Professional Documents
Culture Documents
ICAN PPA Notes
ICAN PPA Notes
APPLICABLE FOR
All the procurement i.e. acquisitions of any goods (any kind of object, whether movable or immovable, living or nonliving, and this term includes services incidental to the
supply of such goods), consultancy services ( any study, research, survey, design, drawing, supervision, training, testing, software development service or other intellectual
or professional service of a similar nature) or other services (hiring motor vehicles, equipment or goods, carriage or repair and maintenance of goods) or carrying out or
causing to be carried out any construction works (site preparation, excavation, erection, building, installation of equipment or goods and decoration etc., associated with
the construction, reconstruction, demolition, repair or renovation of any structure or works, and this term also includes services incidental to construction work such as
mapping, laboratory testing, satellite photography and seismic investigation), by following entities (known as public entities):
1. Constitutional organ or body, Court, Ministry, Secretariat, Commission, Department of the Government of Nepal or Province Government or any other Governmental
Entity or Office thereunder,
2. Corporation, Company, Bank or Board owned or controlled fully or in majority by the Government of Nepal or province government or Commission, Institute,
Authority, Corporation, Academy, Board, Center, Council established at the public level or formed by the Government of Nepal or province government under the
laws in force and other corporate body of a similar nature,
3. University, College, Research Center, which is operated by the Government of Nepal or receives grants fully or in majority from the Government of Nepal or province
government, and other Academic or Educational Institution of a similar nature,
4. Local body (Village Development Committee, Municipality or District Development Committee)
5. Development Board formed under the Development Board Act, 1956,
6. Body operated with loan or grant of the Government of Nepal or province government, and
7. Other Bodies as specified by the Government of Nepal or province government by publishing a notification in the Nepal Gazette, as a Public Entity.
g) Where the occurrence of special circumstance has created a situation in which, if a procurement is not made immediately, the public entity will sustain further loss, the
Public Entity may procure or cause to be procured immediately.
The chief of the Public Entity shall have to give information of the circumstances above and the detailed description concerning the procurement to be made immediately
to one level higher authority.
Where special circumstances mean a circumstance resulted from natural or divine calamity and sudden or unexpected special circumstance such as epidemic disease,
drought, no rainfall, deluge, earthquake, flood, landslide and firing, and this term also includes a circumstance such as war or internal conflict.
STEPS INVOLVED
S. No. Steps Remarks
1 Establish Public procurement Unit -
2 Prepare Master Procurement Plan If plan/ project to be operated for more than 1 year or Procurement Value > 10 crores p.a.
3 Prepare Annual procurement Plan and include it in budget If Procurement Value > 10 lakhs p.a.
4 Obtain Procurement Requisition -
5 Preparation of Procurement Proceedings -
6 Prepare specifications, plans, drawings, design, special requirement -
or other descriptions
7 Prepare and Update Cost Estimate If Procurement Value > 1 lakh (Except: construction contract)
8 Approve Description and Cost Estimate prepared or Updated above -
9 Prepare or Update Standing List for each procurement separately Procurement of consultancy service if Procurement Value < Rs. 20 lakhs
Procurement of Consumable goods or capital goods or consultancy or other service or
construction work if Procurement Value < 5 lakhs
If work is to be carried out or service is to be obtained from NGOs
10 Set criteria for qualification of bidders or proponents Except: Procurement of a construction work the cost estimate < 2 crores.
11 Selection of Procurement Method -
12 Review of Procurement Decisions If Any
13 Conclude Procurement Contract & Publish Notice -
14 Implementation of Contract -
15 Insurance Procurement Value > 10 lakhs
16 Payment of Running Bill or Invoice -
17 Work Completion Certificate -
18 Final Payment -
19 Dispute Settlement -
20 Termination of Procurement Contract -
21 Remedy on termination of Procurement Contract -
STEP: 6 PREPARE SPECIFICATIONS, PLAN, DRAWING, DESIGN, SPECIAL REQUIREMENT OR OTHER DESCRIPTIONS
Prepare specifications, plan, drawing, design, special requirement or other descriptions pertaining thereto on the basis of relevant objective technical and quality
characteristics and functions of such goods, construction works or services.
Particular brand, trademark, name, patent, design, type, origin or producer’s name not to be mentioned in description.
(Exception: If there is no other way than such mentioning, a particular brand, trademark, name, patent, design, type, origin or producer’s name shall be mentioned and
the words “equivalent to” shall be mentioned thereafter.)
Description not to be made with intention to create obstacles, in any manner, to participation by qualified bidders in the procurement process or to limit competition
without any justification.
No punishment under special circumstances where Special Circumstance means a circumstance resulted from natural or divine calamity and sudden or unexpected
special circumstance such as epidemic disease, drought, no rainfall, deluge, earthquake, flood, landslide and firing, and this term also includes a circumstance such as
war or internal conflict.
