Islamabad, June 9, 2004

NOTIFICATION

S.R.O. 432(I)/2004.- In exercise of the powers conferred by section 26 of the

Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002), the
Federal Government is pleased to make the following rules, namely:-

1. Short title and commencement.-

(1) These rules may be called the Public Procurement Rules, 2004.

(2) They shall come into force at once.

GENERAL PROVISIONS

2. Definitions.-

(1) In these rules, unless there is anything repugnant in the subject or

context,-

(a) “bid” means a tender, or an offer, in response to an invitation, by a person,

consultant, firm, company or an organization expressing his or its willingness to
undertake a specified task at a price;

(b) “bidder” means a person who submits a bid;

(c) “competitive bidding” means a procedure leading to the award of a

contract whereby all the interested persons, firms, companies or organizations
may bid for the contract and includes both national competitive bidding and
international competitive bidding;

(d) “contractor” means a person, consultant, firm, company or an

organization who undertakes to supply goods, services or works;

(e) “contract” means an agreement enforceable by law;

(f) “corrupt and fraudulent practices” includes the offering, giving, receiving,
or soliciting of any thing of value to influence the action of a public official or the
supplier or contractor in the procurement process or in contract execution to the
detriment of the procuring agencies; or misrepresentation of facts in order to
influence a procurement process or the execution of a contract, collusive
practices among bidders (prior to or after bid submission) designed to establish
bid prices at artificial, non-competitive levels and to deprive the procuring
agencies of the benefits of free and open competition and any request for, or
solicitation of anything of value by any public official in the course of the
exercise of his duty;

(g) “emergency” means natural calamities, disasters, accidents, war and

operational emergency which may give rise to abnormal situation requiring
prompt and immediate action to limit or avoid damage to person, property or
the environment;

(h) “lowest evaluated bid” means,-

(i) a bid most closely conforming to evaluation criteria and other conditions
specified in the bidding document; and

(ii) having lowest evaluated cost;

(i) “Ordinance” means the Public Procurement Regulatory Authority

Ordinance, 2002 (XXII of 2002);

(j) “repeat orders” means procurement of the same commodity from the
same source without competition and includes enhancement of contracts;

(k) “supplier” means a person, consultant, firm, company or an organization

who undertakes to supply goods, services or works; and

(l) “value for money” means best returns for each rupee spent in terms of
quality, timeliness, reliability, after sales service, up-grade ability, price, source,
and the combination of whole-life cost and quality to meet the procuring
agency’s requirements.

(2) The expressions used but not defined in these rules shall have the same
meanings as are assigned to them in the Ordinance.

3. Scope and applicability.-

Save as otherwise provided, these rules shall apply to all procurements

made by all procuring agencies of the Federal Government whether within or
outside Pakistan.
4. Principles of procurements.-

Procuring agencies, while engaging in procurements, shall ensure that the

procurements are conducted in a fair and transparent manner, the object of
procurement brings value for money to the agency and the procurement process
is efficient and economical.

5. International and inter-governmental commitments of the Federal

Government.-

Whenever these rules are in conflict with an obligation or commitment of

the Federal Government arising out of an international treaty or an agreement
with a State or States, or any international financial institution the provisions of
such international treaty or agreement shall prevail to the extent of such conflict.

6. Language.-

(1) All communications and documentation related to procurements of the

Federal Government shall either be in Urdu or English or both. Except where a
procuring agency is situated outside the territories of Pakistan and procurements
are to be made locally, the procuring agency may use the local language in
addition to Urdu or English.

(2) Where the use of local language is found essential, the original
documentation shall be in Urdu or English, which shall be retained on record; for
all other purposes their translations in local language shall be used:

Provided that such use of local language ensures maximum economy and
efficiency in the procurement.

(3) In case of the dispute reference shall be made to the original

documentation retained on record.

