BBA- EVENING

4TH SEMESTER-FALL

Course Name: Production and Operation Management

Topic: PPRA (2004)

Submitted by: Batool Abbas (21) Submitted To: Mr. Omiarullah Khan
 Public Procurement Regulatory Authority (PPRA) 2004

S.R.O. 432(I)/2004.In exercise of the powers discussed by section 26 of the PPRA Ordinance, 2002
(XXII of 2002), the Federal Government has made the following regulations which are as follows:

1. Short title and commencement

(1) These regulations may be called as the Public Procurement Rules, 2004
(2) They shall come in to action immediately.

GENERAL PROVISIONS
2. Definitions:
(1) In these regulations, unless there is anything unacceptable in the context
(a) Bid- A bid is an offer in response to an invitation by an individual or a firm who demonstrates his
or its’ will to take a certain task at a certain price.
(b) Bidder- an individual who submits a bid.

(ba) Call off order- this refers to an order placed under general pricing and terms by a procuring firm on a
variety of products and under closed framework contract, without the need of any negotiation.

(bb) Closed frame agreement- this refers to a contract with specified provisions with an arranged price.

(c) Competitive bidding- It consist of national and international competitive bidding. It’s a process
which leads to the acceptance of an agreement by which all the interested parties may offer for the
agreement.
(d) Contractor- Someone (firm or individual) who accepts to provide products, services and works.
(e) Contract- It is an agreement imposed by law.
(f) Corrupt and fraudulent practices- It consists of give and take of anything valuable in order to impact
the procurement process. Those who get involved in unlawful practices, won’t have access to advantages
of free competition and request for anything valuable.
(g) Emergency- It refers to natural disasters, wars, etc., which may lead to abnormal situation needing
rapid action to prevent destruction to people, their assets and environment

(ga) e-Procurement- It refers to the usage of electronic and ICT methods for procurement procedures.

(gb) Framework agreement- It enables a procuring organization to obtain products, services that are
specified and required constantly over an agreed period through orders.
(h) Most advantageous bid refers to:
An offer which is high in quality, qualification and cost and is as per the qualifications set.

(ha) Open framework agreement- It refers to a contract with certain terms without an agreed price.

i. Ordinance- It’s an authoritative direction

ii. Repeat orders- It refers to obtaining the same product through same source without any competition
and consists improvement of agreements.
iii. Supplier- An organization or a person who accepts to provide products, works or services.

(ka) Unsolicited project proposal- It refers to any offer consisting of inventive ideas and is subject to
competitive selection procedure, challenging the offer in all the financial and technical aspects.

(1) Value for money- It refers to the best yield for every rupee paid in terms of timeliness, price, reliance,
after sales service.

3. Scope and applicability:-

The rules that are provided shall be applicable to all the procurements made by all procuring
organizations of the Federal Government whether inside or outside Pakistan.

4. Principles of procurements:-

Procuring organizations, while involving in acquisitions shall guarantee that they are carried in such a
way, that it brings value for money to the organization is cost-effective.

5. International and inter-governmental commitments of the Federal Government:

Whenever these regulations contradict with a commitment of the Federal Government coming out of an
international pact, the terms of such a pact shall prevail to the degree of such contradiction.
6. Language-

The certifications regarding the procurement shall be in English, Urdu or both. If the organization is
located outside Pakistan and procurements are to be made in the vicinity, domestic language is to used. If
native language is found vital, the original certifications shall be in English or Urdu. In cases of conflict,
references shall be made to the reserved records.

7. Integrity pact

Procurements going above the given limit shall be subject to an integrity pact, which is between the
procuring organization and the contractors.
7A. e-public procurement
The procuring organizations may conduct e-procurement procedures by utilizing ICT or electronic
methods in order to deliver all aspects of the procurement procedure.

PROCUREMENT PLANNING

8. Procurement Planning:-
The procuring organizations will identify and make a plan of all the proposed procurements which
determines the necessities, resources, and advantages they are likely to obtain later on.

9. Limitation on splitting or regrouping of proposed procurement:-

The procuring organizations shall declare in a proper way all projected procurements for every financial
year and go accordingly .The yearly needs will be advertised beforehand on the Authority and procuring
organization’s site.

10. Specifications:-
The terms shall not favor any supplier or contractor, allow competition and won’t disadvantage others. If
the procuring organization finds that the above classifications are vital in completing an incomplete
condition, then such reference will be eligible with the term “or equivalent”.
11. Approval mechanism.-
All procuring organizations shall give clear allocation and approval of powers for various types of
procurements and shall only begin them once the concerned authorities have given approval.