d) Provision of repair and maintenance of goods, b) Required educational qualification of key staff of the proponent and
e) Availability of services and reserve spare parts, required experience of work of similar nature,
f) In the case of a supplier supplying goods, along with installation thereof, skills, mastery, c) Mode of performance of work, responsiveness to procedures, terms
experience and reliability of such supplier. of reference, technology transfer and schedule of time,
g) The nature, quantity of goods supplied by the bidders to governmental bodies or private d) Managerial capacity of the proponent,
organizations in the last three years, contract price, date thereof, and the names and e) Financial capacity of the proponent,
addresses of such governmental bodies or private organizations, f) Where request for proposal is made internationally, participation of
h) If the goods to be procured are of complex or exceptional nature, documents showing a native human resources,
check carried out by the public entity itself or on its behalf by a qualified official body of g) Description specifying the public or private organization to which
the country in which the bidders or prequalification proponents are established on the the consultancy service identical to the proposed consultancy
production capacities of the bidders or prequalification proponents, service has been provided during the period of last ten years, the
i) Certificates drawn up by official quality control institutes or agencies of recognized amount and date thereof,
competence attesting the conformity of goods to be procured clearly identified by reference h) Description as to qualification of the key staff proposed for the
to specifications or standards on the basis of inspection of such goods, completion of the proposed work,
j) Samples, supplementary descriptions or photographs required to certify the authenticity of i) Description of his or her managerial staff and average annual human
the goods to be supplied, resources in the last three years, and
k) Proportion of the supply work which the bidders intend to sub-contract. j) Portion of the proposed consultancy service which he or she intends
to get provided through a sub-contractor.
A public entity may, in specifying the criteria as to the qualification of the bidder or pre-qualification proponent participating in the procurement actions of a construction
work costing more than 2 crores rupees, specify such criteria having regard to any or all of the following matters, as required:
a) General experience in the execution of works solely as a prime contractor or of works under a management contract or as a partner of a joint venture or as a
subcontractor,
b) A minimum average annual turnover of construction works of or above the threshold referred to in the bidding documents or prequalification documents, having
completed solely or including the works carried out as a partner of a joint venture. In the case where a national open bidding is invited, the maximum average
turnover of any 3 years out of 10 years shall be taken as the basis.
c) A special experience upon having executed monthly or yearly a construction work equivalent to the minimum amount set forth in the bidding documents or
prequalification documents solely or by concluding a management contract or as a partner of joint venture or a sub-contractor, and having completed successfully
the procurement contracts of the nature, complexity and construction technology similar to the proposed procurement contract in such a number as specified in
such documents,
d) Economic and financial capacity as to the availability of liquidity, credit facility and other financial source (excluding the advance payment under any procurement
contract) which may provide such cash-flow as may be necessary to complete the proposed construct work or other construction work which the concerned bidder
or prequalified proponent has been executing or committed to execute or the accessibility to the source of such property in cases where there is no payment of
money or delay in payment of money required to commence the construction work referred to in the procurement contract,
e) Skilled human resources as specified in the bidding documents or prequalification documents,
f) Main equipment, machineries as specified in the bidding documents or prequalification documents in running condition which are owned by the bidder or pre-
qualified proponent himself or herself or which will be so available by way of rent, lease, contract or other commercial means that they can be used freely during
the period of the procurement contract.
Through force account (अमानात) Works such as repair and maintenance of ordinary nature, regular petty work or sanitation,
(Force account means any construction work to be executed by a public entity through force account shall be caused to be executed through negotiation after breaking it
itself.) into pieces ≤ 1 lakh rupees or be awarded on wage basis by making available the necessary
Through NGOs If Procurement Value ≤ 10 lakhs: Request proposals through notice
If Procurement Value > 10 lakhs: Open expression of intent (Similar to procurement of
consultancy vide same process)
Through Lump sum piece rate Construction for ≤ 2 crores
Through Catalogue Shopping Items Monetary Limits (NRs.): With VAT
Vehicles 60 lakhs
Heavy Equipment 60 lakhs
X-ray, MRI & other health 40 lakhs
related devices
Other machineries 25 lakhs
Through Limited Tendering Procure any goods, construction work, consultancy service or other service which are or
will be available limitedly.
Through Buy Back Method It would not be cost effective, after the expiry of the period of their guarantee or warrantee
specified by their manufacturers, to repair, maintain and bring into use any motor vehicles,
machineries, equipment, devices, chemicals, fertilizers, pesticides or other goods of similar
nature owned by a public entity and they would not yield results conforming to the standards
specified by such manufacturing companies or cannot be reused or purposeful, and that it
would not be appropriate to keep storing them or even to auction them from the point of
view of public health or environment.
a) Canceling a proposal relating to a bid that fails to meet the basic requirements required to be met in relation to procurement or fails to make minimum performance or
fails to complete the work within the specified period or that cannot be modified to meet such requirements or to make such performance or to complete the work
within the specified period or due to any other weakness,
b) Modifying or improving the technical specifications, evaluation criteria and terms and conditions of the procurement contract in order to increase competition,
c) Determining the evaluation system in order to determine the appropriateness of various options submitted by the bidders.
In case of two staged bidding, after the completion of discussions, if any, the Public Entity shall make invitation to second stage bid and in making such invitation to bid,
the bidders whose bids have not been cancelled shall be invited to submit bid along with price in accordance with revised bidding documents.
BID SECURITY
Security means retention money or earnest money furnished as security pending the completion of any obligation/work, and this term also includes bid security or
performance security or an amount furnished for security required to be so furnished for any other reason.
A bidder shall provide as prescribed bid security along with the bid and such security may be forfeited under following conditions:
a) If the bidder requests for modification or withdrawal of bid during the validity period of bid, after the deadline,
b) If the bidder refuses to accept the correction of arithmetical errors found in the bid,
c) If the selected bidder fails to sign the procurement contract in accordance with the terms and conditions set forth in the bidding documents,
d) Where the bidder fails to furnish the performance security as set forth in the bidding documents within the time for signing the procurement contract,
e) If the bidder has changed the bid price or substantive matter of the bid while providing any information in response to clarification sought by the Public Entity
pursuant in the course of examination of bids.
f) If any act contrary to conduct is committed.
