, authorized seller or supplier.
• In making an exchange, procurement shall be made by making a procurement contract after obtaining a proposal of
valuation of the old goods from the manufacturer, authorized seller or supplier of such goods after deducting the
valuated amount of the old goods from the specified selling price of the new goods.
• The quality of the new goods to be procured pursuant to this Rule has to be certified by the recognized institution.
• In making the procurement contract it has to specify whether or not the new goods to be procured can be re-
exchanged by using this method after their life-cycle.
• In making procurement the public entity shall so procure only after preparing a list of the old goods and new goods
available in the market and obtaining the approval of the head of department.
PROVISION RELATING TO CONSULTANCY SERVICES
REASONS FOR PROCUREMENT OF CONSULTANCY SERVICES

• A Public Entity may procure consultancy services from any person, firm, organization or company in the following
conditions:
a) If any work cannot be performed by the human resource available at the concerned Public Entity, or
b) If a service is required to be obtained from a consultant under the foreign aid source in accordance with an
agreement with a donor party.
PREPARE TERMS OF REFERENCE
• The public entity shall, for the procurement of consultancy services, prepare the terms of reference indicating the
following matters:
a) Background and objective of the assignment to be performed by the consultant,
b) Scope of work of the consultant and the assignment to be performed by the consultant,
c) Description of existing relevant studies and basic data, if any,
d) If the consultant is required to transfer any knowledge or skill to the public entity, description thereof,
e) If any training is to be provided, the number of employees to be trained,
f) Functions and qualifications of key personnel of the consultant and an estimated time required for the assignment
to be performed by the consultant,
g) Time for the commencement and completion of assignment by the consultant,
h) Description of information, physical facilities and equipment to be provided by the public entity to the consultant,
and
i) Description of reports, data, designs, survey reports etc. to be submitted by the consultant.
SOLICITATION OF PROPOSALS FROM CONSULTANTS IN STANDING LIST (Procurement value < 20
lakhs)

• A public entity may procure a consultancy service the cost of which is less than 20 lakhs rupees by inviting written
technical and financial proposals from the consultants included in the standing list i.e. expression of intent by
publishing a notice is not required.
• While inviting proposals as above, technical and financial proposals shall be invited in separate envelopes, by
sending the documents relating to proposal to six, as far as possible, and at least three consultants.
• In the case where it is required to procure a consultancy service the cost of which does not exceed 20 lakhs rupees
with the approval of one level higher authority, procurement shall be made by obtaining at least three proposals and
holding direct negotiations with the proponent whose proposal is the most useful and offers the lowest price, for the
purpose of ascertaining, inter alia, the quality and price.
• If it is required to acquire a service only for such matters as a training, workshop and seminar which are useful and
necessary for the public entity, such service may be so procured through direct negotiation by the chief of the public
entity himself or herself in the case of a service the cost of which does not exceed 5 lakhs rupees, and with the
approval of one level higher authority in the case of a service the cost of which exceeds such an amount but not
exceed 20 lakhs rupees that it is not contrary to Section 37 of the Act.
SOLICITATION OF OPEN EXPRESSION OF INTEREST FROM CONSULTANTS (Procurement value > 20
lakhs)
• A public entity shall, in order to procure a consultancy service, the cost of which exceeds 20 lakhs rupees, invite
expression of intent by publishing a notice in a newspaper of national circulation, giving a period of at least fifteen
days, setting out the matters as prescribed and may be placed in the website of the concerned Ministry of the Public
Entity or of the PPMO for solicitation of technical and financial proposals in writing.
• If a consultancy service of an amount exceeding 10 crores rupees is to be procured, generally an international
expression of intent shall be invited.
• For procuring consultancy service with cost estimate from 20 lakhs rupees to 10 crores rupees, bids should be obtained
from national bidders and competition should be maintained amongst them.
• International level expression of interest shall have to be invited in the following circumstances:
a) To procure consultancy service, the cost of which exceeds the prescribed threshold,
b) If the consultancy service as requisitioned by the Public Entity is not available under competitive price from
more than one consultant within the State of Nepal,
c) If no proposal has been submitted in response to invitation to national level proposal for the procurement of
consultancy service, and the service has to be procured from any foreign consultant,
d) If it is necessary to obtain services from a consultant under the foreign aid source by soliciting international
expression of interest in accordance with an agreement with the donor party.
SOLICITING PROPOSALS
• The Public Entity shall, upon evaluation, of the qualification, experience and capacity of the intending proponents the
expression of interest, make selection of generally three to six intending proponents and who can provide such
consultancy service, and prepare a short list.
• Request for proposals from intending proponents, by giving a period of at least 15 days (For up to 20 lakhs) or 30
days (For above 20 lakhs), sending the documents relating to proposal, as prescribed to the intending proponents who
are shortlisted.
• The documents relating to proposal shall contain the following matters:
a) The name and address of the Public Entity,
b) The nature of the services to be procured, the time and place when and where the services are to be provided, the
terms of reference of the services, the task to be completed and expected outputs,
c) Instructions to proponent to prepare proposal,
d) Matters that the technical and the financial proposals have to be sealed in separate envelopes, each of which has
to clearly indicate the type of proposal outside it and that both envelopes have then to be sealed in a separate
envelope and that the required services have to be mentioned thereon,
e) Technical and financial evaluation weightage,
f) The criteria and weightage marks for the evaluation and comparison of proposal,
Following criteria shall be set forth as required for the evaluation of technical proposal:
➢ Experience of consultants in the task to be performed by consultants,
➢ The quality of proposed methodology for the performance of task by the consultants,
➢ The qualification of the proposed key human resource,
➢ Provision of knowledge and technology transfer,
In the case of international level proposals, the details of key Nepalese human resource proposed for the
performance of task.
g) Conditions of the procurement contract,
h) The place, date and time for the submission of proposals,