7. Integrity pact.-
Procurements exceeding the prescribed limit shall be subject to an
integrity pact, as specified by regulation with approval of the Federal
Government, between the procuring agency and the suppliers or contractors.
 PROCUREMENT PLANNING

8. Procurement planning.-

Within one year of commencement of these rules, all procuring agencies

shall devise a mechanism, for planning in detail for all proposed procurements
with the object of realistically determining the requirements of the procuring
agency, within its available resources, delivery time or completion date and
benefits that are likely to accrue to the procuring agency in future.

9. Limitation on splitting or regrouping of proposed procurement.-

Save as otherwise provided and subject to the regulation made by the

Authority, with the prior approval of the Federal Government, a procuring
agency shall announce in an appropriate manner all proposed procurements for
each financial year and shall proceed accordingly without any splitting or
regrouping of the procurements so planned. The annual requirements thus
determined would be advertised in advance on the Authority’s website as well
as on the website of the procuring agency in case the procuring agency has its
own website.

10. Specifications.-

Specifications shall allow the widest possible competition and shall not
favour any single contractor or supplier nor put others at a disadvantage.
Specifications shall be generic and shall not include references to brand names,
model numbers, catalogue numbers or similar classifications. However if the
procuring agency is convinced that the use of or a reference to a brand name or a
catalogue number is essential to complete an otherwise incomplete specification,
such use or reference shall be qualified with the words “or equivalent”.

*Provided that this rule shall not apply to procurement made by public
sector commercial concerns on the demand of private sector client specifying, in
writing, a particular brand, model or classification of equipment, machinery or
other objects.

*Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 23-09-2008

11. Approval mechanism.-

All procuring agencies shall provide clear authorization and delegation of

powers for different categories of procurement and shall only initiate
procurements once approval of the competent authorities concerned has been
accorded.

PROCUREMENT ADVERTISEMENTS

12. Methods of advertisement.-

*(1) Procurements over one hundred thousand rupees and up to the limit of
two million rupees shall be advertised on the Authority’s website in the manner
and format specified by regulation by the Authority from time to time. These
procurement opportunities may also be advertised in print media, if deemed
necessary by the procuring agency:

*Provided that the lower financial limit for advertisement on Authority’s

website for open competitive bidding shall be the prescribed financial limit for
request for quotations under clause (b) of rule 42.

*(2) All procurement opportunities over two million rupees should be

advertised on the Authority’s website as well as in other print media or
newspapers having wide circulation. The advertisement in the newspapers shall
principally appear in at least two national dailies, one in English and the other in
Urdu.

(3) In cases where the procuring agency has its own website it may also post
all advertisements concerning procurement on that website as well.

(4) A procuring agency utilizing electronic media shall ensure that the
information posted on the website is complete for the purposes for which it has
been posted, and such information shall remain available on that website until
the closing date for the submission of bids.

*Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 13-12-2006

13. Response time.-

*(1) The procuring agency may decide the response time for receipt of bids or
proposals (including proposals for pre-qualification) from the date of publication
of an advertisement or notice, keeping in view the individual procurement’s
complexity, availability and urgency. However, under no circumstances the
response time shall be less than fifteen days for national competitive bidding and
thirty days for international competitive bidding from the date of publication of
advertisement or notice.

All advertisements or notices shall expressly mention the response time

allowed for that particular procurement along with the information for collection
of bid documents which shall be issued till a given date, allowing sufficient time
to complete and submit the bid by the closing date:

Provided that no time limit shall be applicable in case of emergency.

(2) The response time shall be calculated from the date of first publication of
the advertisement in a newspaper or posting on the web site, as the case may be.

(3) In situations where publication of such advertisements or notices has

occurred in both electronic and print media, the response time shall be calculated
from the day of its first publication in the newspapers.

