Procurement Regime under KPPRA

RESOURCE PERSON

DR. QASIM KHAN

EXECUTIVE DIRECTOR
 We are here for this

Goods 16 bn
Procurement
Portfolio: 68bn Works 41 bn

(FY 2017-18) Services 11 bn

Source: FMIU, FD
 Procurement Process

 KPPRA Act, 2012

 Procurement Rules, 2014
 SBDs notified in 2015
 SROs issued from time to time
 Synopsis of KPPRA Act No. XI of 2012

Number of Sections: 38

• Section 1-2: Nomenclature

• Section 03:Principles of procurement
• Section 04-13: Authority working mechanism
• Section 14-35: Responsibility of PE/KPPRA/PG
• Section 35-B: Indemnity
• Section 35-C: Bar of Jurisdiction
• Section 37: Repeal
• Section 38: Removal of Difficulty
 Synopsis of Procurement Rules 2014

Number of Chapters: 05

• Number of Rules:55
• Rule 01-05: Introductory
• Rule 06- 13: Procurement of Goods
• Rule 14- 21: Procurement of Works & Non-consulting
Services
• Rule 22-29: Procurement of Consultancy Services
• Rule 30-55: Miscellaneous Provisions
 Scheme of workflow
Parliament/Provincial Government
Legislation, Rules making, Exemptions, Establishment of KPPRA, Appointment of MD

KPPRA
Regulation of function, Standardization, Enforcement, Advisory, Appellate

Procuring Entity
Procurement Plan, Bids preparation, solicitation, Evaluation, Contract award, execution

Procurement Committees
Enlistment, Pre & Post-qualification, Short listing, Bids opening & evaluation,
Recommendation

Procurement Officer
APP, NIT, solicitation methods, coordination & liaison, Record maintenance
 Public Procurement
(Section (2)(1)(s)

It an Acquisition process,

financed wholly or partly out of public fund;

Public Fund?

Does it includes disposal of public assets?

Reversing cash flow?
 Defining Public Procurement
(Section (2)(1)(s)

maximizing revenue to the Govt. in lieu of the

accumulated assets being disposed of.

by any means including sale, rental, lease,

franchise, outsourcing, transfer of title or any
combination thereof
 Upstream vs. Downstream Procurement

Upstream Activities:
Everything that happens from sourcing to award of
contract: What includes here?

 Downstream Activities:
Everything that happens from awarding to the
closure of contract: What includes here?
 Procuring “Best Evaluated Bid”
(Section (2)(1)(c)

(i) For goods & consulting services:

HRFB is the determination basis,

Where quality and cost as the main parameters

Ratio of weightages: TP & FP
 Procuring “Best Evaluated Bid”
(Section (2)(1)(c)

(ii) For complex professional engineering works,

 HRFB is the determination basis
An additional window of technical committee to be
constituted at P&DD in the manner prescribed,

Proviso:
Provided that all such cases be referred to the said
technical committee by the administrative head of the
department
 Procuring “Best Evaluated Bid”
(Section (2)(1)(c)

(iii) works, other than mentioned in sub-clause (ii)

above, and
(iv) the non- consulting services, the lowest
responsive financial bid (LRFB) amongst technically
responsive bids;
 “Competent Authority”
(Section (2)(1)(h-i)

The concerned officer of a PE,

empowered under DOP, or under other financial laws
and rules duly approved by the competent forum,
to exercise the financial powers & approve the award of
contract
 A Standardized Procurement Lifecycle
Procurement
Planning
(S.22,R.30)
Contract Constitution of
Administration Procurement
(R.50 & 51) Committee (R.32)

Grievances Developing BSDs

(BOQs, Specs, Drawing,
Redressal (S.35) Design) R.33

Enlistment/
Announcement
of BER (R.45) Prequalification
(if any) (R.32-A)

Bids Opening &

Solicitation of
Evaluation
Bids (S.24 & 25)
(R.37,38 &39)
 Developing Annual Procurement Plan (APP)
(Under Section 22 of KPPRA Act & Rule 30 of the Procurement Rules 2014,
Name of Procuring Entity: ____________
S# Brief description Estimated Procurement Date of Date of Date of Remarks
of Procurement Cost Method Initiation of Award of Completion (if any)
Items / objects / Procurement contract of Contract
Package Process
(Tentative) (Tentative) (Tentative)

Prepared by Approved by
Procurement Officer Head of PE
(Name & Designation) (Name & Designation)
 Procurement Committee: (S.34 & R.32)

o Who shall constitute the procurement

committee?

o What shall be the composition?