i) Method for the selection of proposals,

The following methods shall be used for the selection of proposals:
➢ Quality and cost method: The technical and financial proposals shall be evaluated in a combined form and
the proposal of the proponent who obtains the highest marks in such evaluation shall have to be selected
as prescribed.
➢ Quality method: Only the proposal of the proponent obtaining the highest marks in the technical proposal
shall have to be selected.
➢ Fixed Budget method: A proposal having cost above such budget ceiling shall be rejected and the proposal
of the proponent who obtains the highest technical marks after falling within such budget ceiling shall have
to be selected.
➢ Least cost method: The proposal of a proponent having the lowest cost out of the proponents having
obtained minimum marks prescribed for being successful in the technical proposal shall have to be selected.
➢ Other methods: Any consultant may be appointed on the basis of qualification in the following
circumstance:
✓ Higher level of expertise is required to do any task, or
✓ Consultancy is needed for a short period of time or time is short for the appointment of a consultant, or
✓ Only some consultants are qualified to perform the required task, or
✓ Much time is needed to select a consultant but adequate time is not available.
j) Statement that proposals shall not be processed in the event of conflict of interest and information relating to legal
action if fraud or corruption is committed,
k) Provision that a proponent may make an application for review, against any error or decision made by the Public
Entity in carrying out proposal proceedings, and
l) Other matters as prescribed.
OPENING OF PROPOSALS: TECHNICAL & FINANCIAL
• After the expiry of the deadline for the submission of proposal, the outer envelope of the proposal received from the
proponent shall be opened and the sealed envelope of technical and financial proposal shall be separated.
• Segregate the envelopes of the proposals received after the deadline and those of the proposals duly registered, and
shall return unopened the proposals received after the deadline to the concerned proponents and mention the matter
of such return, date and time in the report of procurement action.
• Now, open the proposals in the presence of proponents or their representatives. But it shall not bar the opening of a
proposal for the reason that the proponent or his or her representative is not present.
• The envelope of financial proposal shall be opened only after making evaluation of the technical proposal.
• Open every submitted bid one by one, and read out contents of such a bid, prepare a record (Muchulka) thereof and
cause such a record (Muchulka) to be signed by the concerned bidder or his or her representative who is present.
EVALUATION OF TECHNICAL PROPOSALS
As prescribed in the documents relating to proposal (Point (f) above).
EVALUATION OF FINANCIAL PROPOSALS
• As prescribed in the documents relating to proposal (Point (i) above).
• A public entity may procure a consultancy service for the following work by selecting the quality method:
a) A work of such nature that expected work from the consultant cannot be clearly ascertained like economic or
sectoral study of the country, multi-sector feasibility study, design of a mechanism for managing and disposing
hazardous wastes, design of urban master plan, financial sector reform and in respect of which the public entity
expects a research proposal from the consultant,
b) A work of a type that requires higher expertise and that causes serious and long-term impacts in the future, such
as feasibility study or structural engineering design of large dams or major infrastructure building or policy studies
of national importance, management study of large governmental bodies,
c) A work of a type the service charge of which depends upon the quality of work or that may be performed
substantially in different ways by each individual or organization and cost of the competitive proposal of which
cannot be compared, such as management consultancy or sectoral and policy studies.
• The least cost method may be selected for the work which has already been well practiced, is of regular nature and
requires low cost, such as auditing, general engineering design and procurement agent.
REJECTION OF PROPOSAL AND CANCELLATION OF PROCUREMENT PROCEEDINGS
a) If all the received proposals are not substantially responsive to the terms of reference,
b) If the cost offered by the selected proponent is substantially more than the cost estimate and available budget,
c) If the consultancy service is no longer required or,
d) If it is proved that the proponents have submitted the proposal by mutual collusions.
e) Provided that the proposal of those proponents who have not colluded may be processed.
NEGOTIATIONS WITH THE PROPONENT

• Negotiations with the proponent selected may be held in the matter of terms of reference and scope of the proposed
services, progress report, and facility to be made available by the Public Entity.
• The proposal of the proponent who has reached to the agreement from the negotiations shall be selected for acceptance.
• Within seven days of selection of proposal, the Public Entity shall have to serve a notice of the intention of accepting
the proposal to the proponent so selected and to other short-listed proponents.
• If no proponent files an application within seven days of a notice being served, the proposal of the proponent selected
shall be accepted and s/he shall be served a notice by giving a period of fifteen days to come to sign the contract.
• If the proponent attends to conclude contract, s/he shall have to sign contract and if s/he does not attend, the Public
Entity shall hold negotiations, respectively, with the proponent having obtained next higher marks in the case of a
proponent selected by Quality and cost method or Quality method or Fixed Cost method with the next proponent
having the lowest cost in the case of proponent selected by Least Cost method and conclude contract with such
proponent.
PROVISION RELATING TO DIRECT PROCUREMENT
• If it is required to acquire a service only for such matters as a training, workshop and seminar which are useful and
necessary for the public entity, such service may be so procured through direct negotiation by the chief of the
public entity himself or herself in the case of a service the cost of which does not exceed 5 lakhs rupees, and with
the approval of one level higher authority in the case of a service the cost of which exceeds such an amount but
not exceed 20 lakhs rupees that it is not contrary to Section 37 of the Act.
• In the case where it is required to procure a consultancy service the cost of which does not exceed 20 lakhs rupees
with the approval of one level higher authority, procurement shall be made by obtaining at least three proposals
and holding direct negotiations with the proponent whose proposal is the most useful and offers the lowest price,
for the purpose of ascertaining, inter alia, the quality and price.
PROVISION RELATING TO APPOINTMENT ON THE BASIS OF EXPERTISE
A consultant may be appointed on the basis of expertise and qualification in the following circumstance:
a) If expertise of high standard is required to carry out a work, or
b) If the consultancy service is required for a short period or if there is less time to appoint a consultant, or
c) If only a few consultants are qualified to complete the required work,
d) If appointment of consultant takes long time but there is inadequate time for it.
PROVISION RELATING TO RENTING HOUSE AND LAND
• If a public entity is required to rent a house or land, it shall invite for rent proposals by publishing a notice of at least
15 days in a newspaper of national circulation in the case of a central level public entity located within the
Kathmandu Valley, and by posting a notice of at least seven days on the notice board of such an entity and District
Administration Office.
• If a public entity is required to rent a house, land up to Rs. 15 lakhs p.a. within the Kathmandu Valley and up to Rs.
5 lakhs p.a. outside the Kathmandu Valley, the entity may rent the house, land by negotiating directly with the
house, land owner as to services, facilities and amount of rent, upon selecting the appropriate proposal, out of the
proposals received pursuant to the notice.
PROVISION RELATING TO OBTAINING SERVICE ON CONTRACT
• If a public entity is required to take services on service contract to operate its day-to-day works such as office
security, transportation of letters, sanitation, operation and supervision of telephone, electricity and water supply
system, animal health and agricultural dissemination, maintenance and care of garden, typing or computer type and
driving, it may take such services by concluding a contract with any person, firm, organization or company.
• The public entity may, by way of negotiation, procure a service the service fee of which does not exceed five lakhs
rupees.
PROVISION RELATING TO REPAIR AND MAINTENANCE
• If any goods existing in the public entity require repair or maintenance, the user of such goods shall give written
information thereof to the chief of that entity. Upon receipt of such information, he or she shall have a cost estimate
prepared and approve the same.