After the conclusion of a procurement contract, the Public Entity shall return the bid security of the bidder who has signed the procurement contract and the bid security
of those bidders whose bid security is not liable to forfeiture.
OPENING OF BIDS
The Public Entity shall have to open bids as prescribed at the time and place specified in the bidding documents on the same day immediately after expiry of the
deadline for the submission of bids.
The chief of public entity shall form a committee under convenorship of the procurement official and consisting of at least two members to open the bids or proposals
registered with the public entity, and cause such bids or proposals to be opened in presence of the bidders or their representatives at the pre-determined time.
Provided that nothing shall bar the opening of bids or proposals for the sole reason that a bidder or his or her representative is not present.
The public entity shall, open the envelope of every bid which is requested by the bidder for withdrawal and read out the name of such a bidder and then open all envelopes
submitted for modification of bids and read out the content inside such envelopes.
Then after the public entity shall open every submitted bid one by one, and read out contents of such a bid, prepare a record (Muchulka) thereof and cause such a record
(Muchulka) to be signed by the concerned bidder or his or her representative who is present.
EXAMINATION OF BIDS
The Public Entity shall have to submit to the evaluation committee the bids opened above and the committee shall, prior to evaluating the bids, examine the bids in order
to ascertain the following matters:
a) Whether documents establishing that the bidder is qualified under law to submit the bid are submitted or not,
b) Whether the bid is complete in accordance with the instructions to bidders set forth in the bidding documents or not and whether it is signed by the bidder or by the
bidder’s authorized agent or not,
c) Where a bid security is required to be submitted along with the bid, whether a bid security of such type, period and amount as set forth in the bidding documents is
accompanied with the bid or not,
RESOURCE PERSON: CA MAHESH GYAWALI 14
CLASS NOTES ONLY: FOR CAP III & CA MEMBERSHIP EXAMINATION: PUBLIC PROCUREMENT ACT
d) Whether the bid is substantially responsive to the technical specifications set forth in the bidding documents and the terms and conditions of procurement contract
attached with the bidding documents or not.
In examining the completeness of bids pursuant to clause (b) above, the following matters shall be examined:
a) Whether a power of attorney for the authorized agent or local agent of the bidder is submitted,
b) Where a joint venture agreement is necessary, whether such agreement is submitted,
c) Whether documents establishing the eligibility of the bidder and of goods mentioned by the bidder are submitted,
d) Whether necessary document relating to the qualifications of the bidder is submitted,
e) Where the bidding documents require the submission of a rate analysis, whether such rate analysis is submitted,
f) Other matters as prescribed.
For two stage biddings:
1. The evaluation committee shall, while evaluating the technical aspect of a bid evaluate the following matters:
a) Scope of the supply of goods, construction work or other service,
b) Technical specifications and operating and performance characteristics of key goods, construction work or other service, and
c) Warranty period.
2. After evaluating the technical aspect of a bid, the evaluation committee shall, while evaluating the financial aspect of such a bid, evaluate the following matters:
a) Period for the supply or completion of goods, construction work or other service,
b) Conditions of payment,
c) Liquidated damages to be paid by the bidder for not completing the work in time and the bonus to which the bidder is entitled for completing the work before time,
d) Bidder’s liability towards warranty,
e) Liability to be fulfilled by the bidder,
f) If the bidder has added any other conditions to the proposed procurement contract, such conditions.
The Public Entity may, in the course of examining the bids pursuant to this Section, ask bidders for necessary information and the concerned bidder shall have to provide
the information sought by the Public Entity and in providing such information, no change or alteration in the bid price or other substance of the bid shall be allowed.
While examining the qualification, if the qualification of a bidder is found to be substantially lower than what was at the prequalification stage, the bid of such a bidder
shall be rejected.
If any arithmetical error is found in a bid in examining bids pursuant to this Section, the Public Entity may correct such an error, and where, in making such correction,
there exists a discrepancy between unit rate and total amount, the unit rate shall prevail, and the total amount shall be corrected as per the same rate.
NON-PROCESSING OF BIDS
a) Not sealed,
b) Not submitted within the time frame,
c) Withdrawn,
d) Not in accordance with prequalification requirements,
e) Bids submitted by mutual collusion,
f) Cancelled.
EVALUATION OF BIDS
Where a bid is found containing minor deviations in the matters such as the technical specifications, descriptions and characteristics etc. so as not to reject the bid, the
value of such deviations shall be quantified, to the extent possible, and included in the evaluation of bids however if the value of minor deviations in bid exceeds 15% of
the bid price of the bidder, such a bid shall be deemed to be substantially non-responsive; and shall be excluded from evaluation.
(Minor deviations mean such deviations that do not materially depart from the matters such as the technical specifications and descriptions as set forth in the bidding
documents.)
Bid shall be evaluated in accordance with the criteria and methodology set forth in the bidding documents; and in carrying out such evaluation, the bid with the lowest bid
price shall be determined by making comparison of the evaluated price of every bid with the evaluated price of the other bids.
The qualifications of the bidder of the bid having the lowest bid price shall be verified in order to ascertain whether it conforms to the qualification criteria set forth in the
bidding documents or not.
Where on examination, the qualification of the bidder of the bid having the lowest bid price is in conformity with the qualification evaluation criteria set forth in the bidding
documents, such bid shall be the lowest evaluated substantively responsive bid.
