1. 1
PUBLIC PROCUREMENT
(Principles and Methods)
Email: er.snshah@gmail.com
NEPCA
08.08.2023
Cell: 9851004366
Er. Satya Narayan Shah
B.Sc. In Mechanical Engineering (India)
MS in Manufacturing Engineering & Management (UK)
2. Presentation
Outlines
1. Public Procurement (Intro)
2. Principles of public procurement
3. The role and Importance of Public
Procurement
4. Developments in the Public
Procurement process
5. Challenges
6. Procurement Methods And
Practices
7. Contract Types
2
3. सार्वजनिक खरिद (सा.ख.ऐि २.क)
“खरिद” भन्नाले सार्वजननक
ननकायले यस ऐन बमोजजम क
ु नै
मालसामाि, पिामर्व सेर्ा र्ा
अन्य सेर्ा प्राप्त गने र्ा क
ु नै
निमावण कायव गने र्ा गिाउने
कायव सम्झनु पर्व ।
4. सार्वजननक ननकाय
“सार्वजनिक खरिद ऐि, २०६३ (२ ख )
(१)संबैधानिक अंग र्ा निकाय, अदालत, िेपाल सिकािका मन्रालय,
सचिर्ालय, आयोग, वर्भाग र्ा सो अन्तगवतका अन्य जुिसुक
ै सिकािी
निकाय र्ा कायावलय,
(२)िेपाल सिकािको पूणव र्ा अचधकांर् स्र्ाममत्र् र्ा नियन्रणमा िहेको संस्थाि,
कम्पिी, बैंक र्ा सममनत र्ा प्रिमलत कािूि बमोजजम सार्वजनिक स्तिमा
स्थावपत र्ा िेपाल सिकािद्र्ािा गठित आयोग, संस्थाि, प्राचधकिण, निगम,
प्रनतष्िाि, बोर्व, क
े न्र, परिषद ि यस्तै प्रकृ नतका अन्य संगितत संस्था,
(३)िेपाल सिकािद्र्ािा संिामलत र्ा िेपाल सिकािको पूणव र्ा अचधकांर् अिुदाि
प्राप्त वर्श्र्वर्द्यालय, महावर्द्यालय, अिुसन्धाि क
े न्र ि यस्तै प्रकृ नतका
अन्य प्राज्ञिक र्ा र्ैज्ञिक संस्था,
(४)स्थािीय निकाय,
(५)वर्कास सममनत ऐि, २०१३ बमोजजम गठित वर्कास सममनत,
(६)िेपाल सिकािको ऋण र्ा अिुदािमा संिामलत संस्था, ि
(७)िेपाल सिकािले िेपाल िाजपरमा सूििा प्रकार्ि गिी सार्वजनिक निकाय
भनि तोक
े को अन्य संस्था ।
7. Main Principles of Public Procurement
• Value for Money (VFM): Which involves the contemplation of public
organizations to contribute for development of their policies, rules, and
priorities to get the best payback and results against the expenditure
• Ethics: Procurement professionals are expected to follow the professional
ethics.
• Competition: The process of competition reduces the chances of
favoritism, corruption, and fraud. It encourages and enhances the
participation of more suppliers, and that high competition leads to the
reduction in cost and improvement in the quality of the products and
services.
• Transparency: Transparency, the core value of governance and essential
aspect to ensure accountability and minimize corruption, refers to
openness of the system.
• Accountability: To be responsible for our actions and decisions, and
having the obligation to report and/or answer to a designated oversight
entity (and the public) on the consequences of those actions and decisions.
