Public Procurement Rules Overview

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PUBLIC PROCUREMENT REGIMEPUBLIC PROCUREMENT REGIME
&&
AN OVERVIEW OF PUBLICAN OVERVIEW OF PUBLIC
PROCUREMENT RULES, 2004PROCUREMENT RULES, 2004

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SequenceSequence
• Public Procurement and somePublic Procurement and some
basic Definitions .basic Definitions .
• Principles of ProcurementsPrinciples of Procurements
• Applicability of Procurement LawsApplicability of Procurement Laws
• Methods of Procurement based onMethods of Procurement based on
Financial LimitFinancial Limit
• Steps of Procurement ProcessSteps of Procurement Process

Public Procurement RegimePublic Procurement Regime
• Public Procurement Regulatory Authority(PPRA)Public Procurement Regulatory Authority(PPRA)
was established on 15was established on 15thth
May, 2002.May, 2002.
• PPRA Ordinance, 2002PPRA Ordinance, 2002
• Public Procurement Rules, 2004Public Procurement Rules, 2004
• Six Public Procurement Regulations are notified.Six Public Procurement Regulations are notified.
• Based onBased on UNCITRALUNCITRAL - a model Procurement Law- a model Procurement Law
• Compliance with World Bank and ADBCompliance with World Bank and ADB
Procurement GuidelinesProcurement Guidelines
3

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Public Procurement and some basicPublic Procurement and some basic
DefinitionsDefinitions
Public Procurement:Public Procurement:
Means acquisition of goods, services or construction of
any works financed wholly or partly out of the Public
Fund, unless excluded otherwise by the Federal
Government;
 Goods.
 Works.
 Services(Consultancy, non consultancy).

Goods:Goods:
Means articles and objects of every kind and
description including raw materials, products, equipment,
machinery, spares and commodities in any form and
includes services incidental to installation, transport,
maintenance and similar obligations related to the supply
of goods if the value of these services does not exceed the
value of such goods;
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conceptsconcepts
WorksWorks
Means any construction work consisting of erection,
assembly, repair, renovation or demolition of a building or
structure or part thereof, such as site preparation,
excavation, installation of equipment or materials and
decoration, finishing and includes incidental services such
as drilling, mapping, satellite photography, seismic
investigations and similar activities, if the value of those
services does not exceed that of the works themselves.
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Services:Services:
Means any object of Procurement other than
goods or works;
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Power to exempt(Section 21)
The Authority may, recommended to the Federal
Government that the procurement in the national
interest be exempted from the operation of this
Ordinance or any rule or regulation and Federal
Government on such recommendations shall
exempt it from the operation of the laws and rules
and regulations made there under.
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• “emergency” means natural calamities, disasters,
accidents, war and operational emergency which may
give rise to abnormal situation requiring prompt and
immediate action to limit or avoid damage to person,
property or the environment;
• “lowest evaluated bid” means,-
a bid most closely conforming to evaluation criteria
and other conditions specified in the bidding
document; and having lowest evaluated cost;and having lowest evaluated cost;
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“value for money” means best returns for each rupee
spent in terms of quality, timeliness, reliability, after
sales service, up-grade ability, price, source, and the
combination of whole-life cost and quality to meet
the procuring agency’s requirements.
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Principles of Procurement
 Procurements are conducted in aProcurements are conducted in a fairfair andand
transparenttransparent mannermanner
 the object of procurement bringsthe object of procurement brings value for moneyvalue for money
to the agencyto the agency
 the procurement process isthe procurement process is efficientefficient andand
economicaleconomical..
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conceptsconcepts
Whether following subjects are Procurement?Whether following subjects are Procurement?
• RecruitmentRecruitment
• AuctionAuction
• Lease of land/buildingLease of land/building
• Purchase of land/buildingPurchase of land/building
• Privatization of Units/BanksPrivatization of Units/Banks
– Basic of transparency & open competition should be followed.Basic of transparency & open competition should be followed.
– Financial Control and Budgeting, 2006 issued by Finance Division beFinancial Control and Budgeting, 2006 issued by Finance Division be
consulted.consulted.
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Applicability of Procurement LawsApplicability of Procurement Laws
Scope and Applicability
Public Procurement Rules, 2004 apply to all
procurements made by all procuring agencies of the
Federal Government whether within or outside
Pakistan.
