Project

Submitted to: Sir Hafiz Muhammad Adnan

By

Group#01

Maria Atiq (MPM231017)

Tukreem Fatima (MPM231003)

Hafiza Aqsa Bashir (MPM231006)

Areej Abbasi (MPM233002)

Faculty of Management Capital University of Science &

Technology, Islamabad December, 2024
 Report Title

PUBLIC PROCUREMENT REGULATORY AUTHORITY

(PPRA)
RULES & PROCEDURES
Contents
Procurement ................................................................................................................................................ 5
Public Procurement .................................................................................................................................... 5
Purpose and Rationale ................................................................................................................................ 5
Public Procurement Regulatory Authority (PPRA) ................................................................................ 5
Public Procurement Award of Contract Procedure ................................................................................ 6
Procurement planning: ............................................................................................................................. 7
Procurement Advertisement .................................................................................................................... 8
Pre-Qualification, Qualification and Dis-Qualification of Suppliers and Contractors ............................. 10
Methods of Procurement ....................................................................................................................... 12
Opening, Evaluation and Rejection of Bids ............................................................................................ 16
Opening of bids:...................................................................................................................................... 16
Evaluation criteria: .................................................................................................................................. 17
Evaluation of bids: .................................................................................................................................. 17
Clarification of bids: ............................................................................................................................... 17
Rejection of bids: .................................................................................................................................... 18
Re-bidding: ............................................................................................................................................. 18
Announcement of evaluation reports: ..................................................................................................... 18
Procedures of open competitive bidding.- .............................................................................................. 19
Acceptance of Bids and Award of Procurement Contracts .................................................................. 23
Maintenance of Record and freedom of Information ............................................................................ 24
Redressal of Grievances and Settlement of Disputes ............................................................................. 25
PPRA Rules vs. PPRA Authority Ordinance ......................................................................................... 26
Understanding the PPRA Authority Ordinance ....................................................................................... 26
PPRA Rules: Implementation Framework .............................................................................................. 27
Comparison of PPRA Rules and Ordinance ........................................................................................... 28
Challenges in Implementation ................................................................................................................ 29
Recent Developments and Amendments ................................................................................................ 29
Case Studies ............................................................................................................................................... 30
Alternative Procedures for Awarding Contracts beyond PPRA Rules ............................................... 30
Competitive Bidding ............................................................................................................................... 31
Two-Stage Bidding ................................................................................................................................. 31
 Request for Proposals (RFP) ................................................................................................................... 32
Request for Quotations (RFQ) ................................................................................................................ 33
Direct Contracting................................................................................................................................... 33
Framework Agreements .......................................................................................................................... 34
Negotiated Procedure .............................................................................................................................. 35
Public-Private Partnerships (PPP)........................................................................................................... 35
E-Procurement Systems .......................................................................................................................... 36
International Guidelines and Frameworks .............................................................................................. 36
Recommendations for Improvement ....................................................................................................... 37
Conclusion ................................................................................................................................................. 38
References .................................................................................................................................................. 38
Procurement

Procurement is a business management function that manages the entire process of

acquisition of external resources in an efficient and economical manner.

Public Procurement

Public procurement refers to the process by which government entities acquire goods,
services, or works from the private sector. This process is essential for ensuring that public
resources are utilized effectively and efficiently to meet the needs of citizens. The procurement
process is guided by principles such as transparency, competition, and fairness, aiming to
achieve value for money while also promoting economic development, sustainability, and
innovation.

Purpose and Rationale

Before the establishment of the PPRA, public procurement in Pakistan lacked

standardized procedures and was prone to inefficiencies, corruption, and non-compliance with
international best practices. Common challenges included:

 Lack of transparency.
 High transaction costs due to inefficient practices.
 Minimal competition, often leading to inflated costs.
 Absence of a formal grievance redressal mechanism for aggrieved bidders.

The PPRA was introduced to address these issues by creating a regulatory framework that
ensures public funds are utilized effectively and ethically.

Public Procurement Regulatory Authority (PPRA)

The Public Procurement Regulatory Authority (PPRA) was established under the PPRA
Ordinance, 2002, as part of the Government of Pakistan's efforts to reform public procurement
practices. The objective was to enhance transparency, accountability, and
efficiency in the procurement processes of public sector entities. The PPRA
operates under the administrative control of the Ministry of Finance.

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Public Procurement Award of Contract Procedure

Public procurement is a critical function of government operations and plays a significant

role in delivering public services, infrastructure, and goods. The procurement award of contract
procedure is a structured method that ensures the acquisition of goods and services is conducted
in an orderly, fair, and legal manner. The procedure begins with the identification of needs and
the development of a procurement plan. This plan outlines the specifications for the required
goods or services and establishes a budget. Once the plan is approved, the procurement
opportunity is publicly advertised to invite bids from interested suppliers.

After the submission of bids, a rigorous evaluation process is undertaken to assess each
bid against predefined criteria. This evaluation considers factors such as price, quality, supplier
experience, and compliance with regulatory requirements. The goal is to select the bid that offers
the best overall value for the public sector. Following the evaluation, the contract is awarded to
the winning bidder, formally establishing the terms and conditions for the delivery of the goods
or services. Effective contract management is crucial in this phase, ensuring that suppliers meet
their obligations while providing oversight to mitigate risks associated with contract
performance.

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 Procurement planning

Within one year of commencement of these rules, all procuring agencies shall devise a
mechanism, for planning in detail for all proposed procurements with the object of realistically
determining the requirements of the procuring agency, within its available resources, delivery
time or completion date and benefits that are likely to accrue to the procuring agency in future.