7
8. मसधान्त
➢ सार्वजननक खरिद सम्बन्धी कायववर्चध, प्रक्रिया तथा
निणवयलाई अझ बढी खुला, पािदर्ी, र्स्तुनिष्ि ि
वर्श्र्सिीय बनाउन,
➢ सार्वजननक खरिद प्रक्रियामा प्रनतस्पधाव, स्र्च्छता,
ईमान्दािीता, जर्ाफदेहीता ि वर्श्र्र्िीयता प्रर्द्र्घन गिी
ममतब्ययी तथा वर्र्ेकपूणव ढंगबाट सार्वजननक खचवको
अचधकतम प्रनतफल हालसल गनव,
➢ सार्वजननक ननकायले ननमावण कायव गदाव गिाउदा,
मालसामान, पिामशव सेर्ा तथा अन्य सेर्ा खरिद गदाव
त्यस्तो खरिदको ब्यबस्थापि िमता अलभबृद्घी गिी
उत्पादक, वर्ि
े ता, आपूनतवकताव, ननमावण व्यबसायी र्ा सेर्ा
प्रदायकला वर्िा भेदभार् सार्वजननक खरिद प्रक्रियामा
सहभागी हुने समाि अर्सि सुननजचचत गिी सुर्ासिको
प्रत्याभूनत गनव 8
9. The role of public procurement
9
Role of Public
Procurement
National
Economic
contribution
Social
responsibilities
Industry innovation
Eco-friendly
activities
Leadership in
Government
officials
10. The role of public procurement for national economy
10
National economic contribution
Financial resource
allocation Supply continuity Stable economy
Public Procurement
11. The role of public procurement for
government leader
11
Leadership in government officials
Efficient budget
management
Transparent
work process
More innovative ways
Public Procurement
12. The role of public procurement for
industry innovation
12
Industry innovation
Demand Guarantee Cooperate
Public Procurement
13. The role of public purchasing for
social responsibilities
13
Social responsibilities
Ethics
Support Small and
medium size business
(SMB)
Human right & safety
Public Procurement
14. The role of public procurement for eco-friendly
activities
14
Eco-friendly activities
Regulation
Knowledge transfer Promotion
Public Procurement
15. Importance of Public Procurement
The government is involved in four major economic
activities:
1. Providing the legal framework for all economic
activities,
2. Redistributing income through taxation and
spending;
3. Providing goods and services freely available to
the public such as national defence, public safety,
education, and infrastructure (bridges and roads);
4. Purchasing goods, services and capital assets.
15
16. Developments in the Public Procurement Process
• Public procurement today moved from purchasing
(clerical job) to a strategic level to deliver broader
government objectives
• Public procurement today moved from Fiscal law to
Procurement law in a broader focus
• There has been an effort in public procurement
professionalization
• There has been an effort in searching for global
performance indicators and principles
• Public procurement innovation
• There has been a movement toward e-GP,
16
17. Challenges
1. Contract management
2. Digitalization of procurement and payment processes
3. Resistance to e-procurement adoption for employees,
suppliers, and vendors
4. Reskilling, Upskilling, and Onboarding employees
5. Supplier and vendor onboarding
6. Providing technology support for suppliers and vendors
7. Inaccurate data
8. Poor internal communication
9. Inefficient processes
10.Risk management and mitigation
11. Lack of transparency
12. Inaccurate internal needs analysis
17
18. Challenges
13. Poor vendor sourcing
14. Supply chain disruptions
15. Inaccurate forecasting
16. Budget overspend/Insufficient funds
17. Talent shortage
18. Political interference
19. Conflict of interest
20. Corruption
21. Lack of public confidence
22. External pressure
23. Inflation and price fluctuations
24. Procurement Innovation 18
19. PROCUREMENT METHODS AND PRACTICES
• Types of Procurement Methods {PPA; Procurement Method
to be Selected: 8- (1)(K)}
– International Competitive Bidding (ICB)
– National Competitive Bidding (NCB)
– Sealed Quotation
– Direct Purchase/Negotiation
– Through Consumers Society/Stake holder’s participation
– Force account
– Lump sum rate
– Catalogue Shopping
– Limited Bidding
– Buy Back method
19
20. International Competitive Bidding(ICB): PPA 15
• Wider competition when domestic suppliers are not
available in more than 1 nos.- PPA 15 (1)(K)
• May be invited in any of the following situations;
a. Where the wider competition to get genuine proposal is
not possible
b. Where no bid received in NCB
c. Funding agency's requirement in the project
d. The procuring entity decides that the goods is of complex
and special nature and to be procured through ICB
e. The goods are not produced locally
• Notice period (45 days minimum)- PPA 14 (4)(1); for rebid-
21 days 20
21. National Competitive Bidding (NCB)
• For goods of estimated value more than 20,00,000.00
(twenty lakhs)
• Local production, reasonable cost, prompt delivery
• Availability of local resources
• Rs.200,00,000.00 to Rs. 500,00,00,000.00 estimated
amount (single stage) except provision of PPA 15, the
competition among Local Bidders only- PPR;31(ng)(1)-for
Works
• Notice period (30 days minimum)- PPA 14 (4)(1); in case
of rebid -15 days.
