Cabinet exempts state-owned entities from ‘transparency rules

Cabinet exempts state-owned entities from ‘transparency rules

According to the notification, the federal government notified amended Public Procurement Regulatory Authority rules (PPRA) on June 29, following approval by the cabinet.

The amended rule 42 (f) states that a procuring agency can contract directly with state-owned entities, such as professional, autonomous, or semi-autonomous bodies or organizations of the federal and provincial governments, for the procurement and delivery of works and services. This includes consultancy services.

Rizwan Malik, Managing Director at the PPRA, stated that only time-sensitive cases are eligible for exemption. He also said that these cases would be subject to four conditions in order to ensure transparency and efficiency.

He stated that the government agencies that won’t be competing for contracts would not be permitted to subcontract the work.

Sources indicated that the main beneficiaries of this amendment would be entities like the National Logistic Cell and Frontier Works Organization.

After several government entities requested exemptions from the PPRA rules, the amendments were made.

The government is unable to exonerate Kartarpur projects worth Rs17 billion that were awarded in violation of PPRA rules.

However, the rules allow direct contact between government entities provided that the organisation or body is eligible to provide the services. The work includes consultancy services.

If there are multiple bodies or organisations that are eligible to perform the work or render the services, the procuring agent shall allow them to compete by limiting tendering (notifications), without any advertisement. They will have a reasonable time to submit their proposals or applications, as per the third condition of a direct contract.

According to the amended rules, the procuring agency would develop a mechanism to determine price reasonability in order to make sure that prices offered by state-owned entities are reasonable to award the contract.

Malik stated that the spending limit for the force account has been increased to Rs200million to allow more flexibility in government spending. The execution of small works and other non-consultancy services by direct contracting with any state owned entity is what the force account means.

The amendments also state that the procuring agency can use force account to purchase goods and services whose value does not exceed Rs200million. However, it must ensure that the works are not interrupted by ongoing operations and that urgent repairs, rehabilitation, and remodelling work of national heritage are done quickly to avoid further damage.

The World Bank has set conditions for a loan of $400 million to the World Bank.

According to the managing director, 23 major changes have been made in 2004’s PPRA rules.

The managing director stated that the objective of these amendments was to ease business conditions and bring efficiency and transparency into public procurements.

Sources said the new parameters were also intended to end corrupt and fraudulent practices in public procurement and are generally accepted. Sources said that contractors are now being elected to the parliament using black money because of this massive corruption.

According to the MD, internationally blacklisted companies will be blacklisted in the country as well. However, there will be an opportunity for public sector companies to submit a review petition.

The procuring agency must devise a system for blacklisting bidders and debarment for a specific time. For corrupt or fraudulent acts, the bidders will be disqualified from the procurement process for a period of 10 years. Failure to execute the contract will result in the bidder being disqualified for three year.

According to the government, a blacklisted bidder is one that has been found guilty of corrupt or fraudulent conduct or incapable of performing during execution of the contract.

A bidder may now be disqualified for coercive actions like harming or threatening people.

Rizwan Malik stated that it will be the first time that PPRA rules will apply to the disposal public assets after procurements.

Domestic procurements will be preferred according to rules. A standard bidding document would then be uploaded to the website.

All public sector procuring agencies of Pakistan will consider a bidder who is blocked by one entity to be debarred.

To allow timely announcement of the results, the rules were also amended.

The procurement agency shall publish the results of bid evaluation based on the procedures used for each procurement at least 15 days before awarding the contract.

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