The Public Procurement Monitoring Office (PPMO) is all set to amend the Public Procurement Regulation 2007, making it mandatory for bidders to qualify on both technical and financial fronts to bag government contracts.

Once the new provision comes into effect, the bidders (individuals/firms) have to submit two envelops—the first one mentioning their technical capacity to undertake a particular contract, and the second one stating the cost.

“The government agency calling for the bid has to

first open the first envelope and access the technical capacity of the bidders and prepare a list of those meeting the technical criteria,” said Ramesh Kumar Sharma, secretary at the PPMO, adding it will then open the second envelopes of only those making it to the list.

The new provision is being introduced amid complaints about poor performance in government projects, in which contractors generally bag the contracts on the basis of quoting low prices—sometimes less than the actual cost—and do not complete the projects in time. Under the existing system, both technical and financial proposals are submitted in a single envelope. This, according to government officials, allows even those failing to meet the technical criteria to secure contracts just by quoting low prices. This has resulted in poor performance of contractors in government-funded projects.

Sharma told the Post that his office has already completed the draft amendment and it plans to forward it to the Cabinet for approval. “We will send the draft to the Cabinet within a week,” he said. “Once the Cabinet approves the

draft, the provision will come into effect.”

There is a growing trend of contractors receiving advance payment and not carrying up the job. Shoddy construction by unscrupulous contractors, who usually bid for projects that are beyond their own financial and technical capacities, rip off the treasury and force the government to continue such projects for a number of years.

Some government agencies are also planning to introduce a similar provision while awarding contracts. The Energy Ministry, through the Energy Crisis Reduction Bill, will rolling out the provision. As per the bill, contractors bidding for hydropower projects have to submit two separate envelopes and qualify on both technical and financial fronts.

Ministry officials said the provision is being introduced so as to ensure the contract is awarded to companies/ individuals that are willing and have the ability to develop a particular project.

The Energy Ministry has forwarded the bill to the Finance and Law ministry for approval. After the approval, it will be presented before the Cabinet’s bill committee.

Once okayed by the bill committee, the bill will be sent to the Parliament for final endorsement.