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Procuring Agency:Procuring Agency:
• Any Ministry, Division, Department or any Office
of the Federal Government;
• Any authority, corporation, body or organization
established by or under Federal law or which is
owned or controlled by the Federal Government;
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• Punjab PPRA (Established in 2008)Punjab PPRA (Established in 2008)
• Sindh PPRA (Established in 2010)Sindh PPRA (Established in 2010)
• Baluchistan PPRA (Established in 2012)Baluchistan PPRA (Established in 2012)
• KP PPRA (Established in 2014)KP PPRA (Established in 2014)
• AJK, GB follow Federal PPRA & FATA followsAJK, GB follow Federal PPRA & FATA follows
Governor Directives.Governor Directives.
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RegulationsRegulations making powers are derived from Section 27 ofmaking powers are derived from Section 27 of
the Ordinance.the Ordinance.
FollowingFollowing Six RegulationsSix Regulations are notified so far:-are notified so far:-
1.1.PPRA Regulations, 2008PPRA Regulations, 2008 (BD Works+Record)(BD Works+Record)
2.2.PPRA Regulation, 2009PPRA Regulation, 2009 (posting of Contract Awards; Rs.(posting of Contract Awards; Rs.
50 million)50 million)
3.3.Consultancy Services Regulations, 2010Consultancy Services Regulations, 2010
4.4.PPRA Regulation, 2011PPRA Regulation, 2011 (Rule 5)(Rule 5)
5.5.Eligible BiddersEligible Bidders (Tax Compliance)(Tax Compliance) Regulations, 2015Regulations, 2015
6.6.Public Procurement (Public Procurement (Specimens for advertisementSpecimens for advertisement))
Regulations, 2015Regulations, 2015 16

Methods of ProcurementMethods of Procurement
Financial limits in PakistanFinancial limits in Pakistan
11 Petty PurchasePetty Purchase
Below Rs.25,000Below Rs.25,000
2.2. Request for QuotationsRequest for Quotations
Rs.25,000Rs.25,000<< to >to >Rs.100,000Rs.100,000
3.3. Open Competitive BiddingOpen Competitive Bidding
One hundred Thousand Rupees(One hundred Thousand Rupees(Rs.100,000Rs.100,000) & above) & above
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Financial Limits for Missions AbroadFinancial Limits for Missions Abroad
11 Single TenderSingle Tender Upto US$ 2,000/- or Euro 1,500/-Upto US$ 2,000/- or Euro 1,500/-
2.2. Limited TenderLimited Tender US$ 2,000< > US$4,000/- orUS$ 2,000< > US$4,000/- or
Euro1,500 < > Euro3,000/-Euro1,500 < > Euro3,000/-
3.3. Open Competitive BiddingOpen Competitive Bidding
US$ 4,000 /- or Euro 3,000/- & aboveUS$ 4,000 /- or Euro 3,000/- & above
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(Rule 42)(Rule 42)
(a)(a) Petty PurchasesPetty Purchases
• if below the limit of Rs. 25,000if below the limit of Rs. 25,000
• exempted from the requirement of bidding or quotation ofexempted from the requirement of bidding or quotation of
Prices.Prices.
• Should be in conformity with Principles of ProcurementShould be in conformity with Principles of Procurement
prescribed under Rule 4prescribed under Rule 4
• Financial limit of Rs. 25,000 is extendable, if justified.Financial limit of Rs. 25,000 is extendable, if justified.
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b)b) Request for quotationsRequest for quotations
• Below the financial limit of Rs. 100,000Below the financial limit of Rs. 100,000
• Below Rs. 5oo,000 for Autonomous bodiesBelow Rs. 5oo,000 for Autonomous bodies
(required to be approved by concerned Board of(required to be approved by concerned Board of
Directors)Directors)
• Standard specificationsStandard specifications
• Minimum of 03 quotations requiredMinimum of 03 quotations required
• Purchase from the supplier offering the lowestPurchase from the supplier offering the lowest
priceprice
• Financial limit of Rs. 100,000 is extendable ifFinancial limit of Rs. 100,000 is extendable if
full justification is provided.full justification is provided.