PROCUREMENT ADVERTISEMENTS
12. Methods of advertisement:-

Procurement will be advertised on the Authority’s sites which are above five hundred thousand Pakistani
rupees and till the limit of three million Pakistani rupees. The procurement benefits shall be advertised too
if seemed vital on the site or on other print media in Urdu and English which are above three million
Pakistani rupees. The details shall be complete.

13. Response time:-

The response time may be decided for offers from the date of issue of an advertisement. The response
time won’t be below fifteen days for national competitive and thirty days for transnational competitive
bidding. All the ads shall prescribe the time allowed and enough time shall be given to complete the
requirements.

14. Exceptions:-

The procurement is associated to the national safety which comes under the classification of intellectual
property available from one source.

PRE-QUALIFICATION, QUALIFICATION AND DIS-QUALIFICATION OF

SUPPLIERS AND CONTRACTORS

15. Pre-qualification of suppliers and contractors.-

A procuring organization, may involve in pre-qualification of buyers to make sure that only financially
and technically stable organizations are invited to present bids. Factors like their financial position,
managerial ability, and past performance is considered.

16. Pre-qualification process:-

The procuring organization shall publicize all the facts needed for the pre-qualification certifications.
These shall be presented to any contractor on demand. The organizations shall instantly inform the
contractor the names of all the pre-qualified ones with the reasons for not prequalifying any.

16A. Procurement of common use items, services and commodities through framework
agreements.-

The proposal of products whose market prices vary shall be organized. Open and close structure contracts
will be made with the chosen contractors.

16B. Price adjustment for framework agreements.-

The organization shall approve an offer to make price variation and make a distinction of the prices
requested and give an explanation of such variation.

17. Qualification of suppliers and contractors.-

At any level, of the procurement procedure, a procuring organization having reasons for any defect in
contractor’s abilities may need the contractors to give information relating capability regardless being
pre-qualified or not.
18. Disqualification of suppliers or contractors:-

The contractor shall be disqualified by the procurement organization, if it finds that the detail presented
by him relating his qualification as contractor was fake and unfinished.

19. Blacklisting of suppliers and contractors:-

The procuring organization shall prescribe a procedure to momentarily or permanently prohibit

contractors who are caught getting involved in unethical activities which shall be presented to the
authority. The dealer shall be given the chance to being heard.

METHODS OF PROCUREMENT
20. Principal method of procurement:-

The open competitive bidding shall be utilized by the procuring organizations as the principal method of
procurement for the obtaining of products and services.

21. Open competitive bidding

The procuring organizations shall involve in open competitive bidding if the expense of the product to be
obtained is above the specified limit.

22. Submission of bids.-

The offers shall be presented in a package in which the items are complete sealed and can’t be known
unless they’re opened.

23. Bidding Documents:-

The bidding records shall be clearly made by the procuring organizations which will be presented to the
bidders instantly after the issue of the invitation to offer. For open or limited competitive bidding, the
bidding record shall consist of an invitation, guidelines, application, specifications, product list, time,
calculation standards, and layouts of bids. Details should be provided on time and given to contractors.

24. Reservations and preferences:-

All potential bidders are to be allowed to engage in procuring process regardless of their nationality,
except in situations in which any procuring organization agrees to limit such involvement to national
bidders or bar some nationalities.
25. Bid security:-

The bidders are needed to supply a bid security not above 5% of the bid price.

26. Bid validity:-

The procuring organization shall subject the offer, to bid validity period under the compulsion to calculate
the offer in the specified bid validity period. If an extension is deemed vital, all those who have presented
their offers shall be requested to extend their bid validity bid. Bidders who:-
(a) Approve to extension of their bid validity period should extend the validity of the bid bond for the
extended period of the bid validity and shall not be allowed to alter the content of their offer.
(b) Don’t accept to an extension of the bid validity period shall be permitted to remove their offers
without penalization of their offer securities.

27. Extension of time for submission of bids:-

If the limit for the submission of offers is set by the procuring organization then any extensions will be
followed by writing its reasons and. Advertisements will be made as per the original ad.

OPENING, EVALUATION AND REJECTION OF BIDS

28. Opening of bids:-
Same dates will be set for the opening and the last date for the presentation of offers which is at least 30
minutes after the deadline for the presentation of offers. All offers shall be opened in public at the place
and time declared before the bidding. The unit price and the bid amount shall be announced loudly and
the minutes of the bid opening are to be recorded. All offers presented after the time specified shall not
be considered and given back without being opened.

29. Evaluation criteria:-

A proper calculation standard shall be set by listing all the important details on the basis of which an offer
is to be calculated. If this fails to happen then it shall amount to miss-procurement.