• Once the cost estimate is prepared, the public entity shall have the goods repaired by its workshop or repair center
where it has such a workshop or repair center. If in so having goods repaired or maintained, any goods, equipment
or spare parts need to be altered, such goods, equipment or spare parts shall be obtained from stock, where there is
such a stock, and where there is no such a stock, be procured by application of the process set out in the Act and
this Regulation.
• In the event of procurement of equipment or spare parts, the public entity shall cause such goods or equipment to
be delivered to store and keep records of the equipment or spare parts the per unit price of which exceeds 5 thousand
rupees, and get it certified by the concerned technician that such spare parts have been replaced for the old equipment
or spare parts, and deliver the old goods to store.
STEP: 12
REVIEW OF PROCUREMENT DECISIONS (if any)
APPLICATION TO CHIEF OF THE CONCERNED PUBLIC ENTITY

• A bidder or proponent may file an application before the chief of the concerned Public Entity for review against any
error or decision made by the Public Entity stating the cause for the damages the bidder will suffer or is likely to suffer
from the error or breach of the duty, imposed on the Public Entity in carrying out the procurement proceedings or
making decision.
• A bidder or proponent who wishes to make an application to the chief of public entity for the review of procurement
proceeding or decision shall set out the following matters in and sign such application:
a) The name, address, telephone, fax number and e-mail address of the applicant,
b) In the case of a body corporate, authorization letter granted by that body to make such application,
c) Tender number,
d) Legal and factual grounds of the application,
e) Copies of relevant documents.
• The application shall have to be filed within the period specified, if any, in this Act for making application and, if not
so specified, within 7 days from the date of the bidder or proponent having become aware of that the Public Entity has
made an error or has dishonored the duty relating to the procurement proceedings.
• In the application the applicant shall have to state clearly the commission or omission of an act by the Public Entity
that led to such error or breach of duty and the provision of this Act or Regulations or guidelines made thereunder that
have been contravened by such decision.
• If, from the inquiry made in respect of the application received, an error is found in the procurement proceedings or
the Public Entity is found to have breached its duty or such decision is found to be contrary to law, the chief of the
Public Entity shall suspend the procurement proceedings and make a decision with reason in writing within five days
of receipt of such application.
APPLICATION TO REVIEW COMMITTEE
• No application may be made to the review committee in respect of the procurement action of less than 2 crore rupees.
• A bidder or proponent may file an application for review before the Review Committee in the following conditions:
a) If the chief of the Public Entity does not make a decision on the application filed before the Public Entity in respect
of the procurement proceedings of the amount above 2 crore rupees within 35 days or if the applicant is dissatisfied
with the decision made by him/her,
b) In the matters related to procurement contract.
METHOD OF REVIEW
• A bidder or consultant filing an application for review before the Review Committee shall have to file such application
in the case of clause (a) above within 7 days and in the case of clause (b) above within 35 days from the date of
conclusion of such contract.
• An applicant filing application for review pursuant to this Section shall have to submit cash amount or bank guarantee
having the validity period of at least of ninety days equivalent to 0.1 % amount of the amount quoted by him or her in
the bid or proposal and if application is made to the review committee against the evaluation of a proposal of such
nature as the price cannot be set out such as a prequalification or technical proposal, there shall be furnished a security
equivalent to a lump sum amount specified in the case of the prequalification proposal and equivalent to the amount
to be set by 10 % of the bid security in the case of the technical proposal.
• Within 3 days of the receipt of application, the Review Committee shall notify, by transmitting a copy of such
application and document attached to such application, if any, to the concerned Public Entity to provide the
information about the action taken in that respect and comments thereon.
• Within 3 days of the receipt of notice as above, the Public Entity shall have to provide to the Review Committee with
information and comments related thereto.

• The Review Committee shall have to make decision within 30 days of receipt of the application on the basis of the
information and comments received and the evidence submitted by the applicant along with the application and, if
necessary, by hearing both the parties as follows:
a) Dismissing the application,
b) In the cases where procurement contract has not been concluded -
1. Giving an order to the Public Entity not to commit or make an unauthorized act or decision or to pursue
incorrect procedure,
2. Annulling the whole or in part an unauthorized act or decision made by the Public Entity,
3. If bids or proposals need to be re-evaluated due to occurrence of error in its evaluation, issuing an order for
re-evaluation, citing such error as well, if any, in the evaluation.
c) Where a procurement contract has already been concluded if the Review Committee considers that such contract
should have been awarded to the applicant, recommending to the Public Entity to pay a reasonable amount
(quantum merit) to the applicant having regard to the grievances suffered by the applicant.
• In cases where an application is dismissed such security shall be forfeited.
PROCUREMENT PROCEEDINGS TO BE WITHHELD
• Upon receipt of the notice of the application for review, the Public Entity shall have to withhold procurement
proceedings until the Review Committee makes a decision in respect of such application, except under following
conditions:
a) If the Public Entity informs the Review Committee certifying the matter that there is an urgency to keep the
procurement proceedings continuing due to an important public interest lying in the procurement proceedings, or
b) If the Review Committee fails to make a decision within 30 days,
c) Where the procurement contract has already been concluded.
STEP: 13
CONCLUDE PROCUREMENT CONTRACT & PUBLISH NOTICE
CONTENTS OF PROCUREMENT CONTRACT