(Mandatory & optional)

o What shall be the nature of the committee?

(Odd or even)
 TORs of the Committee

o To prepare & recommend approval (NIT & BSD)

o To open & evaluate the bids
o To prepare BER
o To recommend successful bidder for award of
contract
 Developing NIT/ IFB / TENDER NOTICE

o Name & address of PE

o An appropriate description of the assignment
providing scope of work/detail of items to be
procured;
o Method of Procurement to be employed;
o Source for BSDs & requisite details pertaining to
the process;
o Provision of Bid Security
o Deadline, time & place for the bid submission.
 Components of SBDs
o Standard Bidding Documents (SBDs) are comprised of two parts

o Part One: fixed/unchangeable

a. Instruction to the Bidders
b. General Conditions of the Contract (GCC)

o Part Two: procurement specific

a. Invitation for Bids (IFB)
b. Bid Data Sheet (BDS)
c. Special Conditions of the Contract (SCC)

d. Schedule of Requirement (SOR)

e. Evaluation Criteria
 Procurement of Goods & Services

o BSDs shall include:

o SOR/ TORs, the evaluation criteria,
o the extent of bid validity,
o quantity, quality & specifications; qualification and
experience, securities, approach & methodology,
work plan and delivery schedule, pre-shipment
inspection where applicable, schedule of payments
and
o GCC &SCC
 Procurement of Works

o In case of procurement of works, SBDs shall

include:
o Technical specifications, drawings & designs,

o BOQs & Estimated costs whatever applicable,

o Evaluation criteria, expected commencement of
contract and time period for completion, bid validity,
securities demanded, payment schedule, &
o GCC & SCC
 Methods of Advertisement

Rule 10,18 Rule 11,19

Alternate Methods Publication & Adv.

≤ 100,000 - Petty Purchases – No RFQ

>100,000 to ≤ 500,000 - Three Quotations Min.
(RFQ)
>500,000 to ≤ 5 (M) KPPRA Website & PE

> 5 (M) KPPRA Website + 2 widely circulated dailies

Direct Contracting, Repeat Order,
Variation Order
None
 Proof of:
Pre-qualification Process  legal status
(Rule 8 &16)  registration with PEC
 enlistment with the
PE may engage in concerned department;
bidders shall be pre-  valid / renewed relevant
prequalification qualified by soliciting
process When registration
Procurement is above
various details  being a taxpayer
Rs. 10M or including but not  organizational profile,
limited to the relevant experience,
irrespective of its
past performance, list
worth is complex. following providing of clients and references
(Wisdom of PE) pass/fail thresholds,  technical personnel,
computing and
engineering equipment,
plant & machinery
Bidding shall be
Qualified bidders  last three years bank
limited to pre- statements and audited
shall be issued the
qualified firms. reports
tender documents.  managerial capability
etc.

Post qualification
Process (Rule 9&17)
PE may choose to call for
bids with the condition of
post-qualification provided
in the SBDs
Credentials of the next
lowest evaluated responsive
bidders shall then be
checked against all of the
post-qualification criteria
provided in the bidding
documents, and the
contract shall be awarded
to the lowest evaluated
responsive qualified bidder
post qualification Bidding
criteria provided in the documents shall be
bidding documents made available to
shall be based on the all interested
evaluation of technical bidders
and financial worth i.e.
i. works executed,
indicating value of The qualification of
works, the lowest evaluated
responsive bidders
ii. list of technical and
shall be checked to
other staff, ensure whether or
iii. plant / equipment not the bidder is
along with the make & qualified to perform
iv. financial capacity. the works.
If the lowest evaluated responsive bidder is not
found to be qualified on all the post-
qualification criteria provided in the bidding
documents, its bid shall be rejected.
 Bid Evaluation as per Evaluation Criteria (S.28)

o All bids shall be evaluated in accordance with the

evaluation criteria and other terms and conditions
set forth in BSD.

o A bid once opened in accordance with the

prescribed procedure shall be subject to only those
rules, regulations and policies that are in force at the
time of issuance of NIT/IFB.
 Evaluation Parameters

o Bidder’s Profile
o Certified relevant Experience/Past Performance
o Managerial capability
o Work Plan & Proposed Methodology
o Financial Soundness
o Any other indicator as per functional requirement of
PE
 Entertaining Single Bid
(R.6-A, R.14-A & 23-A)

The single bid in goods, works and services may be

considered;

if it meets the evaluation criteria expressed in NIT/BSD

The single bid shall be in conformity with the best-

evaluated bid.

