Day 1-

SESSION I:

PROCUREMENT
PRINCIPLES,
REGULARATORY
B2 TRAINING ON PROCUREMENT OF WORKS AND CONSULTANCY
FRAMEWORK AND SERVICES

PUBLIC IPFMRP – CDP Project

PROCUREMENT
INSTITUTIONS
  Principles and Philosophy of Public Procurement
 Legal Framework and Overview of preparation
of procurement proceedings : Requisition,
Technical Specification, Packages, Estimation,
Methods, Bidding Procedures, Evaluation,
Review , Procurement contract
Presentation  Provision Relating to Monitoring :Procurement
Outlines Activities under Special circumstances,
conditions for law not applicable, Conduct and
blacklisting etc.
 Public Procurement Institutions : Procurement
Unit, Public Procurement Monitoring Office and
Review Committee: Structure and Functions

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WHY PUBLIC PROCUREMENT PRINCIPLES ?
 Enable to make understand the set the
framework for managing public procurement
requirements, and also within which procurement
practitioners must work.
 Practitioners : A clear understanding of public
procurement principles and internalise them so that they
serve as guiding principles in our decision-making process.
 Integration of principles into work ethics, the
outcome of our decisions will always be in line with public
procurement principles.
BASIC PRINCIPLES OF PUBLIC PROCUREMENT
 Transparency: Information made available to
all public procurement stakeholders: contractors,
suppliers, service providers, and the public at
large about the laws, regulations, institutions,
processes, plans and decisions are made
accessible to the public ( Consider Right to
Information)

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BASIC PRINCIPLES OF PUBLIC PROCUREMENT
 Integrity: procurement processes are honest
and in compliance with the respective laws,
employment of best available and most
suitable technical expertise in a non-
discriminatory manner.

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BASIC PRINCIPLES OF PUBLIC PROCUREMENT
• Openness: Open to all qualified organizations
and individuals, Access to information
pertaining to public procurement
requirements
• Openness through: Bid notice, Bid documents,
Qualification and Evaluation Criteria, Review,
Letter of Intent, Website notice, publication of
award notice, Contract, debriefing etc.

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BASIC PRINCIPLES OF PUBLIC PROCUREMENT
Fairness : Treating all bidders equally,
decisions/ actions unbiased, No preferential
treatment , No rejection except stipulations
of the solicitation documents and law, right
to challenge the procurement process for
unfairly treated cases

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BASIC PRINCIPLES OF PUBLIC PROCUREMENT
 Economy /Efficiency/ value for money =>
commercially reasonable price
 Basic Principle: manage public funds with
care and due diligence so that prices paid
for goods, services and works are
acceptable and represent good value for the
public funds expended on them.

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BASIC PRINCIPLES OF PUBLIC PROCUREMENT
 Accountability (Principal-Agent Theory):
Governments, public and various other
agencies (Agent) acting on Peoples
(Principal) behalf must be accountable for
the correct and complete execution of their
tasks and duties and for the decisions and
actions being made in their area of
responsibility.

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GOVERNING PUBLIC PROCUREMENT LAW
 Public Procurement Act (PPA), 2063 (2007)
effective from 2063/9/30 and Three
Amendments First, Second and Third
respectively on 2072/11/13,2 073/3/30,
2075/11/19
 Public Procurement Regulation (PPR), 2064
(2008) Effective from 2064/5/3 - Tenth
Amendment recently-Baishak 2077 ( specially
some provisions of Time extention)
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PUBLIC PROCUREMENT ACT-PREAMBLE
 Make legal provisions in order to make the
procedures, processes and decisions : public
procurement much more open, transparent,
objective and reliable,
 Obtain the maximum returns of public
expenditures in an economical and rational
manner by promoting competition, fairness,
honesty, accountability and reliability in public
procurement processes, and;

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PUBLIC PROCUREMENT ACT-PREAMBLE
 Ensure good governance by enhancing the
managerial capacity of procurement of
public entities in procuring, or causing to be
procured, construction work and goods,
consultancy services and other services
 Ensure equal opportunity: producers, sellers,
suppliers, contractors or service providers to
participate in public procurement processes
without any discrimination;