• The procurement contract shall include following terms and conditions:
a) Name and address, telephone, fax number of the parties to the procurement contract and their contact person for
implementation of the contract,
b) Scope of the procurement contract,
c) Details of the documents included in the procurement contract and their priority order,
d) Work performance schedule,
e) Supply time, performance time or whether time can be extended or not,
f) Procurement contract amount or procedure of determining it, Terms and conditions for acceptance of goods,
construction work or services,
g) Terms and conditions and mode of payment including payment of foreign currency,
h) Force majeure,
i) If price adjustment can be made, provision thereof,
j) If procurement contract can be amended and variation order can be issued, provision thereof,
k) If insurance is necessary, provision relating thereto,
l) Security required,
m) Liquidated damages for failure of performance within the stipulated time,
n) Provision concerning bonus to be given if work is completed before the stipulated period,
o) Conditions in which procurement contract may be terminated,
p) Provision whether sub-contract can be concluded or not,
q) Mechanism for settlement of disputes,
r) Applicable law, and
s) Other matters as prescribed.
PUBLIC NOTICE OF PROCUREMENT CONTRACT
The concerned public entity shall, not later than 3 days of the conclusion of the procurement contract, put in the
electronic procurement system of the Public Procurement Monitoring Office a notice containing the name, address of
the contracting party, work under the contract, objective, amount, period and other necessary details with respect to
procurement with the following cost estimate:
Type of procurement Cost estimate
Public construction More than 2 crores
Consultancy Service More than 20 lakhs

Other goods and services More than 20 lakhs

AMENDMENTS TO THE PROCUREMENT CONTRACT
• Unless otherwise provide for in procurement contract, a procurement contract may be amended by written consent of
both the parties subject to non-alteration of the basic nature or scope of the work except variation order or price
adjustment.
ADVANCE ON PROCUREMENT CONTRACT (Optional)
• Public entity may provide advance in separate bank account, up to 20% of the procurement value to the importer or
vendor or constructor or service provider against the submission of a bank guarantee, half (10 percent) of the approved
advance amount for the first time, and remaining (10 percent) on the basis of work progress.
• No separate bank account is required to be opened for the procurement of a construction work whose cost estimation
is less than 2 crores rupees.
• The vendor is required to commence the work within 30 days from the date of receipt of advance and provide the
update to the related public entity regarding the purpose of expenses.
• The Bank Guarantee may be confiscated if it is found that the advance has not been spent on the purpose for which
the advance amount was provided.
VARIATION ORDER: For circumstances that could not be foreseen at the time of signing of procurement
contract
Variation Order (%) Issuing Authority
Up to 5 Gazetted 2nd Class Officer or equivalent official of the concerned public entity.
However, if the project cost has been approved by the higher authority, the
authority to issue the variation order should also not be lower authority.
Up to 10 Gazetted 1st Class Officer or equivalent official of public entity.
However, if the project cost has been approved by the higher authority, the
authority to issue the variation order should also not be lower authority.
Up to 15 Departmental Head Or
Supreme Executive Authority. For example, Governor of Nepal Rastra Bank,
Managing Director of Nepal Oil Corporation etc.
From 15 to 25 Secretary of Ministry or equivalent head of the public entity
Above 25 Council of Ministers, Government of Nepal
However, the Departmental Head will have authority to issue the variation order of more than 15% if the total
procurement value is up to sixty lakhs Rupees.
PRICE ADJUSTMENT IN PROCUREMENT CONTRACT
• Unless otherwise provided in procurement contract, if price needs to be adjusted in the course of implementation of a
procurement contract having duration exceeding 12 months the competent authority may adjust price.
• Provided that where a procurement contract has been concluded to procure a public construction work following the
invitation of national level bidding and the price of any construction materials is increased or decreased unexpectedly
by more than 10% of the previous price, price shall be adjusted as prescribed by deducting 10% in the amount so
increased or decreased.
• Price adjustment cannot be made where the work under the contract is not completed within the period prescribed in
such contract and has taken more time due to the delay by the person who has obtained procurement contract or if
procurement contract is concluded on the basis of lump sum contract or fixed budget.
• The maximum amount of price adjustment shall not generally be more than 25 % of the original contract price.
• The procurement contract may provide that if the amount of price adjustment exceeds that price, the public entity may
terminate the procurement contract or negotiate with the construction entrepreneur, supplier, service provider or
consultant in order to limit the contract price within the approved budget or may pursue other measures or that
additional budget shall be arranged.
PROVISION CONCERNING EXTENSION OF CONTRACT PERIOD
• Shall be as provided in the concerned procurement contract.
• If the work under the procurement contract cannot be completed within the period of such a contract due to force
majeure, failure of the Public Entity to make available the materials to be made available by it or other reasonable
causes, the concerned construction entrepreneur, supplier, service provider or consultant shall make an application,
stating the reason therefor, to the concerned public entity for the extension of the period, at least 21 days before the
expiration of the term of such contract.
• In the case of a procurement contract which has been concluded and of which term has expired prior to 2076.02.23,
the concerned construction entrepreneur, supplier, service provider or consultant shall make an application for the
extension of term, not later than 21 days i.e. 2076.03.11.