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(C)(C) Direct ContractingDirect Contracting
A PA may engage in direct contracting if theA PA may engage in direct contracting if the
following conditions are met:following conditions are met:
i.i. Acquisition of spare parts or supplementary services from theAcquisition of spare parts or supplementary services from the
original manufacturer or supplier if not available from alternateoriginal manufacturer or supplier if not available from alternate
sourcessources
ii.ii.Only one manufacturer or supplier existsOnly one manufacturer or supplier exists
(specification of appropriate forum for authorization )(specification of appropriate forum for authorization )
iiiiii.. Repeat orders not exceeding 15% of the original procurementRepeat orders not exceeding 15% of the original procurement
iviv.. Where a change of supplier would oblige the procuringWhere a change of supplier would oblige the procuring
agency to acquire material having different technical specificationsagency to acquire material having different technical specifications
or characteristicsor characteristics
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Direct ContractingDirect Contracting
v.v. In case of an emergency declared by an appropriateIn case of an emergency declared by an appropriate
fora.fora.
vi.vi. The Prices are fixed by the Government.The Prices are fixed by the Government.
viivii.. The Purchase of Motor Vehicle from Local originalThe Purchase of Motor Vehicle from Local original
manufactures or their authorized agents.manufactures or their authorized agents.
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(d)(d) Negotiated TenderingNegotiated Tendering
Procuring agency may engage in negotiatedProcuring agency may engage in negotiated
tendering with one or more suppliers ortendering with one or more suppliers or
contractors with or without prior publication of acontractors with or without prior publication of a
procurement notification.procurement notification.
i.i. The supplies involved are manufactured purely forThe supplies involved are manufactured purely for
the purpose of supporting a specific piece ofthe purpose of supporting a specific piece of
research or an experiment, a study or a particularresearch or an experiment, a study or a particular
development;development;
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ii.ii. For technical or artistic reasons, or for reasonsFor technical or artistic reasons, or for reasons
connected with protection of exclusive rights orconnected with protection of exclusive rights or
intellectual properly, the supplies may beintellectual properly, the supplies may be
manufactured or delivered only by a particularmanufactured or delivered only by a particular
supplier;supplier;
iii.iii. For reasons of extreme urgency brought about byFor reasons of extreme urgency brought about by
events unforeseeable by the procuring agency, theevents unforeseeable by the procuring agency, the
time limits laid down for open and limited biddingtime limits laid down for open and limited bidding
methods cannot be met. The circumstances invokedmethods cannot be met. The circumstances invoked
to justify extreme urgency must not be attributableto justify extreme urgency must not be attributable
to the procuring agency;to the procuring agency; 24

Provided that any procuring agency desirous ofProvided that any procuring agency desirous of
using negotiated tendering as a method ofusing negotiated tendering as a method of
procurement shall record its reasons andprocurement shall record its reasons and
justifications in writing for resorting to negotiatedjustifications in writing for resorting to negotiated
tendering and shall place the same on record.tendering and shall place the same on record.
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International and Inter-governmentalInternational and Inter-governmental
CommitmentsCommitments
(Rule. 5)(Rule. 5)
Whenever these rules are in conflict with an obligation orWhenever these rules are in conflict with an obligation or
commitment of the Federal Government arising out ofcommitment of the Federal Government arising out of
 an international treaty oran international treaty or
 an agreement with a State or States, oran agreement with a State or States, or
 any international financial institutionany international financial institution
the provisions of such international treaty orthe provisions of such international treaty or agreementagreement toto
prevail to the extent of such conflict.prevail to the extent of such conflict.
Prior Approval of ECPrior Approval of ECCC(PP Regulations, 2011)(PP Regulations, 2011)
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Integrity PactIntegrity Pact
(Rule. 7 )(Rule. 7 )
Integrity Pact to be made a part of allIntegrity Pact to be made a part of all
contracts exceedingcontracts exceeding Rs. 10 MillionRs. 10 Million in valuein value
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Procurement PlanningProcurement Planning
(Rule 8)(Rule 8)
Procurement Planning forProcurement Planning for realistically determining therealistically determining the
requirements of the procuring agencyrequirements of the procuring agency ,within its,within its
available resourcesavailable resources,, delivery timedelivery time oror completioncompletion
datedate andand benefitsbenefits that are likely to accrue to thethat are likely to accrue to the
procuring agency in future.procuring agency in future.
