1. What are these Rules?
(Short Title & Commencement)
They are called the Public Procurement Rules, 2004.
They came into effect immediately on June 9, 2004.
2. Key Definitions (What do certain words mean?)
Bid: A formal offer (tender) from a company or person to do a job or supply goods at a
specific price.
Bidder: The person or company that submits a bid.
Blacklisted: A bidder who is banned because they were involved in corruption, failed to
do their job properly, or broke their promises.
Corrupt & Fraudulent Practices: This includes:
o Coercion: Threatening someone.
o Collusion: Bidders secretly working together to fix prices.
o Corruption: Offering or taking bribes.
o Fraud: Lying or hiding information to get a benefit.
o Obstruction: Stopping others from taking part in the process.
Most Advantageous Bid: The best overall bid, which is not just about the lowest
price, but also considers quality, reliability, and how well it meets all the requirements.
Value for Money: Getting the best possible quality, service, and results for the money
spent.
3. Who do these Rules apply to? (Scope & Applicability)
These rules apply to all federal government departments and agencies in
Pakistan, whether they are buying things inside or outside the country.
4. Basic Principles of Procurement
All purchases must be:
o Fair and Transparent.
o Provide Value for Money.
o Be Efficient and Economical.
5. How are Bidders Selected or Rejected?
Pre-qualification: For complex jobs, the government can check bidders' experience
and financial health first. Only qualified bidders are invited to submit a full bid.
Disqualification: A bidder can be disqualified if they provide false information.
Blacklisting: A bidder can be banned (blacklisted) for:
o Up to 10 years for corruption or fraud.
o Up to 3 years for failing to do the job properly.
o Up to 6 months for backing out of a bid without a good reason.
If one government agency blacklists a bidder, all other agencies must also blacklist
them (this is called cross-debarment).
6. Main Method of Procurement: Open Competitive Bidding
The standard and preferred method is Open Competitive Bidding.
This means the opportunity is advertised publicly, and anyone who meets the criteria
can submit a bid.
7. The Bidding Process (Step-by-Step)
Advertisement:
o All large procurement opportunities must be advertised on the PPRA website and
often in newspapers.
Bid Submission:
o Bids must be submitted in sealed envelopes by a specified deadline.
Bid Opening:
o Bids are opened publicly on the same day as the submission deadline. The bid
amounts are read out loud.
Bid Evaluation:
o Bids are judged based on pre-announced criteria. The goal is to find the "Most
Advantageous Bid".
Award of Contract:
o The contract is given to the bidder with the Most Advantageous Bid.
8. Different Bidding Procedures
Single Stage - One Envelope: Technical and financial offers are in one envelope,
opened and evaluated together.
Single Stage - Two Envelope: Technical and financial offers are in separate
envelopes. The technical envelope is opened and evaluated first. Only the financial
envelopes of technically qualified bidders are opened later.
Two-Stage Bidding: Used for very complex projects. In the first stage, bidders submit
technical proposals without prices for discussion and refinement. In the second stage,
they submit revised technical and financial proposals.
9. Other Methods of Procurement (When Competitive
Bidding isn't used)
In some special cases, other methods can be used:
Petty Purchases: For very small value items (up to Rs. 100,000), a purchase can be
made from a single source.
Request for Quotations: For smaller purchases (Rs. 100,000 to Rs. 500,000), quotes
can be obtained from at least three registered suppliers.
Direct Contracting: Buying directly from one supplier without competition. This is only
allowed in specific situations, like:
o Buying genuine spare parts from the original manufacturer.
o Only one supplier exists in the world.
o In an emergency.
o Buying a car directly from a local manufacturer.
Force Account: The government uses its own department or a state-owned company
to do the work instead of hiring a private contractor.
10. How to Complain? (Grievance Redressal)
A Grievance Redressal Committee (GRC) must be formed by the government
agency to handle complaints from bidders.
A bidder can complain if they think the process is unfair.
Complaints must be filed within a short time (e.g., 7 days after the technical evaluation
report is announced).
If unhappy with the GRC's decision, a bidder can appeal to the PPRA within 30 days.
11. Record Keeping and Transparency
All records related to a procurement must be kept for at least five years.
Once a contract is awarded, the evaluation report and contract details should be made
public to ensure transparency.
are all clauses included in it? kindly add all clause number and descriptions.