• Upon receipt of an application as above the concerned competent authority may make, or cause to be made, necessary
inquiry into the matter. In so making or causing to be made inquiry, the authority shall have regard to the following
matters:
a) Whether the concerned construction entrepreneur, supplier, service provider or consultant has made best efforts
to complete the work under the procurement contract in time or not,
b) Whether the concerned public entity has provided the construction entrepreneur, supplier, service provider or
consultant with the matters required to be provided under the contract or not,
c) Whether the delay in work has been made because of the requirement of documents submission during review
or inquiry or not,
d) Whether the delay in work has been made because of a force majeure event or not.
• If, upon inquiry, the reason referred to in the application appears to be reasonable, extension may be granted as follows:
the authority accepting the bid may extend the term if it is required to extend the term as follows:
Max 15 % of the original period of the contract By authority accepting the bid
Max 25 % of the original period of the contract By the head of department
More than above The secretary of the concerned Ministry or entity
(Max extension allowed: 50 % of the original period of
the contract)
• In case of any procurement contract concluded prior to 6 June 2019 (23 Jesta 2076) and for the extension of the period
of which an application has been made, if it appears on the basis of, inter alia, the technical report and upon an analysis
of the work progress and remaining work that the work under the contract can be completed if the period is extended,
the special class or equivalent officer of the concerned Ministry or entity may so extend the period not exceeding one
year that such extension does not result in any additional financial burden on the public entity or project.
• If one fails to complete the work under the contract even within the period so extended, the performance security and
other security or guarantee, if any, furnished by such a person shall be forfeited and the loss and damage resulted from
such failure to complete the work shall be recovered in accordance with the prevailing law and such person shall be
blacklisted and subject to action under the prevailing law.
STEP: 14
IMPLEMENTATION OF CONTRACT
A public entity shall, while implementing a procurement contract, carry out the following acts, as required:
a) To hold, if necessary, a post-bid conference with the concerned suppliers, consultants, service providers or
construction entrepreneurs,
b) To prepare a work plan and work schedule relating to contract implementation,
c) To make arrangement for opening a letter of credit within the time as per the conditions of the contract,
d) To form a contract implementation team, if necessary,
e) To monitor the progress of the implementation of the procurement contract in accordance with the procurement
administration work plan and to inspect and test quality aspects,
f) To hand over the possession of the construction site to the construction entrepreneur and to make arrangements
for access thereto, to manage procurement contract modification, variation order, price adjustment, suspension
or termination of the procurement contract, work completion certification, payment etc.,
g) If any dispute arises between the public entity and the supplier, consultant, service provider or construction
entrepreneur, to have recourse to the mechanism for dispute settlement referred to in such a contract; where the
contract is breached, to institute action as per the provisions relating to remedies referred to in the contract,
h) To manage the financial aspects of the contract implementation including the budget and cost accounting
aspect,
i) To make provision requiring that the construction entrepreneur mandatorily post the details on its notice board
at the construction site,
j) To keep the documents relating to contract implementation orderly and systematically,
k) To approve the performed work, and
l) To submit periodic reports of contract implementation to one level higher authority.
STEP: 15
INSURANCE (Procurement Value > 10 lakhs)
• Except as otherwise provided in the procurement contract, a construction entrepreneur executing a construction
work the price of which exceeds one million rupees shall insure the following matters:
(a) Full replacement costs of the construction work including construction materials, machine, equipment or plant
to be used,
Explanation: For the purpose of this clause, "costs" includes the profit as well.
(b) Fifteen percent amount of the replacement costs referred to in clause (a) or additional amount as set out in the
procurement contract, in order to cover professional charges, expenses to be incurred in the demolition, removal
of any portion of the construction work, in the removal of debris or wasted materials, expenses for loss or
damage occurred or incidental cost relating thereto,
(c) Adequate amount required for the replacement in the construction site of the equipment and other things
brought onto the construction site by a construction entrepreneur,
(d) Every loss and damage caused to any part or portion of the construction work by whatsoever reason other than
that referred to in sub-rule (2), arising from the date of the handing over of the construction site till the date of
issuance of the taking over certificate to the construction entrepreneur,
(e) The following liabilities of the construction entrepreneur:
➢ Loss and damage caused in the course of discharging construction entrepreneur's obligation during the
defect’s liability period, and
➢ Loss and damage caused during the defect’s liability period by any reason arisen prior to the
commencement of the defect’s liability period.
• The construction entrepreneur shall not bear the obligation for the loss and damage from the insurance caused from
the following reasons:
a) War, enmity or invasion,
b) Rebellion, revolution, insurrection or military rule or civil war,
c) Ionizing radiation, radiation of nuclear fuel or nuclear waste originated from the combustion of nuclear fuel or
explosion of radioactive toxic or explosion of other hazardous elements or nuclear assembly or pollution of
nuclear portion thereof, and
d) Pressure wave caused by an aircraft or aerial device that flies at a sonic or supersonic speed.
• In procuring goods, insurance shall be so made from warehouse to warehouse as to cover all risks including war,
strike and fire of an amount equal to at least 110 percent of the CIP (Carriages and Insurance Paid to) price.
STEP: 16
PAYMENT OF RUNNING BILL OR INVOICE
• Subject to the procurement contract, the Public Entity shall have to make payment of the bill/invoice as prescribed.
• A procurement contract may provide that a public entity may make payment of a running bill or any other bill or
invoice on any or all of the following bases in accordance with the terms of the contract:
a) On monthly basis,
b) On the basis of the actual performance stated in the measurement book post technical measurement and
checking,
c) Where the procurement contract specifies the indicators for measuring the completed work, after receipt of
such indicators, and failing such indicators, on the basis of the work completed,
d) On the basis of the quantity of a work transferred or completed, and
e) On the basis of the terms of letter of credit.
• In order to receive payment of a running bill or any other bill or invoice, the supplier, construction entrepreneur,
service provider or consultant shall submit such documents as may be required by the procurement contract.
• The concerned authority shall, not later than 30 days, approve the running bill or any other bill, invoice and documents
submitted, and the public entity shall make payment of such a bill or invoice as per the procurement contract within
that period.
• The public entity shall, in making payment, deduct, for retention money, if provided in the contract, 5 % of the amount
specified in the running bill or other bill or invoice.
• If the procurement contract provides that where prompt payment of the bill or invoice is made by the public entity,
the supplier, construction entrepreneur, service provider or consultant shall provide discount of a certain amount or
percentage of such payment, the public entity shall make such payment only after deducting such discount.
• The public entity shall make the payment within the period specified in the procurement contract. If it does not make
payment within that period, it shall pay interest thereon as per the procurement contract.
• While making payment of more than Rs. 25,000.00 to the supplier, construction entrepreneur, service provider or
consultant it shall be made through the account payee cheque.