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*Annual Procurement Plan for 2017 – 18
(under Rule 8 and 9 of the Public Procurement Rules, 2004)
Name of the Procuring Agency__________________________________________________________________________________
* The Annual Procurement Plan may be prepared on the assumption that total allocated budget will be released.
** Procurement method means open Competitive Bidding / Petty Purchases / Quotations / Direct Contracting / Negotiated Tendering.
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Limitation on splitting or regrouping
(Rule 9)
A procuring agency to announce in an appropriate
manner all proposed procurements for each
financial year,
To proceed accordingly without any splitting or
regrouping of procurement so planned; and
To advertise in advance on the Authority’s website
and procuring agency’s (if any) own website.
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Specifications
(Rule 10 )
• to beto be genericgeneric without references to brand names,without references to brand names,
model numbers, catalogue numbers or similarmodel numbers, catalogue numbers or similar
classifications.classifications.
• if essential to complete an otherwise incompleteif essential to complete an otherwise incomplete
specification, such use or reference to be qualifiedspecification, such use or reference to be qualified
with the words “with the words “or equivalentor equivalent””
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Approval Mechanism
(Rule 11 )
All procuring agencies toAll procuring agencies to provide clearprovide clear
authorizationauthorization andand delegation of powersdelegation of powers forfor
different categories of procurement and todifferent categories of procurement and to
only initiate procurement onceonly initiate procurement once approval of theapproval of the
competent authoritiescompetent authorities obtained.obtained.
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Advertisement Methods
(Rule 12)
 Rs.100,000 – Rs. 2 MillionRs.100,000 – Rs. 2 Million :to be:to be
advertised on theadvertised on the Authority’s websiteAuthority’s website
 over Rs.2 Millionover Rs.2 Million : to be advertised on the: to be advertised on the
PPRA’s website andPPRA’s website and newspapers, at least twonewspapers, at least two
national dailies,national dailies, having wide circulation.having wide circulation.
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Response Time
((Rule 13)
 National Competitive Bidding --National Competitive Bidding --not less thannot less than 15 days15 days
 International Competitive Bidding -- not less thanInternational Competitive Bidding -- not less than
30 days .30 days .
The response time to be calculatedThe response time to be calculated from the date offrom the date of
first publicationfirst publication of the advertisement in a newspaperof the advertisement in a newspaper
or posting on the website.or posting on the website.
 Where publication of such advertisements or noticesWhere publication of such advertisements or notices
has occurredhas occurred in both electronic and print mediain both electronic and print media, the, the
response time to be calculated from the day of its firstresponse time to be calculated from the day of its first
publication in the newspapers.publication in the newspapers.
 Proviso; in emergencyProviso; in emergency
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BlacklistingBlacklisting
((Rule 19 )Rule 19 )
 Specify a mechanism and manner toSpecify a mechanism and manner to
permanently or temporarily bar.permanently or temporarily bar.
• Such barring action shall be duly publicizedSuch barring action shall be duly publicized
and communicated to the Authority.and communicated to the Authority.
 Adequate opportunity of being heard.Adequate opportunity of being heard.
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Bid SecurityBid Security
(Rule 25)(Rule 25)
The procuring agency may require the biddersThe procuring agency may require the bidders
to furnish a bid security not exceeding of theto furnish a bid security not exceeding of the
bid price.bid price.
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Bid ValidityBid Validity
(Rule 26 )(Rule 26 )
• Bid validity period must be specifiedBid validity period must be specified
• Bids shall be valid for the time period specified in the biddingBids shall be valid for the time period specified in the bidding
documentsdocuments
• P.A shall process the bid within the bid validity periodP.A shall process the bid within the bid validity period
• Extensions under exceptional circumstances, by recording theExtensions under exceptional circumstances, by recording the
reasonsreasons
• All the applicants shall be asked to extend their bid validityAll the applicants shall be asked to extend their bid validity
periodperiod
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Evaluation criteriaEvaluation criteria
(Rule 29)(Rule 29)
i.i. Procuring agencies shall formulate an appropriateProcuring agencies shall formulate an appropriate
evaluation criterion listing all the relevantevaluation criterion listing all the relevant
information against which a bid is to be evaluated.information against which a bid is to be evaluated.
ii.ii. Such evaluation criteria shall form an integral partSuch evaluation criteria shall form an integral part
of the bidding documents.of the bidding documents.
iii.iii. Failure to provide for an unambiguous evaluationFailure to provide for an unambiguous evaluation
criteria in the bidding documents shall amount tocriteria in the bidding documents shall amount to
mis-procurement.mis-procurement.