Where, on examination, the qualification of such bidder is found not to be in conformity with the qualification as evaluation criteria set forth in the bidding documents,
such bid shall be excluded from evaluation; and the qualification of the next bidder having the next lowest bid price shall be examined on the same grounds respectively.
The evaluation committee shall prepare an evaluation report stating, the criteria and methodology of evaluation of the lowest evaluated substantially responsive bid and
submit the report to the Public Entity.
REJECTION OF BIDS OR CANCELLATION OF PROCUREMENT PROCEEDINGS
The Public Entity may, in the following circumstances, reject all bids or cancel the procurement proceedings:
a) If none of the bids are substantially responsive,
b) If agreement could not be reached with bidder,
c) If the bid price of the lowest evaluated substantially responsive bid is substantially above the cost estimate, or
d) If requisitioned goods, construction works, consultancy services or other services are no longer required.
No bid shall be rejected or re-bidding shall be invited only for the reason that only a few bids are or only one bid is substantively responsive.
The Public Entity shall have to communicate to all the bidders a notice along with the reason for the rejection of bids or cancellation of the procurement proceedings.
In making re-invitation to bid because of non-submission of any bid in response to an invitation to bid or cancellation of all bids or cancellation of the bid proceedings, the
modification shall also be carry out in the bidding documents, technical specifications, cost estimate and terms and conditions of procurement contract as per necessity by
reviewing the reasons for such rejection of bids or cancellation of the bid proceedings.
If it is proved that the bidder has submitted bid by collusion among the bidders, such bid shall be rejected.
ACCEPTANCE OF BID AND PROCUREMENT CONTRACT
The Public Entity shall select for acceptance only the lowest evaluated substantially responsive bid.
Within 7 days of the selection of the bid, the Public Entity shall serve a notice of the intent of acceptance of his or her bid to the concerned bidder and the information
regarding the name, address of the bidder whose bid has been so selected and the price of the bid shall also be communicated to the other bidders.
If no bidder makes an application for review of procurement proceedings within a period of seven days of providing the notice, the bid of the bidder selected shall be
accepted and a notice shall be communicated to the bidder to furnish the performance security (refer notice for amount of security) to conclude the procurement contract
within 15 days.
If, within 30 days of the communication of the notice, any bidder whose bid has been rejected requests for grounds for the rejection of its bid, the Public Entity shall have
to communicate such information to that bidder.
The concerned bidder shall have to furnish the performance security and sign the procurement contract.
If the bidder fails to furnish the performance security and sign the procurement contract within that period, the bid security of that bidder shall be forfeited, and the bid of
the other immediately next lowest evaluated substantially responsive bidder shall be accepted and the procurement contract concluded.
If even the next bidder fails to furnish the performance security and sign the procurement contract, the bid of the other immediately next lowest evaluated substantially
responsive bidder, respectively, shall be accepted, and a notice shall be served to that bidder for concluding the procurement contract.
The public entities shall complete the process regarding to approval of bids and procurement contract within the period of validity of bid.
h) If the most necessary construction works, goods or consultancy services or other services within the limit as prescribed but not included in the initial contract due to
failure to foresee and difficult to be completed by separating from the initial contract due to technical or financial reasons, is to be procured.
i) If the service of a particular consultant with his unique qualifications is immediately needed for the concerned work or where the service of same consultant is
indispensable.
Medicinal goods the price of which does not exceed 20 lakhs rupees or goods the price of which does not exceed 15 lakhs rupees which have been manufactured in
Nepal may be directly purchased at the selling price specified by the manufacturer of such goods by publishing a notice in a newspaper of national circulation.
In so making direct procurement, goods with Nepal Standard Marks shall be procured to the extent available. Provided that if there is only one pharmaceutical company
prequalified by the World Health Organization to manufacture any pharmaceutical product, such a pharmaceutical product may be procured through direct negotiation,
irrespective of the amount of such product.
A public entity may make direct procurement of such goods the price of which does not exceed 25 lakhs rupees as manufactured by any cottage industry which is so
specified by the Government of Nepal by notification in the Nepal Gazette as to be a domestic cottage industry, upon making a procurement contract with such a cottage
industry.
PROVISION RELATING TO CONSTRUCTION WORKS THAT MAY BE CAUSED TO BE CARRIED OUT BY USERS COMMITTEE OR BENEFICIARY
COMMUNITY
A construction work or service related thereto the cost estimate of which does not exceed 1 crore rupees may be caused to be executed by or obtained from a users'
committee or beneficiary community consisting only of the inhabitants residing in that place and from the community using such service.
The cost estimate not exceeding 1 crores rupee shall include value added tax, overhead contingency amount and amount of portion of public participation.
A public entity may invite proposals by publishing a public notice setting out the nature, quantity of the concerned work or service, required amount, amount to be borne
by the users' committee or beneficiary community and other necessary matters or such committee or community itself may submit a proposal or application.
In awarding the construction work or service to the users' committee or beneficiary community, payment shall be made only after deducting value added tax, overhead
contingency amount and amount of portion of public participation specified in the cost estimate.
Once the procurement contract is concluded, the public entity may give earlier advance payment not exceeding one third amount of the contract amount to such a
committee or community. The public entity shall settle the advance so given before payment of the final installment.
The users' committee or beneficiary community shall have the technical evaluation of the work, bills, receipts & other documents proving the expenditure of the work
of each installment endorsed by its meeting and submit the same to the concerned public entity.
The users' committee or beneficiary community shall post a notice in the public place of the expenditure made by it in each instalment, and have social audit of the acts
and actions performed by it within such period and in accordance with such process as specified by the Public Procurement Monitoring Office.