Limitation on splitting or regrouping of proposed procurement:

Save as otherwise provided and subject to the regulation made by the Authority, with the
prior approval of the Federal Government, a procuring agency shall announce in an appropriate
manner all proposed procurements for each financial year and shall proceed accordingly without
any splitting or regrouping of the procurements so planned. The annual requirements thus
determined would be advertised in advance on the Authority website as well as on the website of
the procuring agency in case the procuring agency has its own website.

Specifications:

 Procuring agencies must define specifications to allow the widest possible competition
without favoring a single contractor or supplier or putting others at a disadvantage.
 Specifications must be generic in nature, avoiding references to:
o Brand names.
o Model numbers.
o Catalogue numbers.
o Country of origin.
o Similar classifications.
 If referencing a brand name or catalogue number is essential to complete an otherwise
incomplete specification, the following must be ensured:
o The words "or equivalent" must be included.
o Specific justifications must be recorded in writing.
o Parameters of "equivalence" must be defined clearly to ensure transparency for all
participants.
 Solicitation documents or notices for the disposal of assets by tender must specify that:

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 o The asset is sold on an "as is, where is" basis.
o Liability is disclaimed after the sale.
 Despite the "as is, where is" clause, procuring agencies must provide a full and accurate
description of the asset to be disposed of.

Approval mechanism:

All procuring agencies shall provide clear authorization and delegation of powers for
different categories of procurement and shall only initiate procurements once approval of the
competent authorities concerned has been accorded.

Procurement Advertisement

Methods of advertisement:

Procurements over “five hundred thousand Pakistani Rupees and up to the limit of “three
million Pakistani Rupees shall be advertised on the Authority€™s website in the manner and
format specified by regulation by the Authority from time to time. These procurement
opportunities may also be advertised in print media, if deemed necessary by the procuring
agency:

 All procurement opportunities over “three million Pakistani Rupees should be advertised
on the Authority website as well as in other print media or newspapers having wide
circulation. The advertisement in the newspapers shall principally appear in at least two
national dailies, one in English and the other in Urdu.
 A procuring agency utilizing electronic media shall ensure that the information posted on
the website is complete for the purposes for which it has been posted, and such
information shall remain available on that website until the closing date for the
submission of bids.

Response time

 The procuring agency may decide the response time for receipt of bids or proposals (including
proposals for pre-qualification) from the date of publication of an advertisement or notice,

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 keeping in view the individual procurement complexity, availability and urgency. However,
under no circumstances the response time shall be less than fifteen “days for national
competitive bidding and thirty” days for international competitive bidding from the date of
publication of advertisement or notice.

All advertisements or notices shall expressly mention the response time allowed for that particular
procurement along with the information for collection of bid documents which shall be issued till
a given date, allowing sufficient time to complete and submit the bid by the closing date:

Provided that no time limit shall be applicable in case of emergency.

 The response time shall be calculated from the date of first publication of the
advertisement in a newspaper or posting on the web site, as the case may be:
 Provided that for all procurements up to three million Pakistani Rupees, the response time
shall be considered from the date of appearance of the advertisement on the Authority
website.
 In situations where publication of such advertisements or notices has occurred in both
electronic and print media, the response time shall be calculated from the day of its first
publication in the newspapers.

Exceptions:

 It shall be mandatory for all procuring agencies to advertise all procurement requirements
exceeding “prescribed financial limit which is applicable under sub-clause (i) of clause
(b) of rule 42. However under following circumstances deviation from the requirement is
permissible with the prior approval of the Authority,-
 The proposed procurement is related to national security and its publication could
jeopardize national security objectives; and the proposed procurement advertisement or
notice or publication of it, in any manner, relates to disclosure of information, which is
proprietary in nature or falls within the definition of intellectual property which is
available from a single source.

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 Pre-Qualification, Qualification and Dis-Qualification of Suppliers and Contractors

Pre-qualification of suppliers and contractors:

A procuring agency, prior to the floating of tenders, invitation to proposals or offers in

procurement proceedings, may engage in pre-qualification of bidders in case of services, civil
works, turnkey projects and in case of procurement of expensive and technically complex
equipment to ensure that only technically and financially capable firms having adequate
managerial capability are invited to submit bids. A procuring agency while engaging in pre-
qualification may take into consideration the following factors, namely:-

 Relevant experience and past performance;

 Capabilities with respect to personnel, equipment, and plant;
 Financial position;
 Appropriate managerial capability; and
 Any other factor that a procuring agency may deem relevant, not inconsistent with these
rules.

Pre-qualification process:

The procuring agency shall announce all necessary information for pre-qualification in
the documents, including preparation instructions, evaluation criteria, required evidence, and
other relevant details. Pre-qualification documents will be provided upon request and payment (if
applicable).

Suppliers or contractors will be promptly notified of their pre-qualification status. The list of pre-
qualified participants will be available upon request. Only pre-qualified suppliers or contractors
can proceed further in procurement. The agency will also communicate reasons for rejection to
those not pre-qualified.

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Procurement of common use items, services and commodities through framework agreements:

The procuring agency shall use framework agreements for recurrent items, services
(including maintenance), and commodities with fluctuating prices, for a maximum of three years.
Provisional annual estimates, including requirements and quantities, will be prepared based on
rational demand. Prequalification proceedings will be conducted to select suppliers and service
providers. Open agreements can last up to three years, while closed agreements are limited to
one year. New suppliers or service providers may be pre-qualified during the term of existing
agreements. The Authority will provide regulations, guidelines, and templates for framework
agreements.

Price adjustment for framework agreements:

The procuring agency may, during the contract execution, accept a request to make price
adjustment (under circumstance of above normal price volatility) and shall make a comparison of
the prices requested against the national or international price indicator guides adopted by the
Authority and verify the justification for such price adjustment.

The procuring agency shall determine the factor or percentage for price adjustment approved by
the Principal Accounting Officer (PAO).