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Rejection of bidsRejection of bids
(Rule 33)(Rule 33)
i.i. The procuring agency may reject all bids or proposals at anyThe procuring agency may reject all bids or proposals at any
time prior to the acceptance of a bid or proposal.time prior to the acceptance of a bid or proposal.
ii.ii. The procuring agency shall upon request communicate toThe procuring agency shall upon request communicate to
any supplier or contractor who submitted a bid or proposal,any supplier or contractor who submitted a bid or proposal,
the grounds for its rejection of all bids or proposals, but isthe grounds for its rejection of all bids or proposals, but is
not required to justify those grounds.not required to justify those grounds.
iii.iii. Notice of the rejection of all bids or proposals shall be givenNotice of the rejection of all bids or proposals shall be given
promptly to all bidders.promptly to all bidders.
iv.iv. The procuring agency shall incur no liability.The procuring agency shall incur no liability.
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Announcement of evaluationAnnouncement of evaluation
Reports (Rule 35 )Reports (Rule 35 )
Procuring agencies shall announce the resultsProcuring agencies shall announce the results
of bid evaluation in the form of a report givingof bid evaluation in the form of a report giving
justification for acceptance or rejection of bidsjustification for acceptance or rejection of bids
atat leastleast ten daysten days prior to the award ofprior to the award of
procurement contract.procurement contract.
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Acceptance of BidsAcceptance of Bids
(Rule 38)(Rule 38)
 lowest evaluated bid to be acceptedlowest evaluated bid to be accepted
 If not in conflict with any other law, rules,If not in conflict with any other law, rules,
regulations or policy of Government.regulations or policy of Government.
 WithinWithin the original or extended period of bid validitythe original or extended period of bid validity
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Performance guaranteePerformance guarantee
(Rule – 39)(Rule – 39)
If required ,to be furnished by the successful bidderIf required ,to be furnished by the successful bidder
 shall not exceed 10% of the contractshall not exceed 10% of the contract
amountamount
 should be clearly expressed in theshould be clearly expressed in the
bidding documents.bidding documents.
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Limitation on negotiationsLimitation on negotiations
(Rule – 40)(Rule – 40)
No negotiations with the bidder having submittedNo negotiations with the bidder having submitted
the lowest evaluated bid or with any other bidder.the lowest evaluated bid or with any other bidder.
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ConfidentialityConfidentiality
( Rule – 41 )( Rule – 41 )
• All information regarding the bidAll information regarding the bid
evaluation shall be kept confidentialevaluation shall be kept confidential
• until the announcement of evaluationuntil the announcement of evaluation
report under Rule - 35report under Rule - 35
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Redressal of Grievances by theRedressal of Grievances by the
Procuring AgencyProcuring Agency
(( Rule – 48)Rule – 48)
• On receipt of complaint of an aggrieved bidderOn receipt of complaint of an aggrieved bidder
prior to the entry into force of the procurementprior to the entry into force of the procurement
contractcontract
• PA to Constitute a CommitteePA to Constitute a Committee
• ComplaintsComplaints
• Written complaintWritten complaint within 15 dayswithin 15 days after theafter the
announcement ofannouncement of the bid evaluation reportthe bid evaluation report
• Decision by the Committee within 15 days of theDecision by the Committee within 15 days of the
receipt of thereceipt of the complaintcomplaint
• Appeal can be filed in the relevant court ofAppeal can be filed in the relevant court of
jurisdictionjurisdiction
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Overriding EffectOverriding Effect
(Rule – 51)(Rule – 51)
• Shall have effect notwithstandingShall have effect notwithstanding
anything to the contrary contained inanything to the contrary contained in
any other rulesany other rules concerning publicconcerning public
procurementsprocurements
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