• In case of rebid if there is no responsive bid, 7 days notice
may be used on approval of the higher authority.
21
22. Sealed
Quotation
Provisions
Concerning
Sealed
Quotation:
PPR 84
PPA 40
• Small contracts
• Amount up to 20 Lakh (for goods or services and
works)
• Amount up to 50 Lakh (for medical items)
• Procedure of NCB to follow
• Notice period is small (15 days)
• Used for urgently required goods/ small jobs
• Minimum 3 responsive Quotations required on
the first notification, no minimum number
required for re-notice.
• Validity of quotation 45 days
• No provision of amendment after quotation is
submitted
• To be approved within 15 days of opening of the
quotations
22
23. Direct
Purchase
(PPR, 85
PPA -41)
IT IS JUSTIFIED WHEN:
• Work involved cannot be defined in advance
• Works are small and scattered or in remote
places for which qualified contractors are not
interested or likely to ask unreasonable price
• Crisis situation needing prompt attention
• On prior approval of the chief of the procuring
entity, Only one supplier excusive right to supply
and items not included in the contract.
• Proprietary Goods procurement (approval by
one level higher authority) limitation of 30% of
the contract price.
• Procuring from any other Public entity
• International Government Organization as per
the published rate of goods or services.
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24. Direct Purchase (PPR, 85; PPA -41)
LIMITATIONS:
Direct Purchase from local shops
✓ Up to 10 Lakh estimated -PPR: 85(1A)
✓ Up to 25 Lakh Medical items/Any amount if the firm approved by the
WHO
✓ Up to 5 lakh Consultancy services, Other Services and repair by own
service centres.
✓ Up to 25 Lakhs from Domestic Manufacturer (rate published by GON.
✓ Up to 50 laks for the Foreign VVIP hospitality -PPR:85 (1C)
✓ Not to be procured from one party during one fiscal year -PPR:85 (1B)
✓ 25000USD to repair and maintenance of diplomatic office in foreign
countries -PPR: 85(D)
✓ Proprietary Procurement/Medicinal possible but limited to 30% of
original contract value.- PPR: 85(3),(5)
✓ Direct procurement of More than 1 Lakh on the written proposal from
minimum 3 listed suppliers/contractors/Consultant- PPR: 85(4)
✓ From any public organization -PPR: 85(5 K)
✓ International Governmental Organization- PPR: 85(5 Kh)
25. Lump Sum
Rate PPR 31
(A) ; PPA-
8(1)Ka (7)
• The Bidder proposes the
percentage increase or
decrease in the published
estimated amount.
• Limitation up to 2,00,00,000.00
• No qualification of the
contractor is required
• For the procurement of works
• Multi year contract not allowed
25
26. Catalogue Shopping PPA-8Ka; PPR- 31 Kha
• Rate of the goods published publically by the manufacturer based on
manufacturing specialty, quality of the goods and other facilities.
• The publication may be Manufacturer’s websites or the standard
publications (brochures, catalogues etc. )
• Requesting proposal from manufacturers or their authorized agents
on the technical specifications, characteristics, and performance in
the first step within 7-15 days.