Qualification of suppliers and contractors:

A procuring agency, at any stage of the procurement proceedings, having credible

reasons for or prima facie evidence of any defect in supplier or contractor capacities, may require
the suppliers or contractors to provide information concerning their professional, technical,
financial, legal or managerial competence whether already pre-qualified or not:

Provided that such qualification shall only be laid down after recording reasons therefore in
writing. They shall form part of the records of that procurement proceeding.

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 Disqualification of suppliers and contractors:

The procuring agency shall disqualify a supplier or contractor if it finds, at any time, that
the information submitted by him concerning his qualification as supplier or contractor was false
and materially inaccurate or incomplete.

Blacklisting of suppliers and contractors:

The procuring agency shall establish a mechanism for blacklisting and debarment of
bidders in accordance with regulations by the Authority.

Blacklisting and Cross-Debarment:

 Up to 10 years: For corrupt or fraudulent practices established through blacklisting

proceedings.
 Up to 3 years: For failure to perform contractual obligations or breach of contract due to
incapacity or capability issues. This follows arbitration, if applicable, as per contract
clauses.
 Up to 6 months: For failing to comply with a bid securing declaration, without
involvement in corrupt or fraudulent practices.
 Blacklisting decisions, including grounds, must be communicated to the Authority and the
bidder, and publicized after verifying procedural compliance.
 Bidders may file a review petition to the Authority within 30 days, paying a prescribed fee. The
Authority will decide the case within 90 days, and its decision will be final.
 A bidder blacklisted or debarred by foreign entities will be treated similarly in Pakistan for the
period declared by the foreign entity. Public sector cases may be reviewed by the Board based
on Authority evaluations. Blacklisted bidders must fulfill ongoing contractual obligations unless
the procuring agency decides otherwise.

Methods of Procurement

The procuring agencies shall use open competitive bidding as the principal method of
procurement for the procurement of goods, services and works.

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Open competitive bidding:

Subject to the provisions of rules 22 to 37 the procuring agencies shall

engage in open competitive bidding if the cost of the object to be
procured is more than *the prescribed financial limit which is applicable
under sub-clause (i) of clause (b) of rule 42.

Mechanism for import of commodities to meet the demand-supply gap:

1. The advertisement shall be published in at least two widely circulated daily newspapers
or journals and international websites including the websites of the Authority and the
procuring agency itself.
2. The single-stage two envelop bidding procedure shall be adopted for the subject
procurement.
3. The bidding documents shall clearly define the specifications, quantities, quality
parameters, evaluation criteria and allied national or international standards of the desired
commodities in addition to the specimen contract.
4. The bidding documents shall be uploaded on procuring agencies and the Authority's
website and shall contain the tentative dates for issuance of final evaluation report and
signing of contract.
5. The evaluation report shall be communicated to all the bidders electronically immediately
after its issuance in addition to hoisting the same on the procuring agencies as well as the
Authority’s website.
If it is mentioned in the bid date sheet that the bidders may offer less quantity as required to meet
the demand, the procuring agency may award the remaining quantity to the next most
advantageous bidder and so on until the desired quantities advertised by the procuring agency are
met with and if they agree to bring the price at par with the most advantageous bidder or
otherwise.

Submission of bids:

1. The bids shall be submitted in a sealed package or packages in such manner that the
contents are fully enclosed and cannot be known until duly opened.

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 2. A procuring agency shall specify the manner and method of submission and receipt of
bids in an unambiguous and clear manner in the bidding documents.

Bidding documents:

1. Procuring agencies shall formulate precise and unambiguous bidding documents that
shall be made available to the bidders immediately after the publication of the invitation
to bid.
2. For competitive bidding, whether open or limited, the bidding documents shall include
the following, namely:-
a. Invitation to bid;
b. Instructions to bidders;
c. Form of bid;
d. Form of contract;
e. General or special conditions of contract;
f. Specifications and drawings or performance criteria (where applicable);
g. List of goods or bill of quantities (where applicable);
h. Delivery time or completion schedule;
i. Qualification criteria (where applicable);
j. Bid evaluation criteria;
k. Format of all securities required (where applicable);
l. Details of standards (if any) that are to be used in assessing the quality of goods,
works or services specified; and
m. Any other detail not inconsistent with these rules that the procuring agency may
deem necessary.
3. Any information, that becomes necessary for bidding or for bid evaluation, after the
invitation to bid or issue of the bidding documents to the prospective bidders, shall be
provided in a timely manner and on equal opportunity basis. Where notification of such
change, addition, modification or deletion becomes essential, such notification shall be
made in a manner similar to the original advertisement.
4. Procuring agencies shall use standard bidding documents as and when notified by
regulation by the Authority:

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 5. Provided that bidding documents already in use of procuring agencies may be retained in
their respective usage to the extent they are not inconsistent with these rules, and till such
time that the standard bidding documents are specified by regulations.
6. The procuring agency shall provide a set of bidding documents to any supplier or
contractor, on request and subject to payment of price, if any.

Reservations and preference:

Procuring agencies shall allow all prospective bidders to participate in procurement or

disposal proceedings without regard to nationality, except in cases in which a procuring agency
decides to limit such participation to national bidders only or prohibit participation of bidders of
some nationalities, in accordance with the policy of Federal Government.

The procuring agency shall, while evaluating and comparing bids, allow for preference to
domestic suppliers or contractors, while competing with the international bidders in accordance
with the policies of Federal Government or regulations made by the Authority for:

i. works projects;
ii. certain goods manufactured, mined, extracted and grown in the Islamic Republic of
Pakistan; and
iii. disposal of certain assets having any potential impact on national security;

The percentage of preference, to be accorded shall be clearly mentioned in the bidding documents
under the bid evaluation criteria.