Heavy machines such as a loader, excavator, roller, dozer, grader, bitumen distributor and bitumen boiler cannot be used in the construction work to be executed by the
users' committee or beneficiary community. Provided that if the work is so mentioned when the cost estimate was prepared as to be work of complex nature requiring
the use of heavy machines, such machines may be used with the consent of the public entity, on recommendation of the concerned technician.
The users' committee or beneficiary community itself shall complete the work obtained by it and cannot cause such work to be executed by a construction entrepreneur
or sub-contractor.
Once the construction work is completed, the public entity shall transfer the ownership of the project to the users' committee or beneficiary community, also specifying
the responsibility of care, repair and maintenance thereof.
If the users' committee or beneficiary committee is found to have misused any amount received by it, the concerned public entity shall inquire into the matter and recover
such an amount as government dues on pro-rata basis from the office-bearers of the users' committee.
A list of manufacturing companies of the products of similar specifications and quality or their authorized sellers shall be prepared having regard to the descriptions
(catalogues or brochures) containing the specification, quality, price and facilities submitted by the manufacturing companies or their authorized sellers who have been
registered.
An invitation shall, specifying the quantity of the goods to be procured on the basis of the list be made to financial proposals, along with an offer to make discount in
the price or addition to the facilities out of the price and facilities specified by the manufacturers or authorized sellers.
Upon receipt of the proposals the lowest evaluated substantively responsive proponent shall be selected upon making evaluation pursuant to this Regulation on the basis
of, inter alia, the offered discount in the price and addition to the facilities.
The procurement contract shall be made with the proponent selected, against the performance security.
This method shall not be used in the procurement actions requiring the multi-year contract.
Limits for catalogue shopping:
Items Monetary Limits (NRs.): With VAT
Vehicles 60 lakhs
Heavy Equipment 60 lakhs
X-ray, MRI & other health related devices 40 lakhs
Other machineries 25 lakhs
In making procurement the public entity shall so procure only after preparing a list of the old goods and new goods available in the market and obtaining the approval
of the head of department.
This method shall not be used in the procurement actions requiring the multi-year contract.
For procuring consultancy service with cost estimate from 20 lakhs rupees to 10 crores rupees, bids should be obtained from national bidders and competition should be
maintained amongst them.
International level expression of interest shall have to be invited in the following circumstances:
a) To procure consultancy service, the cost of which exceeds the prescribed threshold,
b) If the consultancy service as requisitioned by the Public Entity is not available under competitive price from more than one consultant within the State of Nepal,
c) If no proposal has been submitted in response to invitation to national level proposal for the procurement of consultancy service, and the service has to be procured
from any foreign consultant,
d) If it is necessary to obtain services from a consultant under the foreign aid source by soliciting international expression of interest in accordance with an agreement with
the donor party.
SOLICITING PROPOSALS
The Public Entity shall, upon evaluation, of the qualification, experience and capacity of the intending proponents the expression of interest, make selection of generally
three to six intending proponents and who can provide such consultancy service, and prepare a short list.
Request for proposals from intending proponents, by giving a period of at least 15 days (For up to 20 lakhs) or 30 days (For above 20 lakhs), sending the documents
relating to proposal, as prescribed to the intending proponents who are shortlisted.
The documents relating to proposal shall contain the following matters:
a) The name and address of the Public Entity,
b) The nature of the services to be procured, the time and place when and where the services are to be provided, the terms of reference of the services, the task to be
completed and expected outputs,
c) Instructions to proponent to prepare proposal,
d) Matters that the technical and the financial proposals have to be sealed in separate envelopes, each of which has to clearly indicate the type of proposal outside it and
that both envelopes have then to be sealed in a separate envelope and that the required services have to be mentioned thereon,
e) Technical and financial evaluation weightage,
f) The criteria and weightage marks for the evaluation and comparison of proposal,
Following criteria shall be set forth as required for the evaluation of technical proposal:
Experience of consultants in the task to be performed by consultants,
The quality of proposed methodology for the performance of task by the consultants,
The qualification of the proposed key human resource,
Provision of knowledge and technology transfer,
In the case of international level proposals, the details of key Nepalese human resource proposed for the performance of task.
g) Conditions of the procurement contract,
h) The place, date and time for the submission of proposals,
i) Method for the selection of proposals,
The following methods shall be used for the selection of proposals:
Quality and cost method: The technical and financial proposals shall be evaluated in a combined form and the proposal of the proponent who obtains the highest
marks in such evaluation shall have to be selected as prescribed.
Quality method: Only the proposal of the proponent obtaining the highest marks in the technical proposal shall have to be selected.
Fixed Budget method: A proposal having cost above such budget ceiling shall be rejected and the proposal of the proponent who obtains the highest technical
marks after falling within such budget ceiling shall have to be selected.
Least cost method: The proposal of a proponent having the lowest cost out of the proponents having obtained minimum marks prescribed for being successful
in the technical proposal shall have to be selected.
Other methods: Any consultant may be appointed on the basis of qualification in the following circumstance:
Higher level of expertise is required to do any task, or
Consultancy is needed for a short period of time or time is short for the appointment of a consultant, or
Only some consultants are qualified to perform the required task, or
Much time is needed to select a consultant but adequate time is not available.
j) Statement that proposals shall not be processed in the event of conflict of interest and information relating to legal action if fraud or corruption is committed,
k) Provision that a proponent may make an application for review, against any error or decision made by the Public Entity in carrying out proposal proceedings, and
l) Other matters as prescribed.