14. Exceptions.-

*It shall be mandatory for all procuring agencies to advertise all

procurement requirements exceeding prescribed financial limit which is
applicable under sub-clause (i) of clause (b) of rule 42. However under following
circumstances deviation from the requirement is permissible with the prior
approval of the Authority,-

(a) the proposed procurement is related to national security and its

publication could jeopardize national security objectives; and

(b) the proposed procurement advertisement or notice or publication of it, in

any manner, relates to disclosure of information, which is proprietary in nature
or falls within the definition of intellectual property which is available from a
single source.

*Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 13-12-2006

 PRE-QUALIFICATION, QUALIFICATION AND DIS-QUALIFICATION OF
SUPPLIERS AND CONTRACTORS

15. Pre-qualification of suppliers and contractors.-

(1) A procuring agency, prior to the floating of tenders, invitation to

proposals or offers in procurement proceedings, may engage in pre-qualification
of bidders in case of services, civil works, turnkey projects and in case of
procurement of expensive and technically complex equipment to ensure that
only technically and financially capable firms having adequate managerial
capability are invited to submit bids. Such pre-qualification shall solely be based
upon the ability of the interested parties to perform that particular work
satisfactorily.

(2) A procuring agency while engaging in pre-qualification may take into

consideration the following factors, namely:-

(a) relevant experience and past performance;

(b) capabilities with respect to personnel, equipment, and plant;

(c) financial position;

(d) appropriate managerial capability; and

(e) any other factor that a procuring agency may deem relevant, not
inconsistent with these rules.

16. Pre-qualification process.-

(1) The procuring agency engaging in pre-qualification shall announce, in the

pre-qualification documents, all information required for pre-qualification
including instructions for preparation and submission of the pre-qualification
documents, evaluation criteria, list of documentary evidence required by
suppliers or contractors to demonstrate their respective qualifications and any
other information that the procuring agency deems necessary for pre-
qualification.

(2) The procuring agency shall provide a set of pre-qualification documents

to any supplier or contractor, on request and subject to payment of price, if any.

Explanation.- For the purposes of this sub-rule price means the cost of
printing and providing the documents only.
(3) The procuring agency shall promptly notify each supplier or contractor
submitting an application to pre-qualify whether or not it has been pre-qualified
and shall make available to any person directly involved in the pre-qualification
process, upon request, the names of all suppliers or contractors who have been
pre-qualified. Only suppliers or contractors who have been pre-qualified shall be
entitled to participate further in the procurement proceedings.

(4) The procuring agency shall communicate to those suppliers or contractors

who have not been pre-qualified the reasons for not pre-qualifying them.

17. Qualification of suppliers and contractors.-

A procuring agency, at any stage of the procurement proceedings, having

credible reasons for or prima facie evidence of any defect in supplier’s or
contractor’s capacities, may require the suppliers or contractors to provide
information concerning their professional, technical, financial, legal or
managerial competence whether already pre-qualified or not:

Provided that such qualification shall only be laid down after recording
reasons therefor in writing. They shall form part of the records of that
procurement proceeding.

18. Disqualification of suppliers and contractors.-

The procuring agency shall disqualify a supplier or contractor if it finds, at

any time, that the information submitted by him concerning his qualification as
supplier or contractor was false and materially inaccurate or incomplete.

19. Blacklisting of suppliers and contractors.-

The procuring agencies shall specify a mechanism and manner to

permanently or temporarily bar, from participating in their respective
procurement proceedings, suppliers and contractors who either consistently fail
to provide satisfactory performances or are found to be indulging in corrupt or
fraudulent practices. Such barring action shall be duly publicized and
communicated to the Authority:

Provided that any supplier or contractor who is to be blacklisted shall be

accorded adequate opportunity of being heard.
 METHODS OF PROCUREMENT

20. Principal method of procurement.-

Save as otherwise provided hereinafter, the procuring agencies shall use

open competitive bidding as the principal method of procurement for the
procurement of goods, services and works.