Bid security:

The procuring agency may require the bidders to furnish a fixed amount of bid security
not exceeding five percent of the estimated value of procurement determined by the procuring
agency, Provided that in case where the procuring agency does not require the bid security, the
bidder shall submit bid securing declaration on the format prescribed by the Authority in
Standard Procurement Documents.

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Bid validity:

1. A procuring agency, keeping in view the nature of the procurement, shall subject the bid
to a bid validity period.
2. Bids shall be valid for the period of time specified in the bidding document.
3. The procuring agency shall ordinarily be under an obligation to process and evaluate the
bid within the stipulated bid validity period. However under exceptional circumstances
and for reason to be recorded in writing, if an extension is considered necessary, all
those who have submitted their bids shall be asked to extend their respective bid validity
period. Such extension shall be for not more than the period equal to the period of the
original bid validity.
4. Bidders who,-
 Agree to extension of their bid validity period shall also extend the validity of the
bid bond or security for the extended period of the bid validity;
 Agree to the procuring agency’s request for extension of bid validity period shall
not be permitted to change the substance of their bids; and
 Do not agree to an extension of the bid validity period shall be allowed to
withdraw their bids without forfeiture of their bid bonds or securities.

Extension of time for submission of bids:

Where a procuring agency has already prescribed a deadline for the submission of bids
and due to any reason the procuring agency finds it necessary to extend such deadline, it shall do
so only after recording its reasons in writing and in an equal opportunity manner. Advertisement
of such extension in time shall be done in a manner similar to the original advertisement.

Opening, Evaluation and Rejection of Bids

Opening of bids:

The date for opening of bids and the last date for the submission of bids shall be the same. Bids
shall be opened at the time specified in the bidding documents. The bids shall be opened at least
thirty minutes after the deadline for submission of bids.

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All bids shall be opened publicly in the presence of the bidders or their representatives who may
choose to be present, at the time and place announced prior to the bidding. The procuring agency
shall read aloud the unit price as well as the bid amount and shall record the minutes of the bid
opening. All bidders in attendance shall sign an attendance sheet. All bids submitted after the
time prescribed shall be rejected and returned without being opened.

Evaluation criteria:

Procuring agencies shall formulate an appropriate evaluation criterion listing all

the relevant information against which a bid is to be evaluated. Such evaluation criteria
shall form an integral part of the bidding documents. Failure to provide for an
unambiguous evaluation criteria in the bidding documents shall amount to mis-
procurement.

Evaluation of bids:

All bids shall be evaluated in accordance with the evaluation criteria and other terms and
conditions set forth in the prescribed bidding documents. Save as provided for in sub-clause (IV)
of clause (c) of rule 36 no evaluation criteria shall be used for evaluation of bids that had not
been specified in the bidding documents.

For the purposes of comparison of bids quoted in different currencies, the price shall be
converted into a single currency specified in the bidding documents. The rate of exchange shall
be the selling rate, prevailing on the date of opening of bids specified in the bidding documents,
as notified by the State Bank of Pakistan on that day.

A bid once opened in accordance with the prescribed procedure shall be subject to only those
rules, regulations and policies that are in force at the time of issue of notice for invitation of bids.

Clarification of bids:

 No bidder shall be allowed to alter or modify his bid after the bids have been opened.
However the procuring agency may seek and accept clarifications to the bid that do not
change the substance of the bid.

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  Any request for clarification in the bid, made by the procuring agency shall invariably be
in writing. The response to such request shall also be in writing.

Discriminatory and difficult conditions:

Save as otherwise provided, no procuring agency shall introduce any condition, which
discriminates between bidders or that is considered to be met with difficulty. In ascertaining the
discriminatory or difficult nature of any condition reference shall be made to the ordinary
practices of that trade, manufacturing, construction business or service to which that particular
procurement is related.

Rejection of bids:

The procuring agency may reject all bids or proposals at any time prior to the acceptance
of a bid or proposal. The procuring agency shall upon request communicate to any supplier or
contractor who submitted a bid or proposal, the grounds for its rejection of all bids or proposals,
but is not required to justify those grounds.

The procuring agency shall incur no liability, solely by virtue of its invoking sub-rule (1) towards
suppliers or contractors who have submitted bids or proposals. Notice of the rejection of all bids
or proposals shall be given promptly to all suppliers or contractors that submitted bids or
proposals.

Re-bidding:

If the procuring agency has rejected all bids under rule 33 it may call for a re-bidding.
The procuring agency before invitation for re-bidding shall assess the reasons for rejection and
may revise specifications, evaluation criteria or any other condition for bidders as it may deem
necessary.

Announcement of evaluation reports:

Based on the procedure adopted for the respective procurement, the procuring agency
shall announce the result of bid evaluation, in the form of final evaluation report giving

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justification for acceptance or rejection of bids at least fifteen days prior to the award of
procurement contract:

Provided that in case where technical proposal is to be evaluated separately, prior to opening of
financial proposal, the technical evaluation report shall be announced before opening of the
financial proposal.

Procedures of open competitive bidding.-

Save as otherwise provided in these rules the following procedures shall be permissible for open
competitive bidding, namely:-

 Single stage one envelope procedure.-

Each bid shall comprise one single envelope containing, separately, financial proposal and
technical proposal (if any). All bids received shall be opened and evaluated in the manner
prescribed in the bidding document.