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PPA-PROCUREMENT & PUBLIC ENTITIES
“Procurement” means acquisition of any goods,
consultancy services or other services or carrying out or
causing to be carried out any construction works, by a
public entity pursuant to this Act; (PPA-Clause 2 a)
“Public Entity” means the following entity:
(1) Constitutional organ or body, Court, Ministry,
Secretariat, Commission, Department of Government of
Nepal or provincial Government or any other
Governmental Entity or Office thereunder,

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PPA-PROCUREMENT & PUBLIC ENTITIES
(2) Corporation, Company, Bank or Board owned or
controlled fully or in majority by the Government of
Nepal or Commission, Institute, Authority, Corporation,
Academy, Board, Center, Council established at the
public level or formed by the Government of Nepal or
provincial Government under the laws in force and
other corporate body of a similar nature,

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PPA-PROCUREMENT & PUBLIC ENTITIES
(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 provincial Government, and other
Academic or Educational Institution of a similar
nature,
(4) Local body,

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PPA-PROCUREMENT & PUBLIC ENTITIES
(5) Development Board formed under the
Development Board Act, 1956,
(6) Body operated with loan or grant of the
Government of Nepal, or provincial
Government and
(7) Other Bodies as specified by the
Government of Nepal or provincial
Government by publishing a notification in
the Nepal Gazette, as a Public Entity;

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 “CONSTRUCTION WORK”
 Work such as 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;

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PROCUREMENT SHOULD COMPLY PUBLIC
PROCUREMENT ACT (CL. 3)
 Public Entity shall have to make procurement by complying
with the procedures set out in this Act.
 The Institutions registered as per the prevailing law should
comply the procedures set out in the Act to the extent they
procure using the public fund.
 The Public Fund denotes the Consolidated Fund of Federal,
Provincial and Local Government and it also refer to the
other government funds formed under prevailing law (Rule-
2 Ma)
 Any procurement made in such a manner as to be contrary
to this shall be void and invalid.
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RESPONSIBILITY FOR PROCUREMENT AND
PROCUREMENT METHODS
 Description of Construction Works to be Prepared :
Prepare a specifications, plan, drawing, design, special
requirement or other descriptions => On the basis of
relevant objective technical and quality characteristics
and functions of construction works (Cl.4)

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RESPONSIBILITY FOR PROCUREMENT AND
PROCUREMENT METHODS
 Bidding or Prequalification Documents: Description
of the technical or quality characteristics of the
construction works and requirements or symbols or
terminologies relating to testing, marking, packaging,
labeling or conformity certificate, no description,
requirements, symbols or terminologies can be so
mentioned

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RESPONSIBILITY FOR PROCUREMENT AND
PROCUREMENT METHODS
 Cost Estimate to be Prepared (Cl. 5): A Public
Entity shall have to prepare a cost estimate as
prescribed for any procurement whatsoever.
Provided that a cost estimate shall not be
required for any procurement valuing up to 0.1
million rupees, except construction works. Such
cost estimate should be updated.

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RESPONSIBILITY FOR PROCUREMENT AND
PROCUREMENT METHODS
 Procurement Plan to be Prepared (Cl.6) :
A Public Entity shall, in making
procurement valued more than 100
million rupees and multi-year project
have to prepare a master procurement
plan and annual procurement plan.

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RESPONSIBILITY FOR PROCUREMENT AND
PROCUREMENT METHODS
Responsibility Towards Procurement Activities (Cl.7):
 Public Entity Chief : responsible for preparing a
procurement plan and carrying out or causing to be
carried out all other activities relating to procurement to
be made by fulfilling the procedures of the law.

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RESPONSIBILITY FOR PROCUREMENT AND
PROCUREMENT METHODS
 Responsibility Towards Procurement Activities
(Cl.7):
 Qualified Employees in carrying out procurement
related activity and has the qualification prescribed
by the PPMO and has knowledge or training on
procurement business.