OPENING OF PROPOSALS: TECHNICAL & FINANCIAL
After the expiry of the deadline for the submission of proposal, the outer envelope of the proposal received from the proponent shall be opened and the sealed envelope of
technical and financial proposal shall be separated.
Segregate the envelopes of the proposals received after the deadline and those of the proposals duly registered, and shall return unopened the proposals received after the
deadline to the concerned proponents and mention the matter of such return, date and time in the report of procurement action.
Now, open the proposals in the presence of proponents or their representatives. But it shall not bar the opening of a proposal for the reason that the proponent or his or her
representative is not present.
The envelope of financial proposal shall be opened only after making evaluation of the technical proposal.
Open every submitted bid one by one, and read out contents of such a bid, prepare a record (Muchulka) thereof and cause such a record (Muchulka) to be signed by the
concerned bidder or his or her representative who is present.
EVALUATION OF TECHNICAL PROPOSALS
As prescribed in the documents relating to proposal (Point (f) above).
EVALUATION OF FINANCIAL PROPOSALS
As prescribed in the documents relating to proposal (Point (i) above).
A public entity may procure a consultancy service for the following work by selecting the quality method:
a) A work of such nature that expected work from the consultant cannot be clearly ascertained like economic or sectoral study of the country, multi-sector feasibility
study, design of a mechanism for managing and disposing hazardous wastes, design of urban master plan, financial sector reform and in respect of which the public
entity expects a research proposal from the consultant,
b) A work of a type that requires higher expertise and that causes serious and long-term impacts in the future, such as feasibility study or structural engineering design
of large dams or major infrastructure building or policy studies of national importance, management study of large governmental bodies,
c) A work of a type the service charge of which depends upon the quality of work or that may be performed substantially in different ways by each individual or
organization and cost of the competitive proposal of which cannot be compared, such as management consultancy or sectoral and policy studies.
The least cost method may be selected for the work which has already been well practiced, is of regular nature and requires low cost, such as auditing, general engineering
design and procurement agent.
REJECTION OF PROPOSAL AND CANCELLATION OF PROCUREMENT PROCEEDINGS
a) If all the received proposals are not substantially responsive to the terms of reference,
b) If the cost offered by the selected proponent is substantially more than the cost estimate and available budget,
c) If the consultancy service is no longer required or,
d) If it is proved that the proponents have submitted the proposal by mutual collusions.
e) Provided that the proposal of those proponents who have not colluded may be processed.
NEGOTIATIONS WITH THE PROPONENT
Negotiations with the proponent selected may be held in the matter of terms of reference and scope of the proposed services, progress report, and facility to be made
available by the Public Entity.
The proposal of the proponent who has reached to the agreement from the negotiations shall be selected for acceptance.
Within seven days of selection of proposal, the Public Entity shall have to serve a notice of the intention of accepting the proposal to the proponent so selected and to other
short-listed proponents.
If no proponent files an application within seven days of a notice being served, the proposal of the proponent selected shall be accepted and s/he shall be served a notice
by giving a period of fifteen days to come to sign the contract.
If the proponent attends to conclude contract, s/he shall have to sign contract and if s/he does not attend, the Public Entity shall hold negotiations, respectively, with the
proponent having obtained next higher marks in the case of a proponent selected by Quality and cost method or Quality method or Fixed Cost method with the next
proponent having the lowest cost in the case of proponent selected by Least Cost method and conclude contract with such proponent.
The vendor is required to commence the work within 30 days from the date of receipt of advance and provide the update to the related public entity regarding the purpose
of expenses.
The Bank Guarantee may be confiscated if it is found that the advance has not been spent on the purpose for which the advance amount was provided.
VARIATION ORDER: For circumstances that could not be foreseen at the time of signing of procurement contract
Variation Order (%) Issuing Authority
Up to 5 Gazetted 2nd Class Officer or equivalent official of the concerned public entity.
However, if the project cost has been approved by the higher authority, the authority to issue the variation order should also not be lower authority.
Up to 10 Gazetted 1st Class Officer or equivalent official of public entity.
However, if the project cost has been approved by the higher authority, the authority to issue the variation order should also not be lower authority.
Up to 15 Departmental Head Or
Supreme Executive Authority. For example, Governor of Nepal Rastra Bank, Managing Director of Nepal Oil Corporation etc.
From 15 to 25 Secretary of Ministry or equivalent head of the public entity
Above 25 Council of Ministers, Government of Nepal
However, the Departmental Head will have authority to issue the variation order of more than 15% if the total procurement value is up to sixty lakhs Rupees.
PRICE ADJUSTMENT IN PROCUREMENT CONTRACT
Unless otherwise provided in procurement contract, if price needs to be adjusted in the course of implementation of a procurement contract having duration exceeding 12
months the competent authority may adjust price.
Provided that where a procurement contract has been concluded to procure a public construction work following the invitation of national level bidding and the price of
any construction materials is increased or decreased unexpectedly by more than 10% of the previous price, price shall be adjusted as prescribed by deducting 10% in the
amount so increased or decreased.
Price adjustment cannot be made where the work under the contract is not completed within the period prescribed in such contract and has taken more time due to the
delay by the person who has obtained procurement contract or if procurement contract is concluded on the basis of lump sum contract or fixed budget.
The maximum amount of price adjustment shall not generally be more than 25 % of the original contract price.
The procurement contract may provide that if the amount of price adjustment exceeds that price, the public entity may terminate the procurement contract or negotiate
with the construction entrepreneur, supplier, service provider or consultant in order to limit the contract price within the approved budget or may pursue other measures or
that additional budget shall be arranged.
