A bill on Public Procurement Act, which was endorsed by the Parliament a few days ago, has made a number of provisions to discourage anomalies prevalent in public procurement and construction.

Anomalies like awarding contracts to the lowest bidder regardless of the viability of the bid and tendency of contractors not doing works despite receiving advance payment are likely to be addressed once the amended Act comes into force.

If a bidder quotes less than the estimated cost by up to 15 percent, 5 percent of the quoted amount should be put as security deposit. And, if the quote is less than the estimated cost by more than 15 percent, say 18 percent, half of that 3 percent value will be added to the security deposit, according to the bill.

The bill, which has been forwarded to the President for approval, has provisioned giving up to 20 percent of the estimated cost in advance payment to the contractor to start works. However, the 20 percent advance payment will be given in two instalments—50 percent initially and the rest based on the progress made in the project.

The contractor must start works within 30 days after receiving the advance payment. “If the advance payment is not used for the actual purpose, the advanced bank guarantee of the contractor will be confiscated,” the bill states. The bill has also provisioned contract termination in the case of misuse of the advance payment.

“It (the amended law) will ease the procurement of goods and services by public agencies,” said Ramesh Kumar Sharma, secretary at the Public Procurement Monitoring Office.

To discourage the awarding of multiple contracts to a single contractor based on the same technical and financial capacity, the bill has provisioned that the bidder has to produce the documents submitted to other implementing agencies.