• Ask for the price if the proposals meet the requirement within 3-5
days
• Contract sign within 3 days after submission of the performance
security.
• Limitation; 25,00,000.00 to 60,00,000.00
• Not for multi year contract
• Directives published by PPMO
26
27. • The bidding process is performed among
the limited bidders to procure Goods,
Works or Services if it is known that there
are 3 or less Manufacturers, Suppliers or
Service Providers available.
• Multiyear contract not allowed
• Approval by one level higher officer.
• Notice period 15 days
• Example: Procurement of Aircraft through
this process as there are limited
manufacturers in the world.
27
Limited
Bidding
PPA-8 Ka -9
PPR-31 Ga
28. Buy Back Method; PPA- 8Ka-10; PPR-31 Gha
• Buy new goods while sell the used goods to the supplier.
• This method is used when the goods become obsolete after a
defined period, or not suitable to use further or are not suitable for
auction due to adverse effect on public health and environment.
• List of goods to be approved by the Dept. Chief.
• Procurement shall be made through signing of a procurement
contract by subtracting the valuated amount of old goods from the
prescribed selling price of new goods after obtaining valuation
proposal of old goods from the manufacturer or authorized seller or
supplier of such goods.
• The new goods to be procured pursuant to this Rule shall have
quality standards certified by the authorized institution.
• It shall be set down whether the new goods to be procured can be
re-exchanged or not after the end of life cycle.
• Not allowed for multi-year contract
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29. OTHER METHOD OF PROCUREMENT-PPA(28)
• Two-Stage Bidding: Where the preparation of complete
technical specifications in advance is undesirable or
impractical.
• First stage
✓ unpriced technical proposal on the basis of a
conceptual design or performance specifications are
invited
✓ subject to technical as well as commercial
clarifications and adjustments to be followed by
amended bidding documents
Second Stage
✓submission of final technical proposal and priced bids
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31. अनुसूची – ३, (ननयम २१ को उपननयम (१) सँग
सम्बजन्धत)
मालसामान र्ा अन्य सेर्ाको खरिद सम्झौता
(क) खास मालसामान र्ा अन्य सेर्ा आपूनतव
सम्झौता
(ख) संिचनात्मक र्ा एका दि सम्झौता
(ग) बहुर्र्षीय सम्झौता
(घ) डडजा न, आपूनतव ि जडान सम्झौता
(ङ) टनव की सम्झौता
(च) डडजाइन, आपूनतव, जडान ि ममवत सम्भाि
सम्झौता
31
32. अनुसूची – ४, (ननयम २२ सँग सम्बजन्धत)
ननमावण कायवको खरिद सम्झौता
(क)एका दि सम्झौता
(ख)एकमुष्ट िकम सम्झौता
(ग) लागत सोधभनाव सम्झौता
(घ) समय ि सामग्री दि सम्झौताः
(ङ) डडजाइन ि ननमावण सम्झौताः
(च) व्यर्स्थापन सम्झौता
(र्) कायवसम्पादनमा आधारित ममवत सम्भाि र्ा
व्यर्स्थापन सम्झौता
(ज) वपसर्क
व सम्झौता
(झ) ननमावण ि मिम्मत सम्भाि सभझौता
(ञ) टनव की सभझौता 32
33. अनुसूची – ५, (ननयम २३ सँग सम्बजन्धत )
पिामशव सेर्ाको खरिद सम्झौता
(क). एकमुष्ट िकम सम्झौता
(ख) समयर्द्घ सम्झौता
(ग) कायव सम्पन्नताको आधािमा शुल्क दद ने
सम्झौता
(घ) प्रनतशतमा आधारित सम्झौता
(ङ) सेर्ा समय ननजचचत नभएको सम्झौता
33
34. The Final Words
The public procurement can influence many
areas and change the way of doing things in
the nation. That is the power of public
procurement.
If this is true,
Can public purchasing make society
better?
! The answer is “yes” !
34