PROVISION CONCERNING EXTENSION OF CONTRACT PERIOD
Shall be as provided in the concerned procurement contract.
If the work under the procurement contract cannot be completed within the period of such a contract due to force majeure, failure of the Public Entity to make available
the materials to be made available by it or other reasonable causes, the concerned construction entrepreneur, supplier, service provider or consultant shall make an
application, stating the reason therefor, to the concerned public entity for the extension of the period, at least 21 days before the expiration of the term of such contract.
In the case of a procurement contract which has been concluded and of which term has expired prior to 2076.02.23, the concerned construction entrepreneur, supplier,
service provider or consultant shall make an application for the extension of term, not later than 21 days i.e. 2076.03.11.
Upon receipt of an application as above the concerned competent authority may make, or cause to be made, necessary inquiry into the matter. In so making or causing to
be made inquiry, the authority shall have regard to the following matters:
a) Whether the concerned construction entrepreneur, supplier, service provider or consultant has made best efforts to complete the work under the procurement contract
in time or not,
b) Whether the concerned public entity has provided the construction entrepreneur, supplier, service provider or consultant with the matters required to be provided
under the contract or not,
c) Whether the delay in work has been made because of the requirement of documents submission during review or inquiry or not,
d) Whether the delay in work has been made because of a force majeure event or not.
If, upon inquiry, the reason referred to in the application appears to be reasonable, extension may be granted as follows: the authority accepting the bid may extend the
term if it is required to extend the term as follows:
Max 15 % of the original period of the contract By authority accepting the bid
Max 25 % of the original period of the contract By the head of department
More than above (Max extension allowed: 50 % of the original period of the contract) The secretary of the concerned Ministry or entity
In case of any procurement contract concluded prior to 6 June 2019 (23 Jesta 2076) and for the extension of the period of which an application has been made, if it appears
on the basis of, inter alia, the technical report and upon an analysis of the work progress and remaining work that the work under the contract can be completed if the
period is extended, the special class or equivalent officer of the concerned Ministry or entity may so extend the period not exceeding one year that such extension does not
result in any additional financial burden on the public entity or project.
If one fails to complete the work under the contract even within the period so extended, the performance security and other security or guarantee, if any, furnished by such
a person shall be forfeited and the loss and damage resulted from such failure to complete the work shall be recovered in accordance with the prevailing law and such
person shall be blacklisted and subject to action under the prevailing law.
STEP: 15 INSURANCE
(Procurement Value > 10 lakhs)
Except as otherwise provided in the procurement contract, a construction entrepreneur executing a construction work the price of which exceeds one million rupees shall
insure the following matters:
(a) Full replacement costs of the construction work including construction materials, machine, equipment or plant to be used,
Explanation: For the purpose of this clause, "costs" includes the profit as well.
(b) Fifteen percent amount of the replacement costs referred to in clause (a) or additional amount as set out in the procurement contract, in order to cover professional
charges, expenses to be incurred in the demolition, removal of any portion of the construction work, in the removal of debris or wasted materials, expenses for loss
or damage occurred or incidental cost relating thereto,
(c) Adequate amount required for the replacement in the construction site of the equipment and other things brought onto the construction site by a construction
entrepreneur,
(d) Every loss and damage caused to any part or portion of the construction work by whatsoever reason other than that referred above, arising from the date of the
handing over of the construction site till the date of issuance of the taking over certificate to the construction entrepreneur,
(e) The following liabilities of the construction entrepreneur:
Loss and damage caused in the course of discharging construction entrepreneur's obligation during the defect’s liability period, and
Loss and damage caused during the defect’s liability period by any reason arisen prior to the commencement of the defect’s liability period.
The construction entrepreneur shall not bear the obligation for the loss and damage from the insurance caused from the following reasons:
a) War, enmity or invasion,
b) Rebellion, revolution, insurrection or military rule or civil war,
c) Ionizing radiation, radiation of nuclear fuel or nuclear waste originated from the combustion of nuclear fuel or explosion of radioactive toxic or explosion of other
hazardous elements or nuclear assembly or pollution of nuclear portion thereof, and
d) Pressure wave caused by an aircraft or aerial device that flies at a sonic or supersonic speed.
In procuring goods, insurance shall be so made from warehouse to warehouse as to cover all risks including war, strike and fire of an amount equal to at least 110 percent
of the CIP (Carriages and Insurance Paid to) price.
The concerned authority shall, not later than 30 days, approve the running bill or any other bill, invoice and documents submitted, and the public entity shall make payment
of such a bill or invoice as per the procurement contract within that period.
The public entity shall, in making payment, deduct, for retention money, if provided in the contract, 5 % of the amount specified in the running bill or other bill or invoice.
If the procurement contract provides that where prompt payment of the bill or invoice is made by the public entity, the supplier, construction entrepreneur, service provider
or consultant shall provide discount of a certain amount or percentage of such payment, the public entity shall make such payment only after deducting such discount.
The public entity shall make the payment within the period specified in the procurement contract. If it does not make payment within that period, it shall pay interest
thereon as per the procurement contract.