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RESPONSIBILITY FOR PROCUREMENT AND
PROCUREMENT METHODS
 Responsibility Towards Procurement Activities
(Cl.7):
 Procurement Unit: Public Entity shall establish a
procurement unit and assign the responsibilities
thereof in order to carry out the prourement:

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PROVISION RELATING TO CONDUCT
Conduct of the Official Involved in:
Formulating procurement plan, operating
procurement proceedings, implementing
procurement contract.

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PROVISION RELATING TO CONDUCT
Conduct: impartially, fairly, in public interest, conflicting
interest from work or conduct or behavior, keeping
confidential all proprietary information, not to involve in
procurement proceedings having participation of nearest
relatives, Work against in contravention of prevailing law
and not to commit corrupt or fraudulent practice and
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.

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PROVISION RELATING TO CONDUCT
 Conduct of Bidder (Sec 62): intention of
making interference in the procurement
process , Giving or offering improper
inducement,
 Submitting a fact by distortion or
misrepresentation, Engaging in corrupt or
fraudulent practice , Intervening in the
participation of other competing bidder or
proponent to be involved in any way in the
proceedings relating to bid or proposal,
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PROVISION RELATING TO CONDUCT
 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,
 Making collusion or involving in groupism
prior to or after submission of bid or proposal

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 PUBLIC PROCUREMENT MONITORING OFFICE
(SEC. 64)

• PPMO established with respect to public

procurement law of Nepal as the government
agency on 2064/05/03(B.S.), is under the Prime
Minister’s Office.
• It’s vision is to ensure good governance in the
procurement system of the public entities in
Nepal.

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 FUNCTIONS OF PPMO
 Reform in the procurement policy or laws in
force, Issue technical guidelines and manuals
 Prepare standard model of the SBDs, RFPs
 Collect statistics of procurement proceedings
and to monitor or to make or cause to be made
technical auditing
 Provide opinion, advice to PE about
procurement law
 Operate procurement website, Publish a bulletin
 Prepare procedures required for coordination in
the procurement proceedings and submit to the
GoN for approval 31
 FUNCTIONS OF PPMO
• To make arrangements for regular training program for the bidder or the
employee involved or to be involved in procurement proceedings,
• To make necessary criteria of exclusion from the blacklist under Section 63
and exclude from such blacklist as per such criteria
• 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,
• 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,
• Submit the annual report of the procurement proceedings to the GoN
• PPMO shall not involve in any manner in the procurement proceedings,
except the procurement proceedings of its office, of other public entities nor
shall resolve any dispute arisen in respect thereof.
• Work as secretariat of the Review Committee and it shall have to make
arrangements of the budget required for the committee.
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BLACKLISTING AND EXCLUSION FROM THE
BLACKLIST (SEC. 63)
Public Procurement Monitoring Office (PPMO)
may blacklist a bidder, 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:
committed an act contrary to the conduct
If a proponent of a proposal selected for
acceptance does not come to sign the contract

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BLACKLISTING AND EXCLUSION FROM THE
BLACKLIST (SEC. 63) Contd….
 If it is proved that 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,

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 BLACKLISTING AND EXCLUSION FROM THE
BLACKLIST (SEC. 63) Contd….
 If convicted from a court of law in a criminal
offense liable to be disqualified for taking part in
procurement contract,
 If proved of having signed the procurement
contract by falsifying qualification or
misrepresenting,

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BLACKLISTING AND EXCLUSION FROM THE
BLACKLIST (SEC. 63) Contd..
 A bidder, construction entrepreneur shall be
debarred from taking part in the procurement
proceedings of a Public Entity up to that period of
1-3 years

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BLACKLISTING AND EXCLUSION FROM THE
BLACKLIST (SEC. 63) Contd…
 A person, firm, organization or company
blacklisted by a competent authority under
prevailing law for not paying a loan of a bank or
financial institution shall not be eligible to take
part in the procurement proceeding of a Public
Entity during the period of such blacklisting.