STEP: 17
WORK COMPLETION CERTIFICATE
• The concerned construction entrepreneur shall submit as-built drawing to the public entity within thirty days of the
completion of the construction work as per the procurement contract.
• After the completion of the construction work as per the procurement contract, if any defect is seen prior to the
expiry of the defect’s liability period of the construction work as per the contract, the public entity shall ascertain
such defect and make claim in time. In making such a claim, the concerned public entity shall prepare records
showing work progress of each month and have the records certified by the concerned authority.
• The chief of public entity shall or technical employee appointed, after expiry of the defect’s liability period of a
completed construction work, cause such construction work to be examined by a technical employee as to whether
it conforms to the approved drawing, design or specifications and a work completion report to be prepared.
• If necessary, the chief himself or herself may examine the matter referred to in the work completion report, or cause
the same to be examined by any technical employee or a team of technical employees.
• If the above examination is not completed within 45 days such construction work shall be deemed to have ipso facto
been accepted.
• In so examining or causing to be examined, if such a construction work is found to have been constructed as per the
approved drawing, design or specifications, he or she shall approve the work completion report, and give
information of the work completion to one level higher authority.
• Once the work completion report is accepted, the public entity shall issue the work completion certificate to the
concerned construction entrepreneur.
STEP: 18
FINAL PAYMENT
• Once the public entity has accepted the work completed as per the procurement contract, the final payment shall be
made to the supplier, construction entrepreneur, service provider or consultant as per the conditions of the contract.
• In making final payment, in the case of a construction work, the performance security and 50 % amount of the
retention money deducted shall be returned after the expiry of the defect’s liability period.
• The remaining 50 % amount of the retention money shall be paid after the concerned supplier, construction
entrepreneur or service provider has submitted documentary evidence showing the submission by him or her of tax
returns to the concerned Inland Revenue Office.
• Provided that if the concerned construction entrepreneur does not rectify the defects within the defect’s liability
period, the public entity may rectify the defects by using the retention money or the amount for security.
STEP: 19
DISPUTE SETTLEMENT
• Any dispute arising between the Public Entity and the construction entrepreneur, supplier, service provider or
consultant in connection with the implementation of the procurement contract shall be settled amicably.
• If could not be settled as above, go for arbitration as per relevant prevailing laws as mentioned in the procurement
agreement.
STEP: 20
TERMINATION OF PROCUREMENT CONTRACT
TERMINATION BY THE PUBLIC ENTITY

• Grounds in which such contract may be terminated shall be provided in the contract, which may be as follows:
a) If the supplier, consultant, service provider or construction entrepreneur breaches the procurement contract or
does not complete the contract or mis utilize the advance amount,
b) If inconvenient for public interest i.e. termination by convenience,
c) Force majeure,
d) Grounds that a supplier, consultant, service provider or construction entrepreneur may terminate the procurement
contract.

• A procurement contract shall include along with the following matters the provision of financial settlement and
compensation to be made in the event of termination of the procurement contract:
a) If payment is remaining to be made for the value of work, supply or service that has already been satisfactorily
completed, payment thereof,
b) Liability to be borne by a defaulting supplier, consultant, service provider or construction entrepreneur for the
increased cost to be incurred by the Public Entity to carry out or cause to be carried out the work under the
procurement contract,
c) Amount of the actual loss sustained by the supplier or consultant or service provider or construction entrepreneur
due to the termination of procurement contract by the Public Entity without any default on his/her part.
• If it is found that the work has not been started or work is left unfinished or work progress is not as per agreement,
such procurement contract may be terminated at any time and, whole of the performance guarantee amount shall be
confiscated.
• For completion of works terminated as above, out of next lowest bidders selected financial bids may be obtained by
providing 15 days period and allocate the work.
TERMINATION ON THE GROUND OF CONVENIENCE
• Unless otherwise provided in the procurement contract, for public interest, the Public Entity may terminate a
procurement contract on the grounds of convenience.
• Where a procurement contract has been terminated, the Public Entity shall have to pay the value for the following
work that has been completed prior to the termination of the said contract:
a) Payment due in case of incomplete work,
b) Where expenditure is to be paid on reimbursement basis, such expenditure as actually incurred,
c) The price of the goods specially manufactured for the Public Entity under the procurement contract,
d) Excluding the lost profit and the amount, the expenditure incurred for termination of the procurement contract, and
e) Other expenditure as prescribed.
TERMINATION BY THE SUPPLIER, CONSULTANT, SERVICE PROVIDER OR CONSTRUCTION
ENTREPRENEUR
• Procurement contract shall not be terminated unless a notice is provided to the public entity.
STEP: 21
REMEDY ON TERMINATION OF PROCUREMENT CONTRACT
• As specified in the procurement contract.

• Where the public entity has terminated the contract on the ground of convenience for public interest it shall pay the
following amount to the concerned supplier, construction entrepreneur, consultant or service provider. In making such
payment, payment shall be made only after deducting the advance amount, if any, paid to him or her:
a) Payment of the amount, if any, due and payable for the work, supply or service that has been completed
acceptably,
b) The price of the goods manufactured for the purpose of the public entity as per the procurement contract,
construction materials brought onto the construction site,
c) A reasonable cost to be incurred for the removal of equipment from the construction site,
d) Repatriation expense for expatriate employees employed only in the construction work, and
e) If necessary, cost for safety and protection of the construction work.
• The public entity shall accept the goods prepared and to be prepared for shipment within seven days of the receipt by
the supplier of the notice given by it for termination of the procurement contract on the ground of convenience subject
to the conditions and price of such a contract.
• In respect of the goods other than those mentioned above, the public entity may do the following:
a) To get any portion of the goods to be completed and obtain the same on the conditions and at the price set out
in the procurement contract, or
b) To cancel the supply order of remaining goods, and make payment of an amount agreed by mutual consent to
the supplier for the goods or services partially prepared by him or her and materials or spare parts purchased
by him or her prior to termination of contract.
• The remedies may include the following remedies, in addition to those set forth in Section 59 of the Act:
a) To reject defective work,
b) To immediately remove defective goods and require the concerned supplier, construction entrepreneur, service
provider or consultant to make replacement,
c) Liquidated damages for delay in performance,

d) To terminate the contract and have such work completed at the expense of the defaulting supplier, construction
entrepreneur, service provider or consultant,
e) Remedies for consequential damages, and
f) Such other remedies as may be available pursuant to the prevailing laws or the procurement contract.
• A procurement contract may contain the following provisions in relation to liquidated damages:
a) In the event of non-completion of a work set forth in the procurement contract within the period set forth in the
contract owing to delay caused by the construction entrepreneur, supplier, service provider or consultant, such
entrepreneur, supplier, provider or consultant shall pay liquidated damages in a sum to be set by zero decimal
zero five percent of contract price per day but not exceeding ten percent of the contract price to the public
entity.
Provided that such entrepreneur, supplier, service provider or consultant shall not be liable to pay such
liquidated damages when the delay in performance or delivery is due to a force majeure event or without the
fault or negligence on his or her part, and
b) That the concerned construction entrepreneur, supplier, service provider or consultant shall not be relieved of
the liability to perform the work set forth in the procurement contract by virtue of payment of liquidated
damages referred to in Clause (a).
PROVISIONS RELATING TO CONDUCT
CONDUCT OF THE OFFICIAL INVOLVED IN PUBLIC PROCUREMENT PROCEEDINGS