 Single stage two envelope procedure.-

i. The bid shall comprise a single package containing two separate envelopes. Each
envelope shall contain separately the financial proposal and the technical proposal;
ii. The envelopes shall be marked as "FINANCIAL PROPOSAL" and ”TECHNICAL
PROPOSAL" in bold and legible letters to avoid confusion;
iii. Initially, only the envelope marked "TECHNICAL PROPOSAL" shall be opened;
iv. The envelope marked as "FINANCIAL PROPOSAL" shall be retained in the custody of
the procuring agency without being opened;
v. The procuring agency shall evaluate the technical proposal in a manner prescribed in
advance, without reference to the price and reject any proposal which does not conform
to the specified requirements;
vi. During the technical evaluation no amendments in the technical proposal shall
be permitted;
vii. The financial proposals of bids shall be opened publicly at a time, date and venue
announced and communicated to the bidders in advance;

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 viii. After the evaluation and approval of the technical proposal the procuring agency, shall at
a time within the bid validity period, publicly open the financial proposals of the
technically accepted bids only. The financial proposal of bids found technically non-
responsive shall be returned un-opened to the respective bidders; and
ix. The bid found to be the most advantageous bid shall be accepted.

 Two stage bidding procedure:

 First stage
 The bidders shall first submit, according to the required specifications, a technical
proposal without price;
 The technical proposal shall be evaluated in accordance with the specified evaluation
criteria and may be discussed with the bidders regarding any deficiencies and
unsatisfactory technical features;
 After such discussions, all the bidders shall be permitted to revise their respective
technical proposals to meet the requirements of the procuring agency;
 The procuring agency may revise, delete, modify or add any aspect of the technical
requirements or evaluation criteria, or it may add new requirements or criteria not
inconsistent with these rules:
 Provided that such revisions, deletions, modifications or additions are communicated to
all the bidders equally at the time of invitation to submit final bids, and that sufficient
time is allowed to the bidders to prepare their revised bids:
 Provided further that such allowance of time shall not be less than fifteen days in the case
of national competitive bidding and thirty days in the case of international competitive
bidding;
 Those bidders not willing to conform their respective bids to the procuring agency’s
technical requirements may be allowed to withdraw from the bidding without forfeiture
of their bid security;
 Second stage
 The bidders, whose technical proposals or bids have not been rejected and who are
willing to conform their bids to the revised technical requirements of the procuring

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 agency, shall be invited to submit a revised technical proposal along with the financial
proposal;
 The revised technical proposal and the financial proposal shall be opened *****on
respective specified, date and venue announced and communicated to the bidders in
advance; and
 The revised technical proposal and the financial proposal shall be evaluated in the
manner prescribed above. The bid found to be the ****most advantageous bid shall be
accepted:
 Provided that in setting the date for the submission of the revised technical proposal and
financial proposal a procuring agency shall allow sufficient time to the bidders to
incorporate the agreed upon changes in the technical proposal and prepare their financial
proposals accordingly.
 Two stage - two envelope bidding procedure:
 First stage
 The bid shall comprise a single package containing two separate envelopes. Each
envelope shall contain separately the financial proposal and the technical proposal;
 The envelopes shall be marked as "FINANCIAL PROPOSAL “and "TECHNICAL
PROPOSAL “in bold and legible letters to avoid confusion;
 Initially, only the envelope marked "TECHNICAL PROPOSAL “shall be opened;
 The envelope marked as "FINANCIAL PROPOSAL “shall be retained in the custody of
the procuring agency without being opened.
 The technical proposal shall be discussed with the bidders with reference to the
procuring agency technical requirements;
 Those bidders willing to meet the requirements of the procuring agency shall be allowed
to revise their technical proposals following these discussions.
 Bidders not willing to conform their technical proposal to the revised requirements of the
procuring agency shall be allowed to withdraw their respective bids without forfeiture of
their bid security.
 Second stage
 After agreement between the procuring agency and the bidders on the technical
requirements, bidders who are willing to conform to the revised technical specifications

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 and whose bids have not already been rejected shall submit a revised technical proposal
and supplementary financial proposal, according to the technical requirement;
 The revised technical proposal and original financial proposal along with supplementary
financial proposal shall be opened on respective specified time, date and venue
announced in advance by the procuring agency
 Provided that in setting the date for the submission of the revised technical proposal and
supplementary price proposal a procuring agency shall allow sufficient time to the
bidders to incorporate the agreed upon changes in the technical proposal and to prepare
the required supplementary financial proposal; and
 The procuring agency shall evaluate the whole proposal in accordance with the
evaluation criteria and the bid found to be the most advantageous bid shall be accepted.

 Conditions for use of single stage two envelope, two stage and two stage two envelope bidding
procedures:

Single stage one envelope bidding procedure shall ordinarily be the main open competitive
bidding procedure used for most of the procurement. Other appropriate procedures of open
competitive bidding shall be selected in the following circumstances, namely:-

a. single stage two envelope bidding procedure shall be used where the bids are to be
evaluated on technical and financial grounds and price is taken into account after
technical evaluation;
b. Two stage bidding procedure shall be adopted in large and complex contracts where
technically unequal proposals are likely to be encountered or where the procuring agency
is aware of its options in the market but, for a given set of performance requirements,
there are two or more equally acceptable technical solutions available to the procuring
agency; and Two stage two envelope bidding method shall be used for procurement
where alternative technical proposals are possible, such as certain type of machinery or
equipment or manufacturing plant.

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 Acceptance of Bids and Award of Procurement Contracts

Acceptance of bids:

The bidder with the most advantageous bid, if not in conflict with any other law, rules,
regulations or policy of the Federal Government, shall be awarded the procurement contract,
within the original or extended period of bid validity.

A. Bid Discount: shall be omitted;

B. Single responsive bid in goods, works and services

The procuring agency shall consider single bid in goods, works and services if it-

a. meets the evaluation criteria, ensures compliance of specifications and other terms &
conditions expressed in advertisement or bid solicitation documents;
b. is not in conflict with any provision of the Ordinance;
c. conforms to the technical specifications;
d. has financial conformance in terms of rate reasonability:

The procuring agency shall make a decision with due diligence and in compliance with general
principles of procurement like economy, efficiency and value for money.