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MISCELLANEOUS: SPECIAL CIRCUMSTANCES /
ACT NOT TO BE APPLIED
Provision Concerning Procurement to be Made in
Special Circumstances (Sec 66): where the occurrence
of special circumstance (Earthquake, Drought,
Epidemics or special circumstances) 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.

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MISCELLANEOUS: SPECIAL CIRCUMSTANCES /
ACT NOT TO BE APPLIED
Procurement Process under this Act not to be Applied
(Sec. 67): 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 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. Government of Nepal shall have to
state reasons for procurement and determine separate
procedure related thereto as well.

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 MISCELLANEOUS
Procurement Transaction May be Carried Out Through
Electronic Communications Means (Sec. 69):
Government of Nepal may, by publication of a notice in the Nepal
Gazette, provide a mechanism that the Public Entity may arrange,
through the means of electronic communications:
invite a pre-qualification proposal,
issue notice of bid invitation,
transmit bidding or pre-qualifying documents,
receive bids, proposals for pre-qualification c
include the procurement contract,
make payment and give and receive other notices.

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 MISCELLANEOUS
Legal Documents to be kept in Website (Sec. 70):
For information and convenience of general public,
this Act and Regulations and Procurement Manuals
made thereunder shall be kept in the website of the
PPMO
Records of Procurement Proceedings (Sec. 72/Rule
149): The Public Entity shall have to keep safely the
records of the documents of the procurement
proceedings for a prescribed period ( 7 years after
conclusion of the procurement work)

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 MISCELLANEOUS
Power to Make Rules (Sec. 74): GoN may make
Rules required for implementation of the
objective of the PPA.
Public Entity other than GoN public entity may
make necessary Rules subject to the Act, Rules or
Formation Order relating to such entity.

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 PROCUREMENT UNIT:
ROLE AND FUNCTIONS (SEC.7)
Expenditure and Procurement:
Procurement has made an institutional
arrangement and made responsible for the
procurement activities in which the authority of
expenditure shall be given as per the budget of
given Fiscal Year.

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 PROCUREMENT UNIT:
ROLE AND FUNCTIONS (SEC.7)
Procurement Responsibility:
Public Entity Chief is the main responsible
authority for preparing a procurement plan and
carrying out or causing to be carried out all other
activities relating to procurement to be made by
fulfilling the procedures of Procurement law

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 PROCUREMENT UNIT:
ROLE AND FUNCTIONS (SEC.7)
Professional Approach to Procurement :
PPA has made a provision to have a separate staffs
for carrying out procurement related activity and
qualification has to be fixed by PPMO.
Employees having the the qualification prescribed
by the PPMO and has knowledge or training on
procurement business should carry out
procurement activities in a PE.

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ROLE AND FUNCTIONS OF PROCUREMENT UNIT
Procurement Unit: in every PE and has the
responsibilities to carry out the following acts:

 Preparation of procurement plan ,PQ,

SBDs and procurement contract, Standard
PQ and contract documents EoI /RFP for
consultancy services

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ROLE AND FUNCTIONS OF PROCUREMENT UNIT
Procurement Unit : in every PE and has the
responsibilities to carry out the following acts:
 Publish procurement notice, Issuing and
Forwarding , Receiving and safely keeping
documents / proposals, submitting the PQ, bids
or proposals to the evaluation committee and
submit the evaluated bids for acceptance,

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ROLE AND FUNCTIONS OF PROCUREMENT UNIT
Procurement Unit : in every PE and has the
responsibilities to carry out the following acts:
 Notification, safely keeping the
performance guarantee, the quality
standards , making available documents as
required

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ROLE AND FUNCTIONS OF PROCUREMENT UNIT

Approval from Chief: In carrying out or

causing to be carried out the functions , the
Procurement Unit or the unit to which
responsibility thereof shall carry out the same
with the approval of the chief of the PE.