21. Open competitive bidding.-

*Subject to the provisions of rules 22 to 37 the procuring agencies shall

engage in open competitive bidding if the cost of the object to be procured is
more than the prescribed financial limit which is applicable under sub-clause (i)
of clause (b) of rule 42

22. Submission of bids.-

(1) The bids shall be submitted in a sealed package or packages in such

manner that the contents are fully enclosed and cannot be known until duly
opened.

(2) A procuring agency shall specify the manner and method of submission
and receipt of bids in an unambiguous and clear manner in the bidding
documents.

23. Bidding documents.-

(1) Procuring agencies shall formulate precise and unambiguous bidding

documents that shall be made available to the bidders immediately after the
publication of the invitation to bid.

(2) For competitive bidding, whether open or limited, the bidding documents
shall include the following, namely:-

(a) invitation to bid;

(b) instructions to bidders;

(c) form of bid;

(d) form of contract;

*Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 13-12-2006

(e) general or special conditions of contract;

(f) specifications and drawings or performance criteria (where applicable);

(g) list of goods or bill of quantities (where applicable);

(h) delivery time or completion schedule;

(i) qualification criteria (where applicable);

(j) bid evaluation criteria;

(k) format of all securities required (where applicable);

(l) details of standards (if any) that are to be used in assessing the quality of
goods, works or services specified; and

(m) any other detail not inconsistent with these rules that the procuring
agency may deem necessary.

(3) Any information, that becomes necessary for bidding or for bid
evaluation, after the invitation to bid or issue of the bidding documents to
the prospective bidders, shall be provided in a timely manner and on
equal opportunity basis. Where notification of such change, addition,
modification or deletion becomes essential, such notification shall be made
in a manner similar to the original advertisement.

(4) Procuring agencies shall use standard bidding documents as and when
notified by regulation by the Authority:

Provided that bidding documents already in use of procuring agencies

may be retained in their respective usage to the extent they are not inconsistent
with these rules, and till such time that the standard bidding documents are
specified by regulations.

(5) The procuring agency shall provide a set of bidding documents to any
supplier or contractor, on request and subject to payment of price, if any.

Explanation.- For the purpose of this sub-rule price means the cost of
printing and providing the documents only.
24. Reservations and preference.-

(1) Procuring agencies shall allow all prospective bidders to participate in

procuring procedure without regard to nationality, except in cases in which any
procuring agency decides to limit such participation to national bidders only or
prohibit participation of bidders of some nationalities, in accordance with the
policy of Federal Government.

(2) Procuring agencies shall allow for a preference to domestic or national

suppliers or contractors in accordance with the policies of the Federal
Government. The magnitude of price preference to be accorded shall be clearly
mentioned in the bidding documents under the bid evaluation criteria.

25. Bid security.-

The procuring agency may require the bidders to furnish a bid security
not exceeding five per cent of the bid price.

26. Bid validity.-

(1) A procuring agency, keeping in view the nature of the procurement, shall
subject the bid to a bid validity period.

(2) Bids shall be valid for the period of time specified in the bidding
document.

(3) The procuring agency shall ordinarily be under an obligation to process

and evaluate the bid within the stipulated bid validity period. However
under exceptional circumstances and for reason to be recorded in writing,
if an extension is considered necessary, all those who have submitted their
bids shall be asked to extend their respective bid validity period. Such
extension shall be for not more than the period equal to the period of the
original bid validity.

(4) Bidders who,-

(a) agree to extension of their bid validity period shall also extend the
validity of the bid bond or security for the extended period of the
bid validity;

(b) agree to the procuring agency’s request for extension of bid validity
period shall not be permitted to change the substance of their bids;
and
 (c) do not agree to an extension of the bid validity period shall be
allowed to withdraw their bids without forfeiture of their bid
bonds or securities.

27. Extension of time for submission of bids.-

Where a procuring agency has already prescribed a deadline for the

submission of bids and due to any reason the procuring agency finds it necessary
to extend such deadline, it shall do so only after recording its reasons in writing
and in an equal opportunity manner. Advertisement of such extension in time
shall be done in a manner similar to the original advertisement.