Of course. Here is a complete, simplified list of all the clauses and their descriptions
from the provided Public Procurement Rules, 2004 document.
Complete List of All Clauses
Part 1: General Provisions
Rule 1: Short title and commencement
o Names the rules as the "Public Procurement Rules, 2004" and states they are effective
immediately.
Rule 2: Definitions
o Explains the meaning of key terms used in the rules, such as Bid, Bidder, Blacklisted,
Corrupt Practices, and Most Advantageous Bid.
Rule 3: Scope and applicability
o States that these rules apply to all purchases made by all federal government agencies,
both inside and outside Pakistan.
Rule 4: Principles of procurements
o Sets the core principles: all purchases must be fair, transparent, provide value for
money, and be efficient.
Rule 5: International and inter-governmental commitments
o Says that if these rules conflict with an international treaty or agreement, the
international rules will prevail.
Rule 6: Language
o Requires all procurement documents to be in Urdu or English. Local language can be
used if needed, but the English/Urdu version is the official one.
Rule 7: Integrity pact
o For large purchases, a formal "integrity pact" against corruption must be signed
between the government and the supplier.
Rule 7A: e-public procurement
o Allows government agencies to conduct the entire procurement process electronically.
Part 2: Procurement Planning
Rule 8: Procurement planning
o Requires all agencies to plan their purchases for the year in advance.
Rule 9: Limitation on splitting or regrouping of proposed procurement
o Bans the practice of breaking a large purchase into smaller ones to avoid rules. The
annual procurement plan must be advertised.
Rule 10: Specifications
o Specifications for goods must be generic and not favor any specific brand. If a brand
name must be used, "or equivalent" must be added.
Rule 11: Approval mechanism
o Requires clear internal approval from competent authorities before starting any
procurement.
Part 3: Procurement Advertisements
Rule 12: Methods of advertisement
o Details how to advertise procurement opportunities: on the PPRA website, in
newspapers, etc., based on the value of the purchase.
Rule 13: Response time
o Sets the minimum time bidders have to prepare and submit their bids (at least 15 days
for national, 30 days for international bidding).
Rule 14: Exceptions
o Lists the only exceptions where advertising is not required: for national security or when
buying proprietary/unique items from a single source.
Part 4: Pre-qualification, Qualification and Dis-qualification
Rule 15: Pre-qualification of suppliers and contractors
o Allows agencies to check the technical and financial ability of bidders before inviting full
bids, especially for complex projects.
Rule 16: Pre-qualification process
o Describes the process for pre-qualification, including notifying bidders of the results.
Rule 16A: Procurement through framework agreements
o Allows agencies to make long-term agreements (up to 3 years) with pre-selected
suppliers for commonly used items.
Rule 16B: Price adjustment for framework agreements
o Allows for price changes during a framework agreement if market prices change
significantly.
Rule 17: Qualification of suppliers and contractors
o Allows the agency to ask bidders for qualification information at any stage if there is
doubt about their capacity.
Rule 18: Disqualification of suppliers and contractors
o A bidder will be disqualified if they are found to have submitted false information.
Rule 19: Blacklisting of suppliers and contractors
o Details the process and duration for blacklisting bidders for corruption, poor
performance, or breaking bid commitments. Also covers cross-debarment.
Part 5: Methods of Procurement
Rule 20: Principal method of procurement
o Establishes "Open Competitive Bidding" as the main and preferred method.
Rule 21: Open competitive bidding
o Confirms that open bidding must be used for purchases above a certain financial limit.
Rule 21(A): Mechanism for import of commodities
o Provides special, faster procedures for importing essential commodities (like fertilizer,
petrol, sugar) to meet public demand.
Rule 22: Submission of bids
o Bids must be submitted in sealed envelopes to prevent leaks.
Rule 23: Bidding documents
o Lists all the information that must be included in the bidding documents provided to
bidders.
Rule 24: Reservations and preference
o Allows the government to give preference to domestic bidders over foreign bidders in
certain cases, as per government policy.
Rule 25: Bid security
o Allows the agency to ask for a bid security (a financial guarantee) or a bid securing
declaration to ensure bidders are serious.
Rule 26: Bid validity
o Bids must remain valid for a specified period. This period can be extended with the
bidders' consent.