Any officials involved in the act of formulating procurement plan, operating procurement proceedings, implementing
procurement contract or other act as prescribed relating to procurement of the Public Entity, shall have to follow the
following conduct:
a) Discharging one's duty impartially so that bidders fairly compete in the procurement proceedings,
b) Operating procurement proceedings in public interest,
c) Not committing an act conflicting interest with the procurement from his/her work or conduct or behavior,
d) Keeping confidential all proprietary information of the bidder known by him /her in the course of the procurement
proceedings,
e) Not working with a person, firm, organization, company and any other institution of private nature with which s/he
had had dealings of procurement at the time of holding post for two years after retirement,
f) If s/he knows that his/her nearest relatives have participated as a bidder or proponent in the procurement proceedings
of his/her involvement, not taking part in such procurement proceedings by giving immediate notification to one
level higher authority,
Explanation: For the purpose of this clause nearest relative means husband, wife, father, mother, son, daughter of
a joint family, mother-in-law, father-in-law, elder brother, younger brother, elder sister, younger sister, son-in-law,
sister-in-law or brother-in-law.
g) Not committing an act in contravention of prevailing law, while carrying out procurement proceedings,
h) Not committing corrupt or fraudulent practice nor involving in such act,
i) Not colluding or involving in a group prior to or after submitting bid or proposal with the objective of forbidding
or causing to be forbidden the benefit of competition.
CONDUCT OF BIDDER OR OPPONENT
A bidder or proponent shall not carry out or cause to be carried out the following act with the intention of making
interference in the procurement process or the implementation of procurement contract:
a) Giving or offering directly or indirectly improper inducement,
b) Submitting a fact by distortion or misrepresentation,
c) Engaging in corrupt or fraudulent practice or involving in such act,
d) Intervening in the participation of other competing bidder or proponent to be involved in any way in the proceedings
relating to bid or proposal,
e) Commit an act of threatening directly or indirectly to cause harm to the body, person or property of any person to
be involved in the procurement proceedings or coercive act,
f) Making collusion or involving in groupism prior to or after submission of bid or proposal with the objective of
allocating procurement contract among the bidders or proponents or fixing the price of bid or proposal artificially
or noncompetitively or otherwise forbidding the Public Entity of the benefit of open and free competition,

g) Contacting the Public Entity from the time of the opening of bid or proposal until the notice of acceptance of bid or
proposal is given with the objective of causing interference upon bid or proposal or committing an act of interference
in the examination or evaluation of bid or in the evaluation of proposal.
INTEREST
• A bidder responsible for preparing bidding documents or specifications of a procurement contract or for supervising
the implementation procurement contract or a person or firm or organization or company affiliated with him/her, or
an employee working in such firm or organization or company cannot participate in the bidding proceedings of such
procurement.
Provided that this provision shall not be applicable in the case of a turnkey procurement contract or procurement
contract so concluded as to carryout both the design and construction work.
PROVISIONS RELATING TO BLACKLISTING
REASONS FOR BLACKLISTING

• The Public Procurement Monitoring Office may blacklist a bidder, proponent, consultant, service provider, supplier,
construction entrepreneur or other person, firm, organization or company in the following grounds from one year to
three years on the basis of seriousness of his/her/ act:
a) If it is proved that s/he has committed an act contrary to the conduct,
b) If a proponent of a proposal selected for acceptance does not come to sign the contract,
c) If it is proved latter that s/he had committed substantial defect in implementing procurement contract or had not
substantially fulfilled obligation under the contract or the work carried out according to the procurement contract
is not of the quality as per the said contract,
d) If convicted from a court of law in a criminal offense liable to be disqualified for taking part in procurement
contract,
e) If s/he/it is proved of having signed the procurement contract by falsifying qualification or misrepresenting,
f) Any other conditions as prescribed.
• A bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person, firm,
organization or company blacklisted shall be debarred from taking part in the procurement proceedings of a Public
Entity up to that period.
PROCEDURES FOR BLACKLISTING
• If the public entity is required to blacklist any bidder, proponent, consultant, service provider, supplier, construction
entrepreneur or other person, firm, organization or company, it shall make a submission to the Public Procurement
Monitoring Office, accompanied by detailed description pertaining thereto and reasons for the same and relevant
documents, as well.
• When a submission is made, if, having regard to such description, reasons and documents, the Public Procurement
Monitoring Office is of the opinion that such bidder, proponent, consultant, service provider, supplier, construction
entrepreneur or other person, firm, organization or company should be restrained immediately from taking part in
public procurements for three years.
• If the Public Procurement Monitoring Office makes a decision to impose restraint as above, it shall give a notice to
the concerned bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person,
firm, organization or company no later than seven days of such decision and publish a notice publicly.
• The Public Procurement Monitoring Office shall send to his or her office or house a three-day written notice,
accompanied by the description, reasons and copies of documents so received, requiring him or her to submit grounds
or explanations, if any, for not being blacklisted.
• Upon receipt of a notice, the concerned bidder, proponent, consultant, service provider, supplier, construction
entrepreneur or other person, firm, organization or company shall submit to the Public Procurement Monitoring Office
his or her explanation along with relevant documents, setting out the grounds and reasons, if any, for not being
blacklisted.
• In submitting explanation, the concerned bidder, proponent, consultant, service provider, supplier, construction
entrepreneur or other person, firm, organization or company may request the Public Procurement Monitoring Office
to make joint hearings between him or her and the concerned public entity.
• If a request is made for joint hearings and the Public Procurement Monitoring Office considers appropriate to so make
hearings, it shall send a written notice indicating the place and time for making such hearings to the concerned public
entity and the bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person,
firm, organization or company.
• The public entity and the bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other
person, firm, organization or company receiving the notice shall appear before the Public Procurement Monitoring
Office within the period specified.