OPENING, EVALUATION AND REJECTION OF BIDS

28. Opening of bids.-

(1) The date for opening of bids and the last date for the submission of bids
shall be the same. Bids shall be opened at the time specified in the bidding
documents. The bids shall be opened at least thirty minutes after the deadline for
submission of bids.

(2) All bids shall be opened publicly in the presence of the bidders or their
representatives who may choose to be present, at the time and place announced
prior to the bidding. The procuring agency shall read aloud the unit price as well
as the bid amount and shall record the minutes of the bid opening. All bidders in
attendance shall sign an attendance sheet. All bids submitted after the time
prescribed shall be rejected and returned without being opened.

29. Evaluation criteria.-

Procuring agencies shall formulate an appropriate evaluation criterion

listing all the relevant information against which a bid is to be evaluated. Such
evaluation criteria shall form an integral part of the bidding documents. Failure
to provide for an unambiguous evaluation criteria in the bidding documents
shall amount to mis-procurement.
30. Evaluation of bids.-

(1) All bids shall be evaluated in accordance with the evaluation criteria and
other terms and conditions set forth in the prescribed bidding documents. Save
as provided for in sub-clause (iv) of clause (c) of rule 36 no evaluation criteria
shall be used for evaluation of bids that had not been specified in the bidding
documents.

(2) For the purposes of comparison of bids quoted in different currencies, the
price shall be converted into a single currency specified in the bidding
documents. The rate of exchange shall be the selling rate, prevailing on the date
of opening of bids specified in the bidding documents, as notified by the State
Bank of Pakistan on that day.

(3) 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
issue of notice for invitation of bids.

31. Clarification of bids.-

(1) No bidder shall be allowed to alter or modify his bid after the bids have
been opened. However the procuring agency may seek and accept clarifications
to the bid that do not change the substance of the bid.

(2) Any request for clarification in the bid, made by the procuring agency
shall invariably be in writing. The response to such request shall also be in
writing.

32. Discriminatory and difficult conditions.-

Save as otherwise provided, no procuring agency shall introduce any

condition, which discriminates between bidders or that is considered to be met
with difficulty. In ascertaining the discriminatory or difficult nature of any
condition reference shall be made to the ordinary practices of that trade,
manufacturing, construction business or service to which that particular
procurement is related.

33. Rejection of bids.-

(1) The procuring agency may reject all bids or proposals at any time prior to
the acceptance of a bid or proposal. The procuring agency shall upon
request communicate to any supplier or contractor who submitted a bid or
 proposal, the grounds for its rejection of all bids or proposals, but is not
required to justify those grounds.

(2) The procuring agency shall incur no liability, solely by virtue of its
invoking sub-rule (1) towards suppliers or contractors who have
submitted bids or proposals.

(3) Notice of the rejection of all bids or proposals shall be given promptly to
all suppliers or contractors that submitted bids or proposals.

34. Re-bidding.-

(1) If the procuring agency has rejected all bids under rule 33 it may call for a
re-bidding.

(2) The procuring agency 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.

35. Announcement of evaluation reports.-

Procuring agencies shall announce the results of bid evaluation in the

form of a report giving justification for acceptance or rejection of bids at least ten
days prior to the award of procurement contract.

36. Procedures of open competitive bidding.-

Save as otherwise provided in these rules the following procedures shall

be permissible for open competitive bidding, namely:-

(a) Single stage – one envelope procedure.-

Each bid shall comprise one single envelope containing, separately,

financial proposal and technical proposal (if any). All bids received shall
be opened and evaluated in the manner prescribed in the bidding
document.