Performance guarantee:

Where needed and clearly expressed in the bidding documents, the procuring agency
shall require the successful bidder to furnish a performance guarantee which shall not exceed ten
per cent of the contract amount.

Letter of credit:

Where required the procuring agency may incorporate the provision of letter of credit
(LC) and International Chamber of Commerce incoterms, in such processes where shipments and
custom clearance are involved and where procuring agency€™s bank mitigate procurement risk

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in terms of quality assurance and delivery mechanism and bidder€™s bank in terms of its
payments.

Limitation on negotiations:

1. Without changing the cost and scope of work or services, the procuring agency may negotiate
with the successful bidder (with a view to streamline the work or task execution, at the time of
contract finalization) on methodology, work plan, staffing and special conditions of the
contract.
2. Authority may determine the extent and types of negotiations on procurement by regulations.

Confidentiality.-

The procuring agency shall keep all information regarding the technical or final
evaluation confidential, as the case may be, until the time of the announcement of the respective
evaluation reports in accordance with the requirements of rule 35.

Maintenance of Record and freedom of Information

Record of procurement proceedings:

 All procuring agencies shall maintain a record of their respective procurement

proceedings along with all associated documentation for a minimum period of five years.
 Such maintenance of record shall be subject to the regulations framed in this regard from
time to time.

Public access and transparency:

As soon as a contract has been awarded the procuring agency shall make all documents
related to the evaluation of the bid and award of contract public provided that where the
disclosure of any information related to the award of a contract is of proprietary nature or where
the procuring agency is convinced that such disclosure shall be against the public interest, it can
withhold only such information from public disclosure subject to the prior approval of the
Authority.

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 Redressal of Grievances and Settlement of Disputes

Redressal of grievances by the procuring agency:

The procuring agency shall constitute a committee comprising of odd number of persons, with
necessary powers and authorizations, to address the complaints of bidders that may occur prior to
the entry into force of the procurement contract.
1. Any party may file its written complaint against the eligibility parameters, evaluation
criteria or any other terms and conditions prescribed in the bidding documents if found
contrary to the provisions of the procurement regulatory framework, and the same shall be
addressed by the grievance redressal committee
2. (GRC) well before the proposal submission deadline.
3. Any bidder feeling aggrieved by any act of the procuring agency after the submission of
his bid may lodge a written complaint concerning his grievances within seven days of
announcement of the technical evaluation report and five days after issuance of final
evaluation report.
4. In case, the complaint is filed against the technical evaluation report, the GRC shall
suspend the procurement proceedings.
5. In case, the complaint is filed after the issuance of the final evaluation report, the
complainant cannot raise any objection on technical evaluation of the report:
6. Provided that the complainant may raise the objection on any part of the final evaluation
report in case where single stage single envelope bidding procedure is adopted.
7. The GRC shall investigate and decide upon the complaint within ten days of its receipt.
8. Any bidder or party not satisfied with the decision of the GRC, may file an appeal before
the Authority within thirty days of communication of the decision subject to depositing the
prescribed fee and in accordance with the procedure issued by the Authority. The decision
of the Authority shall be considered as final.

Arbitration:

 After coming into force of the procurement contracts, disputes between the parties to the
contract shall be settled by arbitration.

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  The procuring agencies shall provide for a method of arbitration in the procurement
contract, not inconsistent with the laws of Pakistan.

Mis-procurement.-

Any unauthorized breach of these rules shall amount to mis-procurement.

Overriding effect:

The provisions of these rules shall have effect notwithstanding anything to the contrary
contained in any other rules concerning public procurements:

Provided that the prevailing rules and procedures will remain applicable only for the
procurement of goods, services and works for which notice for invitation of bids had been issued
prior to the commencement of these rules unless the procuring agency deems it appropriate to re-
issue the notice for the said procurement after commencement of these rules.(1)

Post-Award Obligations:

Once a contract is awarded, the procuring agency is responsible for monitoring its execution.
Compliance with the agreed terms and conditions is crucial to ensure that public resources are
utilized effectively.

PPRA Rules vs. PPRA Authority Ordinance

Understanding the PPRA Authority Ordinance

The PPRA Authority Ordinance, promulgated in 2002, serves as the foundational legal framework
for establishing the Public Procurement Regulatory Authority. Its primary objectives include:

1. Formation of the PPRA: The ordinance legally establishes the PPRA as an autonomous
body responsible for overseeing public procurement in Pakistan.
2. Mandate and Functions:
o To regulate procurement standards.
o To improve governance, transparency, accountability, and quality in public
procurement.

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 o To recommend policies and guidelines to the government.
o To monitor the implementation of procurement laws and suggest improvements.
o To address issues of maladministration and inefficiency in public procurement.
3. Structure:
o The Authority comprises a Board of Directors with representatives from various
public sector entities and experts from the private sector.
o Key stakeholders include representatives from finance, planning, and private sector
organizations.
o The Ordinance empowers the Board to approve regulations and oversee their
enforcement.
4. Legislative Basis:
o The Ordinance provides the legal authority for the PPRA to frame rules,
procedures, and policies. It serves as the backbone for creating a structured
procurement system at the federal level.

PPRA Rules: Implementation Framework

While the Ordinance sets the stage, the PPRA Rules, introduced in 2004, operationalize the
procurement framework by defining detailed procedures and protocols. Key features include:

1. Scope:
o Applicable to all public procurement conducted by federal government entities.
o Encompasses goods, works, and services procurement.
o Extends to entities funded by the federal government, ensuring uniformity in
procurement standards.
2. Principles of Procurement:
o Ensures fairness, transparency, and competition.
o Emphasizes cost-effectiveness and value for money.
o Encourages equal opportunities for eligible suppliers and contractors.
3. Key Rules:
o Rule 4: Prohibition of corruption and collusion, mandating ethical behavior in all
procurement processes.

