KATHMANDU: The government has moved forward with plans to amend the Public Procurement Act. The decision was taken by the Cabinet within its 100-day governance reform agenda.
The Public Procurement Monitoring Office has prepared a draft amendment bill to the ‘Public Procurement Act, 2063’. Stakeholders have been given 7 days to provide feedback.
After finalization, the bill will be sent to the Office of the Prime Minister and Council of Ministers. It will then be registered in Parliament for approval.
The amendment proposes changes to 36 existing provisions. It focuses on tender process, mobilization advance, contract management, penalties, and incentives.
Key proposed changes
Consumer committees to be removed
The provision allowing user committees or beneficiary groups in procurement will be removed.
Flexible tender timelines
Current rules require 30 days for national tenders and 45 days for international tenders. The amendment allows flexible timelines based on need.
Tender notices may not need publication in newspapers if issued through the electronic procurement system.
Stricter mobilization advance
Advance payment will be limited to actual need. It will cover site preparation, camps, labor setup, and equipment.
The advance will not exceed 20% of the contract value. Only half of the approved amount can be released initially.
Work must start within 30 days
Contractors must begin work within 30 days of receiving the first advance. Failure will lead to bank guarantee forfeiture.
Further payments will be made only after confirming work progress. Payments will go through a dedicated bank account.
Misuse of advance leads to contract termination
If advance funds are used for other purposes, the contract can be cancelled. Bank guarantees will be confiscated and legal action may follow.
Revised rule for contract termination cost
If a contract is terminated, the contractor will pay only the additional cost required to complete the remaining work. Earlier, the full remaining cost was recovered.
Penalty for tender without site readiness
Officials may face action if tenders are issued without site clearance, compensation, or environmental approval.
Delays in approvals, payments, or blacklisting decisions will also invite action.
Incentives for early completion
Contractors completing projects before deadline with quality work may receive rewards and certificates.
Government staff completing procurement on time may also get incentives.
Variation approval delegated
Variation approvals will now be handled at different departmental levels based on the percentage change. Section Officers can approve variations of up to 5 percent, Under Secretaries up to 10 percent, and Joint Secretaries up to 15 percent. Any variation above 15 percent will be decided by the Department Head. Currently, however, variations exceeding 15 percent still require approval at the ministry level.
The amendment aims to speed up procurement and improve accountability in public projects.