30. Evaluation of bids:-

All the offers shall be calculated as per the standard set in one currency in order to compare the offers
quoted in various currencies. The exchange rate shall be the selling rate, existing on the date of opening
of offers as informed by the State bank of Pakistan that day.
31. Clarification of bids:-
No bidder shall be permitted to change his tender after it’s been opened and clarifications to the bid that
doesn’t alter the content of the bid are approved if it’s in writing.

32. Discriminatory and difficult conditions:-

The procuring organizations cannot lay out any terms that differentiate bidders or that are fulfilled with
difficulty. In determining such term, reference shall make to the practices of that business to which that
specific procurement is associated with.

33. Rejection of bids:-

Proposal may be rejected by the procuring organization and reasons shall be stated to the contractor who
presented the offer but explanation won’t be provided instantly.

34. Re-bidding:-
The procuring agency may call for re-bidding if all the tenders have been rejected. The reasons, terms and
calculations may be examined for bidders.

35. Announcement of evaluation report:-

The outcomes of the bid calculation shall be declared by the procuring organization for the approval and
rejection of tenders at least ten days before the acceptance of the procurement contract.

36. Procedures of open competitive bidding:-

The following processes shall be allowed for open competitive bidding:

(a) Single stage-one envelope procedure

Every tender shall consist of one single envelope, separately having financial and technical offer. The
tenders received shall be opened and calculated in the way specified in the bidding certifications.

(b) Single stage-two envelope procedure

The tender shall consist of one package having two separate envelopes encompassing the financial and
technical tender respectively. The envelopes shall be noted in bold letters as “FINANCIAL PROPOSAL”
and “TECHNICAL PROPSAL” in order to evade misinterpretation. At first, the “TECHNICAL
PROPOSAL” envelope shall be opened and the latter shall be under the supervision of the procuring
organization without being opened. The technical proposal shall be calculated in the way specified and no
changes in it shall be allowed. The financial proposals of tender shall be opened in public at a date, place
and time declared and stated to the bidders beforehand. After the acceptance of the technical proposal
within the bid validity period, the financial proposals of the technically approved tenders shall be opened
at a time in public. Those that are technically non-responsive shall be given back to the bidder without
being opened and the most advantageous bid shall be approved.
(c) Two stage bidding procedure:-

First stage

The bidders shall first present the technical proposal .The technical proposal shall be calculated as per the
calculation standard and discussions regarding inadequacies shall be done. After the discussion, all the
bidders shall be allowed to review their own technical proposals in order to fulfill the needs of the
procuring organization. The calculation standard and technical requirements may be altered and reviewed
by the procuring agency and new standards may be added. These stated to all the bidders at the time of
invitation to present final offers, and adequate time is given to prepare their reviewed offers. Bidders not
conforming to the specifications may be permitted to remove from their bidding without penalization of
their bid security.

Second stage:

Bidders whose technical bids have been approved shall be summoned to present an amended technical bid
with the financial one which shall be opened at a date, place and time declared and stated to the bidders
beforehand. They shall be calculated in the way specified above. The most beneficial proposal shall be
approved.

(d) Two stage-two envelope bidding procedure:-

First stage

The tender shall consist of one package having two separate envelopes encompassing the financial and
technical tender respectively. The envelopes shall be noted in bold letters as “FINANCIAL PROPOSAL”
and “TECHNICAL PROPSAL” in order to evade misinterpretation. At first, the “TECHNICAL
PROPOSAL” envelope shall be opened and the latter shall be reserved under the supervision of the
procuring organization without being opened. With regards to the technical requirements, the technical
bid shall be discussed with the bidders. Those bidders agreeing to fulfill the specifications shall be
permitted to review their technical bids. Those not agreeing shall be permitted to remove their tenders
without penalization of their bid security.
Second stage
The bidders conforming to the requirements and whose offers have not been rejected shall present a
reviewed technical proposal and supplementary financial one as per the technical needs. These shall be
opened at a time, place and date declared by the procuring organization beforehand. The whole proposal
shall be calculated by the procuring agency beforehand as per the standard and the tender most
advantageous shall be approved.

37. Conditions for use of single stage two envelope, two stage and two stage two envelope bidding
procedures.-

The single stage one envelope bidding process shall generally be competitive bidding process used for
several procurements. Other processes of open competitive bidding shall be chosen under the following
situations:-

(a) If the tenders are to be calculated on technical and financial rules and price is considered after
technical calculation, single stage two envelope bidding process shall be used;
(b) If large and complex agreements, and there are two or several appropriate technical solutions to it,
then two stage bidding process shall be used.
(c) In cases where various technical bids are possible then two stage two envelope bidding process shall
be used.

37(A). Unsolicited Proposal:-

It is a proposal received by the procuring organization from any person or organization that shall be
evaluated by the assessment committee. If it’s found operable, the procuring organization shall advertise
the tender. The proprietary details shall remain private until it’s written by the originator.