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 o Rule 12: Requirement for advertisement of procurement opportunities, ensuring
openness and transparency.
o Rule 33: Mechanism for evaluation and rejection of bids, with criteria clearly
outlined in advance.
o Rule 35: Obligation to announce bid evaluation results within the stipulated
timeframe to ensure accountability.
o Rule 47: Record-keeping obligations for procurement proceedings, ensuring
auditability and transparency.
4. Grievance Redressal:
o Provides a structured framework for addressing grievances through formal
mechanisms.
o Establishes timelines for filing and resolving grievances to ensure efficiency.
5. Monitoring and Compliance:
o Regular reporting and audit mechanisms to ensure compliance with the rules.

Comparison of PPRA Rules and Ordinance

Aspect PPRA Authority Ordinance PPRA Rules

Provides detailed procurement

Purpose Establishes the PPRA as an entity
procedures

Broad governance and oversight Focused on operational

Scope
functions procurement processes

Secondary framework under the

Legal Basis Primary legislation
Ordinance

Empowers the Authority to regulate

Enforcement Operationalized by the Authority
and monitor

Flexibility High-level guidelines Detailed and specific

Stakeholder Outlines roles of key public and Directly involves contractors and
Engagement private entities suppliers

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Transparency Establishes a broad commitment to Implements practical measures for
Mechanisms transparency transparency

Challenges in Implementation

Despite the comprehensive nature of both frameworks, several challenges persist in their
implementation:

1. Capacity Building:
o Limited training and expertise among public procurement officials.
o Inconsistent understanding and application of procurement rules across
departments.
2. Transparency Concerns:
o Despite rules, practices of favoritism, collusion, and corruption occasionally
undermine the system.
o Lack of real-time monitoring and evaluation tools.
3. Lack of Awareness:
o Many stakeholders, including contractors, remain unaware of their rights and
obligations under the PPRA framework.
o Limited public engagement in oversight processes.
4. Overlapping Jurisdictions:
o Coordination between federal and provincial PPRA frameworks can lead to
inconsistencies.
o Absence of a unified database for procurement information.
5. Resistance to Change:
o Resistance from officials and contractors to adopt new technologies and methods,
such as e-procurement.

Recent Developments and Amendments

To address these challenges, recent amendments and initiatives have been introduced:

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 1. E-Procurement Initiatives:
o Adoption of electronic procurement platforms to enhance transparency and
efficiency.
o Development of an integrated e-procurement portal to standardize processes.
2. Capacity Building Programs:
o Training workshops and certifications for procurement officials.
o Collaboration with international organizations to adopt best practices.
3. Amendments:
o Modifications to rules for streamlining bidding and grievance processes.
o Introduction of performance-based contracts to ensure value for money.
4. Increased Monitoring and Auditing:
o Enhanced scrutiny of high-value procurements.
o Deployment of independent auditors to review compliance.

Case Studies

Examining real-life scenarios highlights the practical application and challenges:

1. Successful Implementation:
o Metro Bus Project: Transparent bidding processes resulted in cost savings and
timely project completion.
o School Renovation Initiative: Use of PPRA guidelines ensured quality services
and avoided delays.
2. Issues Identified:
o Circular Debt Management: Lack of compliance with procurement rules led to
inefficiencies and inflated costs.
o Power Sector Projects: Instances of collusion among bidders resulted in
substandard outcomes.

Alternative Procedures for Awarding Contracts beyond PPRA Rules

Contract awarding is an essential part of procurement and project management procedures.

Although many jurisdictions use the Public Procurement Regulatory Authority (PPRA) Rules as

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the basic framework, other methods may be used based on the particular requirements, regulatory
environment, and project type. These alternative processes are described below, with their
application, benefits, and drawbacks, along with the rationale behind their use.

Competitive Bidding

Competitive bidding is a procurement process that invites multiple suppliers or contractors to

submit bids for a project or service. This method ensures transparency and fairness by fostering
open competition.

 Why Use This Procedure Competitive bidding is used:

 Ensure a fair and transparent procurement process.

 Achieve cost efficiency through competition.
 Attract a wide pool of bidders, leading to innovative solutions.

 Types

1. Open Tendering: An advertisement is published, inviting all interested parties to submit

bids. This approach is suitable for large-scale projects where broad participation is desired.
2. Restricted Tendering: Prequalified suppliers or contractors are invited to bid, which is
often used for specialized projects requiring expertise.

 Advantages

 Promotes transparency and fairness.

 Encourages competition, leading to cost efficiency.

 Challenges

 Can be time-consuming.
 Requires detailed documentation and adherence to strict timelines.

Two-Stage Bidding

Two-stage bidding involves a phased evaluation process:

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 1. Stage One: Technical proposals are reviewed without considering cost.
2. Stage Two: Financial bids from technically qualified bidders are evaluated.

 Why Use This Procedure Two-stage bidding is preferred when:

 Technical requirements are complex and need thorough evaluation.

 The project scope is unclear at the outset, requiring refinement.

 Application: This method is commonly used for complex projects, such as infrastructure
development, where technical compliance is crucial.
 Advantages

 Ensures technical competence before financial considerations.

 Allows refinement of requirements between stages.

 Challenges

 Involves additional time and resources.

 May exclude innovative proposals if initial requirements are too rigid.

Request for Proposals (RFP)

RFP is used for procuring services or projects where solutions are not predefined. Bidders submit
both technical and financial proposals for evaluation.

 Why Use This Procedure RFPs are utilized to:

 Procure innovative and creative solutions.

 Balance technical quality with cost considerations.

 Application: RFPs are ideal for consultancy services, IT projects, and creative endeavors.