(b) Single stage – two envelope procedure.-

(i) The bid shall comprise a single package containing two separate
envelopes. Each envelope shall contain separately the financial
proposal and the technical proposal;
 (ii) the envelopes shall be marked as “FINANCIAL PROPOSAL” and
“TECHNICAL PROPOSAL” in bold and legible letters to avoid
confusion;
(iii) initially, only the envelope marked “TECHNICAL PROPOSAL”
shall be opened;

(iv) the envelope marked as “FINANCIAL PROPOSAL” shall be

retained in the custody of the procuring agency without being
opened;

(v) the procuring agency shall evaluate the technical proposal in a

manner prescribed in advance, without reference to the price and
reject any proposal which does not conform to the specified
requirements;

(vi) during the technical evaluation no amendments in the technical

proposal shall be permitted;

(vii) the financial proposals of bids shall be opened publicly at a time,

date and venue announced and communicated to the bidders in
advance;

(viii) after the evaluation and approval of the technical proposal the
procuring agency, shall at a time within the bid validity period,
publicly open the financial proposals of the technically accepted
bids only. The financial proposal of bids found technically non-
responsive shall be returned un-opened to the respective bidders;
and

(ix) the bid found to be the lowest evaluated bid shall be accepted.

(c) Two stage bidding procedure.-

First stage

(i) the bidders shall first submit, according to the required

specifications, a technical proposal without price;

(ii) the technical proposal shall be evaluated in accordance with the

specified evaluation criteria and may be discussed with the bidders
regarding any deficiencies and unsatisfactory technical features;
 (iii) after such discussions, all the bidders shall be permitted to revise
their respective technical proposals to meet the requirements of the
procuring agency;

(iv) the procuring agency may revise, delete, modify or add any aspect
of the technical requirements or evaluation criteria, or it may add
new requirements or criteria not inconsistent with these rules:

Provided that such revisions, deletions, modifications or additions are

communicated to all the bidders equally at the time of invitation to submit final
bids, and that sufficient time is allowed to the bidders to prepare their revised
bids:

Provided further that such allowance of time shall not be less than fifteen
days in the case of national competitive bidding and thirty days in the case of
international competitive bidding;

(v) those bidders not willing to conform their respective bids to the
procuring agency’s technical requirements may be allowed to
withdraw from the bidding without forfeiture of their bid security;

Second stage

(vi) the bidders, whose technical proposals or bids have not been
rejected and who are willing to conform their bids to the revised
technical requirements of the procuring agency, shall be invited to
submit a revised technical proposal along with the financial
proposal;

(vii) the revised technical proposal and the financial proposal shall be
opened at a time, date and venue announced and communicated to
the bidders in advance; and

(viii) the revised technical proposal and the financial proposal shall be
evaluated in the manner prescribed above. The bid found to be the
lowest evaluated bid shall be accepted:

Provided that in setting the date for the submission of the revised
technical proposal and financial proposal a procuring agency shall allow
sufficient time to the bidders to incorporate the agreed upon changes in the
technical proposal and prepare their financial proposals accordingly.
(d) Two stage - two envelope bidding procedure.-

First stage

(i) the bid shall comprise a single package containing two separate
envelopes. Each envelope shall contain separately the financial
proposal and the technical proposal;

(ii) the envelopes shall be marked as “FINANCIAL PROPOSAL” and

“TECHNICAL PROPOSAL” in bold and legible letters to avoid
confusion;

(iii) initially, only the envelope marked “TECHNICAL PROPOSAL”

shall be opened;

(iv) the envelope marked as “FINANCIAL PROPOSAL” shall be

retained in the custody of the procuring agency without being
opened;

(v) the technical proposal shall be discussed with the bidders with
reference to the procuring agency’s technical requirements;

(vi) those bidders willing to meet the requirements of the procuring

agency shall be allowed to revise their technical proposals
following these discussions;

(vii) bidders not willing to conform their technical proposal to the

revised requirements of the procuring agency shall be allowed to
withdraw their respective bids without forfeiture of their bid
security;

Second stage

(viii) after agreement between the procuring agency and the bidders on
the technical requirements, bidders who are willing to conform to
the revised technical specifications and whose bids have not
already been rejected shall submit a revised technical proposal and
supplementary financial proposal, according to the technical
requirement;