ACCEPTANCE OF BIDS AND AWARD OF PROCUREMENT CONTRACTS

38. Acceptance of bids:-

The bidder having the most advantageous offer shall be given the procurement deal within the extended
or initial period of bid validity if it’s not in disagreement with any principles lay by the Federal
Government.
38A. Bid Discount.-

The bidder may give unconditional rebate in percent of their state price before opening the financial
tender which shall be taken as the original offer for calculation and not be accepted after the tenders are
opened.

38B. Single responsive bid in goods, works and services.-

The procuring organization shall accept single bid if it fulfills the requirements mentioned in bid
solicitation certifications, and has financial conformance relating rate reasonability.

39. Performance guarantee:-

Wherever required in the bidding certifications, successful bidder shall be asked to clearly provide a
performance guarantee which shall not go above ten percentage of the contract amount.

39A. Letter of credit:-

Wherever needed, the procuring organization may include the supply of International Chamber of
Commerce and the letter of credit, where custom clearance, procurement risk regarding quality and
delivery methods is included.

40. Limitation on negotiations.-

The procuring organization may negotiate with the successful bidder on methods and specification on the
agreement. The kinds and limits of the negotiations on the procurements will be decided by the authority.
41. Confidentiality:-

Until the time of announcement of the calculation report all the details relating the bid calculation shall be
kept private by the procuring organization.

42. Alternative methods of procurement:-

The following various methodologies of procurement of products or services shall be used by a procuring
organization:-

(a) Petty purchases:-

The procuring organization via single quotation, may fund for petty purchases, where value of the item
obtained is as per the financial limit of one hundred thousand Pakistani rupees and the agreement for the
funding of such products or works may be a domestic purchase order.
(b) Request for quotations:-
A procuring organization shall involve in this methodology where the amount of procurement is above
one hundred thousand Pakistani rupees but doesn’t go above five hundred thousand Pakistani rupees, the
product of procurement has standard prescriptions, at least three quotations have been gathered; and the
product of the procurement is bought from the contractor at the lowest price.
(c) Direct contracting:-

The procuring organization shall involve in direct contracting if the acquisition is related to the purchase
of spare parts from the original contractor, only a single contractor is present for the procurement, where a
change of contractor would oblige the organization to purchase resources consisting of various technical
requirements and repeat orders not going above 15% of the original procurement, when the amount of
products is fixed by the authority and for acquisition of motor vehicles from domestic original producers.

(d) Negotiated tendering:-

The procuring organization shall involve in the negotiated tendering with one or several contractors with
or without issue of procurement notice beforehand. This process shall be used under the following cases:-

(i) The materials used are produced only for the aim of supporting a particular piece of research and
development.
(ii) The materials may be produced or delivered by one contractor for security purposes.
(iii) In cases of emergency, the time limits set for open and limited bidding methodologies can’t be met.

43. On account payment:-

The procuring organizations shall make immediate payments against their bills in the time stated to the
contractors as specified that it won’t go above thirty days.

44. Entry into force of the procurement contract:-

Procurement should come into force where the procuring organization needs the signature of a written
agreement, from the date the purchase order has been allotted to the bidder whose offer has been
approved.

45. Closing of contract:-

Except for any defect by the dealer as mentioned in the terms of the agreement, it shall be considered
close on the publication of the delivery document which shall be publicized in thirty days of final
acquisition of products allowing the dealer to present the final invoice and the auditors to review.
 MAINTENANCE OF RECORD AND FREEDOM OF INFORMATION
46. Record of procurement proceedings:-
All the procuring organizations shall keep the record of their own procurements procedures
besides the records for at least five years which shall be as per the rules.

47. Public access and transparency:-

As soon as an agreement has been accepted the procuring organization shall arrange all the records
regarding the calculation of the tender and its acceptance. The revealing of any detail held back if the
organization thinks that the disclosure is against the interest of public.

REDRESSAL OF GRIEVANCES AND SETTLEMENT OF DISPUTES

48. Redressal of grievances by the procuring agency.-

The procuring organization shall establish a committee consisting of odd number of people, to report the
issues of bidders’ .Those bidder who are in conflict by the activities of the procuring organization may
submit a written complaint regarding his issues not after fifteen days after the declaration of the offer
calculation report.

49. Arbitration:-

After getting into force, conflicts amongst the groups shall be resolved through arbitration through a
methodology conforming to the rules of Pakistan.

50. Mis-procurement:-

Violations of these regulations shall amount to mis-procurement.

51. Overriding effect:-

The requirements of these regulations shall have no impact public procurements. The current principle
and processes will be valid for the acquisition of products or services for which notice for invitation of
bids had been publicized.