The PE shall make a decision with due diligence and

in light of Section 3 of KPPRA Act.
 Methods Of Public Procurement

1. Open Competitive Bidding

i. Single Stage Single Envelope (1-1)

ii. Single Stage Two Envelope (1-2)
iii. Two Stage Single Envelope (2-1)
iv. Two Stage Two Envelope (2-2)

2. Restricted bidding
3. Alternate / Direct method of procurement
 Procedures of OCB (Goods)

Single stage - Single stage - Two Stage -

Two envelope Single envelope
Single envelope

When procurement of At first stage, Technical

standard method of complex or specialized goods proposal are to be
procurement of are required submitted & are
goods for simple & evaluated as per
routine nature Evaluation criteria
single package containing
separately the financial
&technical proposal; At second stage,
single envelope Financial proposal are to
containing financial be solicited from
proposal / offer qualified bidders
Financial proposals of
technically compliant
bidders are opened only
Least evaluated The lowest offer from
responsive bid is the qualified bidder shall
determining be accepted for award of
Highest Ranking fair bid the contract
factor
 Procedures of OCB
(Works &Non-Consulting Services)
Single stage – Two stage –
Single stage-
Two envelope Two envelope
Single envelope

apply to large and used for turnkey or large

single envelope complex contracts;
containing bidders be prequalified
technical &
financial bid Technical & financial
proposal in separate
envelopes
All bids received
shall be opened &
Technical proposal shall be
evaluated as evaluated and financial bids
mentioned in BD of responsive bidders will be
opened only
Lowest evaluated lowest evaluated
bid will be
responsive bid will be
accepted accepted
or complex contracts
First stage: technical and
financial proposal in
separate envelopes
technical proposal shall
be opened & discussed
with bidders
Second stage :Revised
technical &
supplementary financial
proposal will be
submitted & lowest bid
will be accepted
 Opening of the Bids
o Bid opening (do’s & don’t’s)

o PE shall announce No. of bids received, the bid

prices, the requisite bid security etc.
o No bid shall be rejected at bid opening, except for
late bids,
o Attendance of both the parties shall be maintained
o MOM for bid opening
 Evaluation of Bids

o The PE shall carry out evaluation as under:

o Preliminary examination
o Evaluation on the basis of criteria
o Ranking as per criteria
o Preparation of BER
 Bid Clarification

o What can and what can’t be done

o How to do it
o no change in the price or substance of the bid shall
be sought, offered or permitted except as required to
confirm the correction of arithmetic errors discovered
by the PE in the evaluation of the bids
 Announcement of Results
o The PE shall announce the results in the form of a
report (BER)

o Cooling off period (10 days) prior to the award of a

contract &

o Place the same on its official website as well as on

KPPRA’s website.
 Grievance Redressal Mechanism (S.35)

o Two tier GRM in the following manner:

o File a complaint in writing to the head of PE; &

o File an appeal to the Authority against the decision

of the PE within (15) days.

o (GRR:2017 Operative part of GRM

 Rejection of bids
 Section 30 of KPPRA Act 2012 & Rule 47 of KP-
Procurement 2014
 A PE may reject any or all bids communicating the

reasons for rejection in writing to the Authority at any

time prior to the award of a contract
 See for KPPRA it is on auto mode, where is

compliance?
 What about Bidders?
 Re-bidding
 If the PE has rejected all bids under Rule 47 it may
call for a re-bidding.
 The PE before invitation for re-bidding shall assess

the reasons for rejection and

 may revise specifications, evaluation criteria or any

other condition for bidders, as it may deem

necessary.
 Re-bidding
 Prior approval from the CA must be procured before
going for cancellation of the process.
 A record of the cancellation notice sent to all bidders

must be kept on record.

 The procurement file must also contain information

on the decision to cancel the procurement

proceedings, including the grounds for cancellation.
 Issuance of LOA

 Letter of Acceptance (LOA) is issued to successful

bidder with the advice to submit performance
security mentioned in the bidding documents, which
should not be more than a maximum of 10% of the
contract value.