While making payment of more than Rs. 25,000.00 to the supplier, construction entrepreneur, service provider or consultant it shall be made through the account payee
cheque.
d) Keeping confidential all proprietary information of the bidder known by him /her in the course of the procurement proceedings,
e) Not working with a person, firm, organization, company and any other institution of private nature with which s/he had had dealings of procurement at the time of
holding post for two years after retirement,
f) If s/he knows that his/her nearest relatives have participated as a bidder or proponent in the procurement proceedings of his/her involvement, not taking part in such
procurement proceedings by giving immediate notification to one level higher authority,
Explanation: For the purpose of this clause nearest relative means husband, wife, father, mother, son, daughter of a joint family, mother-in-law, father-in-law, elder
brother, younger brother, elder sister, younger sister, son-in-law, sister-in-law or brother-in-law.
g) Not committing an act in contravention of prevailing law, while carrying out procurement proceedings,
h) Not committing corrupt or fraudulent practice nor involving in such act,
i) Not colluding or involving in a group prior to or after submitting bid or proposal with the objective of forbidding or causing to be forbidden the benefit of competition.
CONDUCT OF BIDDER OR OPPONENT
A bidder or proponent shall not carry out or cause to be carried out the following act with the intention of making interference in the procurement process or the
implementation of procurement contract:
a) Giving or offering directly or indirectly improper inducement,
b) Submitting a fact by distortion or misrepresentation,
c) Engaging in corrupt or fraudulent practice or involving in such act,
d) Intervening in the participation of other competing bidder or proponent to be involved in any way in the proceedings relating to bid or proposal,
e) Commit an act of threatening directly or indirectly to cause harm to the body, person or property of any person to be involved in the procurement proceedings or coercive
act,
f) Making collusion or involving in groupism prior to or after submission of bid or proposal with the objective of allocating procurement contract among the bidders or
proponents or fixing the price of bid or proposal artificially or noncompetitively or otherwise forbidding the Public Entity of the benefit of open and free competition,
g) Contacting the Public Entity from the time of the opening of bid or proposal until the notice of acceptance of bid or proposal is given with the objective of causing
interference upon bid or proposal or committing an act of interference in the examination or evaluation of bid or in the evaluation of proposal.
INTEREST
A bidder responsible for preparing bidding documents or specifications of a procurement contract or for supervising the implementation procurement contract or a person
or firm or organization or company affiliated with him/her, or an employee working in such firm or organization or company cannot participate in the bidding proceedings
of such procurement.
Provided that this provision shall not be applicable in the case of a turnkey procurement contract or procurement contract so concluded as to carryout both the design and
construction work.
d) If convicted from a court of law in a criminal offense liable to be disqualified for taking part in procurement contract,
e) If s/he/it is proved of having signed the procurement contract by falsifying qualification or misrepresenting,
f) Any other conditions as prescribed.
A bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person, firm, organization or company blacklisted shall be debarred from
taking part in the procurement proceedings of a Public Entity up to that period.
PROCEDURES FOR BLACKLISTING
If the public entity is required to blacklist any bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person, firm, organization or
company, it shall make a submission to the Public Procurement Monitoring Office, accompanied by detailed description pertaining thereto and reasons for the same and
relevant documents, as well.
When a submission is made, if, having regard to such description, reasons and documents, the Public Procurement Monitoring Office is of the opinion that such bidder,
proponent, consultant, service provider, supplier, construction entrepreneur or other person, firm, organization or company should be restrained immediately from taking
part in public procurements for three years.
If the Public Procurement Monitoring Office makes a decision to impose restraint as above, it shall give a notice to the concerned bidder, proponent, consultant, service
provider, supplier, construction entrepreneur or other person, firm, organization or company no later than seven days of such decision and publish a notice publicly.
The Public Procurement Monitoring Office shall send to his or her office or house a three-day written notice, accompanied by the description, reasons and copies of
documents so received, requiring him or her to submit grounds or explanations, if any, for not being blacklisted.
Upon receipt of a notice, the concerned bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person, firm, organization or company
shall submit to the Public Procurement Monitoring Office his or her explanation along with relevant documents, setting out the grounds and reasons, if any, for not being
blacklisted.
In submitting explanation, the concerned bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person, firm, organization or company
may request the Public Procurement Monitoring Office to make joint hearings between him or her and the concerned public entity.
If a request is made for joint hearings and the Public Procurement Monitoring Office considers appropriate to so make hearings, it shall send a written notice indicating
the place and time for making such hearings to the concerned public entity and the bidder, proponent, consultant, service provider, supplier, construction entrepreneur or
other person, firm, organization or company.
The public entity and the bidder, proponent, consultant, service provider, supplier, construction entrepreneur or other person, firm, organization or company receiving the
notice shall appear before the Public Procurement Monitoring Office within the period specified.
If both parties appear within the period referred, the Public Procurement Monitoring Office shall provide both parties with an opportunity to present their respective written
or oral explanations and statements. Provided that, hearings shall not be prevented only by the reason the any party is absent.
Having regard to, inter alia, the hearings, if any, held, and based on the documents submitted by the public entity and the concerned bidder, proponent, consultant, service
provider, supplier, construction entrepreneur or other person, firm, organization or company, the Public Procurement Monitoring Office shall make decision to or not to
blacklist him or her.
If the Public Procurement Monitoring Office makes a decision to blacklist, it shall give written information thereof to the concerned public entity and the bidder, proponent,
consultant, service provider, supplier, construction entrepreneur or other person, firm, organization or company and publish it in a newspaper of national circulation.
If the Public Procurement Monitoring Office makes a decision not to blacklist, the restraint, if any, imposed shall ipso facto be lifted, and that Office shall publicly publish
information thereof.
The Public Procurement Monitoring Office shall complete the proceedings relating to blacklisting no later than six months after the date of receipt of submission pertaining
thereto.