 Advantages

 Allows flexibility and creativity in proposed solutions.

 Focuses on quality and value rather than cost alone.

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 Challenges

 Evaluation can be subjective, requiring a robust scoring system.

 May lead to higher costs if proposals are overly complex.

Request for Quotations (RFQ)

RFQ is a simplified procurement method where quotes are solicited from a limited number of
prequalified suppliers for low-value contracts.

 Why Use This Procedure

RFQs are chosen to:

 Streamline the procurement of standard goods or services.

 Minimize administrative effort for low-cost items.

 Application: Used for purchasing standard goods or services with well-defined specifications.
 Advantages:

 Quick and efficient.

 Low administrative burden.

 Challenges:

 Limited competition.
 May not ensure the best value for money.

Direct Contracting

Direct contracting, also known as sole sourcing, involves awarding a contract to a single supplier
without competition.

 Why Use This Procedure Direct contracting is applied when:

 There is an urgent need for goods or services (e.g., emergencies).

 The supplier possesses unique capabilities or proprietary rights.

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 Application: Used in emergencies, proprietary product procurement, or when only one
supplier is capable of fulfilling requirements.
 Advantages:

 Saves time in urgent situations.

 Ensures continuity for specialized services.

 Challenges:

 Lacks transparency.
 Prone to abuse and inefficiencies.

Framework Agreements

Framework agreements establish long-term arrangements with suppliers for recurring needs under
pre-agreed terms and conditions.

 Why Use This Procedure: Framework agreements are used to:

 Simplify the procurement of repetitive goods or services.

 Lock in favorable terms for long-term efficiency.

 Application: Used for routine purchases such as office supplies or maintenance services.
 Advantages:

 Reduces procurement lead time.

 Provides cost predictability and efficiency.

 Challenges:

 May limit flexibility for evolving needs.

 Requires careful initial setup and negotiation.

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 Negotiated Procedure

The negotiated procedure involves direct discussions with one or more suppliers to arrive at
mutually agreeable terms.

 Why Use This Procedure: Negotiated procedures are employed for:

 Projects requiring bespoke solutions or high levels of customization.

 Complex projects where standard bidding is impractical.

 Application: Suitable for complex or unique projects where detailed customization is needed.

 Advantages:

 Tailored solutions for specific needs.

 Fosters strong supplier relationships.

 Challenges:

 Risks of favoritism or lack of competition.

 Requires skilled negotiators.

Public-Private Partnerships (PPP)

PPP involves collaboration between public and private sectors to finance, design, construct, and
operate public infrastructure or services.

 Why Use This Procedure: PPPs are implemented to:

 Leverage private sector investment and expertise.

 Share risks and responsibilities between public and private entities.

 Application: Used for large-scale infrastructure projects such as highways, hospitals, and
energy facilities.

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 Advantages:

 Mobilizes private capital and expertise.

 Shares risks between stakeholders.

 Challenges:

 Complex contract management.

 Requires clear accountability frameworks.

E-Procurement Systems

E-procurement leverages digital platforms to conduct procurement processes online, enhancing

transparency and efficiency.

 Why Use This Procedure: E-procurement is adopted to:

 Enhance transparency and auditability.

 Streamline procurement processes and reduce costs.

 Application: Applicable to all types of procurement, particularly where efficiency and

transparency are critical.
 Advantages:

 Reduces administrative costs and time.

 Enhances auditability and transparency.

 Challenges:

 Requires investment in technology and training.

 Vulnerable to cybersecurity risks.

International Guidelines and Frameworks

Procurement funded by international organizations follows specific frameworks such as those of

the World Bank, ADB, or UN.

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 Why Use This Procedure: International guidelines are adhered to for:

 Ensuring compliance with donor requirements.

 Aligning with global best practices and standards.

 Application: Used in projects involving foreign aid or international funding.

 Advantages:

 Aligns with global best practices.

 Ensures accountability to funding agencies.

 Challenges:

 May involve additional compliance burdens.

 Requires familiarity with international guidelines.

Recommendations for Improvement

To strengthen public procurement in Pakistan, the following measures are suggested:

1. Enhanced Training:
o Regular capacity-building programs for procurement professionals.
o Creation of a centralized training institute for procurement education.
2. Technology Integration:
o Full implementation of e-procurement to reduce manual intervention.
o Use of block chain technology to improve transparency and accountability.
3. Stronger Monitoring:
o Periodic audits and stricter enforcement of compliance.
o Establishment of an independent oversight body for procurement.
4. Public Awareness Campaigns:
o Informing stakeholders about the PPRA framework to ensure widespread
understanding and adherence.
o Providing accessible resources and training for suppliers and contractors.
5. Policy Harmonization:

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 o Aligning federal and provincial procurement policies to ensure consistency.
o Establishing a unified procurement database for real-time tracking.

Conclusion

The Public Procurement Regulatory Authority (PPRA) serves as a cornerstone in ensuring

transparency, efficiency, and accountability in public procurement processes in Pakistan. By
establishing a robust regulatory framework, PPRA addresses critical issues such as corruption,
inefficiency, and lack of compliance with international best practices. The various methods of
procurement, rules, and guidelines outlined in this report highlight the systematic approach
adopted to foster competition, fairness, and value for money in public sector acquisitions.

However, challenges such as capacity building, transparency concerns, and resistance to

technological adoption continue to impede the full realization of PPRA's objectives. Recent
advancements, including e-procurement systems and capacity-building initiatives, demonstrate a
commitment to overcoming these hurdles and aligning with global best practices.

To ensure sustainable progress, continuous monitoring, stakeholder engagement, and policy

harmonization are essential. By addressing existing gaps and leveraging innovative solutions, the
PPRA can further enhance its role in promoting economic growth and public trust in
procurement processes.

References

1. [Link]

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