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ROLE AND FUNCTIONS OF PROCUREMENT UNIT
Some Issues with Procurement Unit:
1. In the procurement unit what level and kind of employees
shall be deputed ?
2. Whether the Financial Administration Chief can be the
member of the Procurement Unit ?
3. If the irregularities occurs in procurement, whether the
procurement unit or the Financial Administration (Account)
Section is responsible for settlement of the irregularities ?
4. Who should head the procurement unit ?

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PUBLIC PROCUREMNT REVIEW COMMITTEE (SEC. 48)
Review Committee Structure:
1. Former judges of the High Court or Judge of the
Appellate Court or the persons retired from the special
class post of GoN -Chairperson
2. Retired gazetted first class post of the Nepal
Engineering Service of the Government of Nepal
-Member
3.Persons having experiences and expertise on public
procurement -Member
Tenure of Committee Members : The tenure of the
chairperson or member shall be three years.
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APPLICATION FILING BEFORE REVIEW
COMMITTEE
A bidder or proponent may file an application for review
before the Review Committee in the following conditions
(Sec. 49)
If the PE chief does not make a decision on the
application filed before the PE in respect of the
procurement proceedings of the amount above 20 million
within 5 days or if the applicant is dissatisfied with the
decision made by him/her,
In the matter of the procurement contract concluded
before the review
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REVIEW COMMITTEE : REVIEW OF METHOD
(SEC. 50)
Filing of Application: A bidder or consultant
shall have to file application during
evaluation process within seven days and in
the case of conclusion of contract within a
period of thirty days from the date of
conclusion of such contract.

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REVIEW COMMITTEE : REVIEW OF METHOD
(SEC. 50)
Notice by Review Committee: Within three
days of the receipt of application the Review
Committee shall notify with 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.
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REVIEW COMMITTEE: REVIEW OF METHOD
(SEC. 50)
 PE Response : Within three days of the receipt
of notice PE shall have to provide to the Review
Committee with information and comments
related thereto.
 Make Decision by Review Committee : Within
thirty days of receipt of the application on the
basis of the information and comments received
, the evidence submitted by the applicant along
with the application and, if necessary, by
hearing both the parties.
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 DECISION BY REVIEW COMMITTEE

Decision by Review Committee

The committee may decide as follows:
Dismissing the application,
In the cases where procurement contract
has not been concluded

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 DECISION BY REVIEW COMMITTEE
Power of Review Committee as follows:
Giving an order to the PE not to commit or make
an unauthorized act or decision or to pursue
incorrect procedure,
Annulling the whole or in part an unauthorized
act or decision made by the PE,
 Re-evaluation due to occurrence of error in its
evaluation, issuing an order for re-evaluation,
citing such error as well, if any, in the evaluation.

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 DECISION BY REVIEW COMMITTEE
 Reasonable amount (quantum meruit) to
Pay: Where a procurement contract has already
been concluded and 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 meruit) to the applicant having regard
to the grievances suffered by the applicant.

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 DECISION BY REVIEW COMMITTEE
 Security Deposit by Applicant:
An applicant filing application for review shall
have to deposit security 1 percent of quoted
amount in the form of cash or acceptable bank
guarantee

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 DECISION BY REVIEW COMMITTEE
Security forfeiture:
In cases where an application is dismissed
such security shall be forfeited.

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WITHHELD PROCUREMENT PROCEEDINGS
BY PE
Procurement Proceedings to be Withheld ( Sec
51):

Upon receipt of the notice of the application for

review filed the PE shall have to withhold
procurement proceedings until the Review
Committee makes a decision in respect of such
application

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WITHHELD PROCUREMENT PROCEEDINGS
BY PE
Not to hold / stop procurement proceedings if:

 there is an urgency to keep the procurement

proceedings continuing due to an important public
interest or
 If the Review Committee fails to make a decision
within the given period
 Where the procurement contract has been
concluded.

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WITHHELD PROCUREMENT PROCEEDINGS
BY PE
 If the Public Entity does not withhold
the procurement proceedings it shall
have to give information there of to the
Review Committee.

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B2 TRAINING ON PROCUREMENT OF WORKS AND CONSULTANCY
SERVICES

IPFMRP – CDP Project

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