• If both parties appear within the period referred, the Public Procurement Monitoring Office shall provide both parties
with an opportunity to present their respective written or oral explanations and statements. Provided that, hearings
shall not be prevented only by the reason the any party is absent.
• Having regard to, inter alia, the hearings, if any, held, and based on the documents submitted by the public entity and
the concerned bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person,
firm, organization or company, the Public Procurement Monitoring Office shall make decision to or not to blacklist
him or her.
• If the Public Procurement Monitoring Office makes a decision to blacklist, it shall give written information thereof to
the concerned public entity and the bidder, proponent, consultant, service provider, supplier, construction entrepreneur
or other person, firm, organization or company and publish it in a newspaper of national circulation.
• If the Public Procurement Monitoring Office makes a decision not to blacklist, the restraint, if any, imposed shall ipso
facto be lifted, and that Office shall publicly publish information thereof.
• The Public Procurement Monitoring Office shall complete the proceedings relating to blacklisting no later than six
months after the date of receipt of submission pertaining thereto.
DELISTING FROM BLACKLIST
• The Public Procurement Monitoring Office shall set criteria for delisting the name of the bidder, proponent, consultant,
service provider, supplier, construction entrepreneur or other person, firm, organization or company included in the
blacklist.
• If, as per the criteria referred to, any bidder, proponent, consultant, service provider, supplier, construction
entrepreneur or other person, firm, organization or company included in a blacklist has to be delisted from the blacklist,
the Public Procurement Monitoring Office shall make delisting pursuant to the said criteria.
FUNCTIONS, DUTIES AND POWERS OF PPMO
The functions, duties and powers of the Public Procurement Monitoring Office, in addition to the ones referred to
elsewhere in this Act, shall be as follows:
a) To make recommendation to the government of Nepal for reform in the procurement policy or laws in force,
b) To issue technical guidelines and manuals required for implementing this Act for turnkey, EPS, unit rate
agreements, management agreements, etc.
c) To prepare standard model of the standard bidding documents, prequalification documents, procurement contract
document and documents relating to proposal to be used by a Public Entity to conduct procurement proceedings,
d) To collect statistics of procurement proceedings to be operated or operated by a Public Entity and to monitor or to
make or cause to be made technical auditing of whether or not such proceedings are conducted in compliance with
this Act or Regulations or manual, made thereunder,
e) Monitor or cause to monitor after procurement,
f) Prepare records for qualification and experiences of vendors, service providers, manufacturers, etc.,
g) Issue electronic procurement guidelines,
h) If the Public Entity seeks opinion, advice about a matter as referred to in this Act or Regulations, Manuals made
thereunder, to provide opinion, advice,
i) To establish and operate procurement website,
j) To publish a bulletin in order to have made public this Act and the Regulations, Manuals, Technical Notes made
thereunder and public procurement related writings, article, material and similar other matters,
k) To prepare procedures required for coordination in the procurement proceedings and submit to the Government
of Nepal for approval,
l) To make arrangements for regular training program for the bidder or the employee involved or to be involved in
procurement proceedings,
m) To make necessary criteria of exclusion from the blacklist under Section 63 and exclude from such blacklist as
per such criteria,
n) To review, appraise construction works, supply, consultancy service, and other services system in order to make
the procurement system effective, and to solicit regularly suggestion from customers or international organization
and other foreign bodies as per necessity,
o) To prepare plan of domestic or foreign assistance required to systematize and reform procurement system and to
act as the central body for coordinating such assistance,
p) To approve or cause to approve procurement expert,
q) To submit the annual report of the procurement proceedings to the Government of Nepal, and
r) To do other prescribed functions.

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Public Procurement Act and its Rules (Amended up to 2076) – for study purpose only

NOT APPLICABLE FOR

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S. No. Steps Remarks

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• Identify the need for procurement.

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For procurement of goods, construction works or other

bid) nature of work

• Additional goods or services of proprietary nature

For procurement of consultancy services Remarks

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By soliciting competitive proposals (prastab)

Through direct negotiations: • If Procurement Value ≤ 20 lakhs

For procurement of other services Remarks

Direct negotiation If Service fees ≤ 5 lakhs

Repair and maintenance

PROVISION RELATING TO BIDS

PROCESS AND STAGE OF BIDDING

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b) Not submitted within the time frame,

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PROVISION RELATING TO SEALED QUOTATIONS

PROVISION RELATING TO DIRECT PROCUREMENT

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PROVISION RELATING TO CONSTRUCTION WORKS THAT MAY BE CAUSED TO BE CARRIED OUT

PROVISION RELATING TO FORCE ACCOUNT

PROVISION RELATING TO WORK MAY BE CAUSED TO BE CARRIED OUT BY NGOs

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PROCUREMENT THROUGH LUMP SUM PRICE RATE METHOD

PROCUREMENT THROUGH CATALOGUE SHOPPING

PROCUREMENT THROUGH LIMITED TENDERING

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PROCUREMENT THROUGH BUY BACK METHOD

PROVISION RELATING TO CONSULTANCY SERVICES

REASONS FOR PROCUREMENT OF CONSULTANCY SERVICES

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i) Method for the selection of proposals,

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PROVISION RELATING TO DIRECT PROCUREMENT

PROVISION RELATING TO APPOINTMENT ON THE BASIS OF EXPERTISE

PROVISION RELATING TO RENTING HOUSE AND LAND

PROVISION RELATING TO OBTAINING SERVICE ON CONTRACT

PROVISION RELATING TO REPAIR AND MAINTENANCE

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APPLICATION TO CHIEF OF THE CONCERNED PUBLIC ENTITY

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CONTENTS OF PROCUREMENT CONTRACT

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Other goods and services More than 20 lakhs

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TERMINATION BY THE PUBLIC ENTITY

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