Rule 27: Extension of time for submission of bids
o Allows the deadline for bid submission to be extended if necessary, with proper notice
to all.
Part 6: Opening, Evaluation and Rejection of Bids
Rule 28: Opening of bids
o Bids must be opened publicly on the same day as the submission deadline. Late bids
are rejected.
Rule 29: Evaluation criteria
o The criteria for judging bids must be clear and announced to everyone in advance.
Rule 30: Evaluation of bids
o Bids must be evaluated only based on the pre-announced criteria.
Rule 31: Clarification of bids
o The agency can ask for clarification from a bidder but cannot let them change the
substance of their bid.
Rule 32: Discriminatory and difficult conditions
o Bans the use of conditions that are unfair or impossible for bidders to meet.
Rule 33: Rejection of bids
o Allows the agency to reject all bids if none are suitable.
Rule 34: Re-bidding
o If all bids are rejected, the agency can call for a new bidding process after fixing the
issues.
Rule 35: Announcement of evaluation reports
o The results of the bid evaluation must be made public before the contract is awarded.
Rule 36: Procedures of open competitive bidding
o Describes the different bidding procedures:
(a) Single stage – one envelope
(b) Single stage – two envelope
(c) Two stage bidding procedure
(d) Two stage - two envelope bidding procedure
Rule 37: Conditions for use of different bidding procedures
o Explains when to use each type of bidding procedure from Rule 36.
Rule 37(A): Unsolicited Proposal
o Provides a process for handling unique project ideas submitted by bidders that were not
asked for, ensuring they are still subject to competition.
Part 7: Acceptance of Bids and Award of Contracts
Rule 38: Acceptance of bids
o The contract must be awarded to the bidder with the "Most Advantageous Bid."
Rule 38B: Single responsive bid
o Allows the acceptance of a single bid if it meets all the requirements and offers value
for money.
Rule 39: Performance guarantee
o Allows the agency to require a performance guarantee (security deposit) from the
winning bidder.
Rule 39A: Letter of credit
o Allows the use of Letters of Credit in procurements involving shipments.
Rule 40: Limitation on negotiations
o Limits negotiations with the winning bidder only to minor details, not the price or core
scope.
Rule 41: Confidentiality
o Requires evaluation details to be kept confidential until the official results are
announced.
Rule 42: Alternative methods of procurements
o Lists other methods that can be used instead of open bidding under specific conditions:
(a) Petty purchases (very low value)
(b) Request for quotations (low value, standard items)
(c) Direct contracting (e.g., for spare parts, emergencies, cars)
(d) Negotiated tendering (e.g., for research, extreme urgency)
(e) Force account (using a government department to do the work)
(f) Direct Contracting with State Owned Entities
Rule 43: On account payments
o Requires government agencies to pay their suppliers promptly, within 30 days.
Rule 44: Entry into force of the procurement contract
o Defines when a contract officially becomes active (e.g., upon signing or issuing a
purchase order).
Rule 45: Closing of contract
o Defines when a contract is considered complete and final payments are to be made.
Rule 45(A): Procurement Assignment
o Allows one government agency to assign its procurement functions to another agency.
Part 8: Maintenance of Record and Freedom of Information
Rule 46: Record of procurement proceedings
o Requires all procurement records to be kept for at least five years.
Rule 47: Public access and transparency
o Once a contract is awarded, the evaluation and award details must be made public,
unless it involves confidential information.
Part 9: Redressal of Grievances and Settlement of Disputes
Rule 48: Redressal of grievances by the procuring agency
o Requires every agency to have a Grievance Redressal Committee (GRC) to handle
bidder complaints. It also sets deadlines for filing complaints and for the GRC to decide.
Rule 49: Arbitration
o States that any disputes after the contract is signed should be resolved through
arbitration.
Rule 50: Mis-procurement
o Declares that any breach of these rules is "mis-procurement."
Rule 51: Overriding effect
o States that these rules override any other existing procurement rules.
Schedules
Schedule-I
o Provides a special, very fast-track procurement timeline for essential items like
petroleum, fertilizer, and LNG.
Note: The document shows that some rules have been omitted (like Rule 38A and 52)
or substituted over time through amendments. This list reflects the current, active rules
as per the provided text.