 Contract is awarded (section31) and agreement is

signed between the parties after GR, if any, is
addressed.
 Conditions for award of Contract (S.31 & R.46)

o Contract shall be awarded on the basis of the best

evaluated bid;

o The best-evaluated bid shall be determined on the

basis of total conformity to the evaluation criteria,
which may include quality or cost or both;

o Confirmation through a written agreement b/w the

parties
 Award of Contract (S.31 & R.46)

o The approving authority in accordance with the

delegation of financial powers rules 2018 shall
approve successful bid.
o PE shall provide the contract form or agreement,
which contains GCC & SCC.
o The contract shall also include the description of
works/services, specifications, TORs, BOQs, activity
schedule and/or any other similar document,
currency, total cost of the contract and payment
schedule etc.
 Record Keeping ( S-20 & R-52)
o The PE shall:

o maintain detailed records of all procurement

proceedings in the manner as prescribed; and

o preserve, maintain and safeguard all relevant

documents issued and received as shall be set out

in the rules.
o The records shall be open to internal & external

audit or to procurement post-review

 Record of procurement proceedings
o Administrative Approval (AA)
o Approved APP
o Notification of Procurement Committee
o NIT/IFB/EOI/RFP along with BSD
o List of bidders to whom documents were issued
o Names & addresses of bidders submitted bids/proposals
o Minutes of Bid Opening and Attendance of the day (Technical / Financial)
o Approved Bid Evaluation Report (BER)
o Grievance Redressal Record
o Name and address of bidder with whom the procurement contract is entered
into and the contract price.
o Purchase Order / Work Order/ Task Order
o Approved copy of Contract/ (s)
o Payment Record
 Miss-procurement (Rule 54)

o Any breach of these rules shall account to

mis-procurement &
o the person responsible for such breach
o shall be liable to be proceeded under
o the relevant law.
 Doing away with Tendering
(Goods & Works)
S: NO & Item GOODS WORKS
1. Petty  Rs.100,000/- on invoice from  Rs.100,000/- on
Purchase single source invoice from single
source
2. RFQs  Rs: 100,000/- to Rs. 500,000/-  Rs: 100,000/- to Rs.
Three Quotations 500,000/- Three
Quotations
3. Direct  repeat orders within a period  where civil works are
Contracting of six months provided that it to be contracted and
does not exceed 15 % of the are a natural
original contract value; extension of an
 procurement through earlier or ongoing
Government organizations subject to limitation
 the acquisition of spare parts of repeat/variation
or supplementary services order;
from original manufacturer/  procurement through
supplier. Government
organizations
S: NO & GOODS WORKS
Item
 price of goods is fixed by where a change of
the government contractor /supplier would
result in incompatibility or
 motor vehicles or disproportionate technical
machinery is purchased difficulties in operation and
from local original maintenance. Provided that
manufacturers or their the contract or contracts do
authorized agents at not exceed three years in
manufacturer’s price duration;
including transportation  In case of emergency as
charges defined in these rules
(e) subject to the conditions of
 In case of emergency as contract, a PE may, insure a
defined in these rules: VO to a contractor to include
Rule (3),(2),(a) works which were outside the
original scope of works to
ensure provided that:
i. the original contract is still
in force;
ii. ii. the PE has satisfied
itself for
S: NO & Item GOODS WORKS
technical reasons that the
placing of the VO is cost
effective;

iii. the value of VO is not

more than 15%of the original
contract; and

(iv) there may be more than

one VO as long as the total
value of all the variation
orders remains within 15% of
the original contract;
4. Negotiated Engage in negotiated
Tendering tendering with one or more .
suppliers or contractors
without prior publication of
a procurement
advertisement in following
cases:
S: NO & Item GOODS WORKS
 specific piece of research or an
experiment, a study or a particular
development;
 for technical or artistic reasons, or
protection of exclusive rights or
intellectual property, manufactured or
delivered only by a particular supplier
 extreme urgency brought about by
events;
 the time limits laid down for open and
limited bidding methods cannot be met.
Provided that any procuring entity
desirous of using negotiated tendering as
a method of procurement shall record its
reasons and justifications in writing for
resorting to negotiated tendering and
shall place the same on record.
S: NO & Item Consulting Services
Rule 23 (d)
Sub-rule (i) – (v)  Subject to prior approval of head of PE

 Exclusive rights as no alternative source is available.

 Compatibility & reasonableness of price

 In case of Emergency

 Small assignments valuing up to Rs 500,000/PKR

 Exceptional worth clause

 Procurement Process Flow Chart

Selection Submission of
Process Performance
Guarantee
Signing
Contract Hoisting of
Preparation & Issuance of Bid
Agreemen
Approval of EOI Letter of Evaluation
t
Notice from Acceptance Report
Competent (BER)
Authority by PE
Publication of
Contract
Publication/ Hoisting Award Opening,
Evaluation
of Bids &
Issuance of Preparing
Shortlisting as Issue RFP to BER
Bidding/EOI Shortlisted
Documents per criteria
Consultants

51