(ix) the revised technical proposal along with the original financial
proposal and supplementary financial proposal shall be opened at
 a date, time and venue announced in advance by the procuring
agency:

Provided that in setting the date for the submission of the revised
technical proposal and supplementary price proposal a procuring agency shall
allow sufficient time to the bidders to incorporate the agreed upon changes in the
technical proposal and to prepare the required supplementary financial proposal;
and

(x) the procuring agency shall evaluate the whole proposal in

accordance with the evaluation criteria and the bid found to be the
lowest evaluated bid shall be accepted.

37. Conditions for use of single stage two envelope, two stage and two
stage two envelope bidding procedures.-

Single stage one envelope bidding procedure shall ordinarily be the main
open competitive bidding procedure used for most of the procurement. Other
appropriate procedures of open competitive bidding shall be selected in the
following circumstances, namely:-

(a) single stage two envelope bidding procedure shall be used where the bids
are to be evaluated on technical and financial grounds and price is taken into
account after technical evaluation;

(b) two stage bidding procedure shall be adopted in large and complex
contracts where technically unequal proposals are likely to be encountered or
where the procuring agency is aware of its options in the market but, for a given
set of performance requirements, there are two or more equally acceptable
technical solutions available to the procuring agency; and

(c) two stage two envelope bidding method shall be used for procurement
where alternative technical proposals are possible, such as certain type of
machinery or equipment or manufacturing plant
ACCEPTANCE OF BIDS AND AWARD OF PROCUREMENT CONTRACTS

38. Acceptance of bids.-

The bidder with the lowest evaluated bid, if not in conflict with any other
law, rules, regulations or policy of the Federal Government, shall be awarded the
procurement contract, within the original or extended period of bid validity.

39. Performance guarantee.-

Where needed and clearly expressed in the bidding documents, the

procuring agency shall require the successful bidder to furnish a performance
guarantee which shall not exceed ten per cent of the contract amount.

40. Limitation on negotiations.-

Save as otherwise provided there shall be no negotiations with the bidder

having submitted the lowest evaluated bid or with any other bidder:

Provided that the extent of negotiation permissible shall be subject to the

regulations issued by the Authority.

41. Confidentiality.-

The procuring agency shall keep all information regarding the bid
evaluation confidential until the time of the announcement of the evaluation
report in accordance with the requirements of rule 35.

42. Alternative methods of procurements.-

A procuring agency may utilize the following alternative methods of

procurement of goods, services and works, namely:-

(a) petty purchases.-

Procuring agencies may provide for petty purchases where the object of
the procurement is below the financial limit of *twenty five thousand rupees.
Such procurement shall be exempt from the requirements of bidding or
quotation of prices:

*Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 13-12-2006

 Provided that the procuring agencies shall ensure that procurement of
petty purchases is in conformity with the principles of procurement prescribed in
rule 4:

Provided further that procuring agencies convinced of the inadequacy of

the financial limit prescribed for petty purchases in undertaking their respective
operations may approach the Federal Government for enhancement of the same
with full and proper justifications.

(b) request for quotations.-

A procuring agency shall engage in this method of procurement only if

the following conditions exist, namely:-

(i) the cost of object of procurement is below the prescribed limit of

*one hundred thousand rupees:

*Provided that the respective Boards of Autonomous bodies are

authorized to fix an appropriate limit for request for quotations method of
procurement subject to a maximum of rupees five hundred thousand which will
become financial limit under this sub-rule:

(ii) the object of the procurement has standard specifications;

(iii) minimum of three quotations have been obtained; and

(iv) the object of the procurement is purchased from the supplier

offering the lowest price:

Provided that procuring agencies convinced of the inadequacy of the

financial limit prescribed for request for quotations in undertaking their
respective operations may approach the Federal Government for enhancement of
the same with full and proper justifications;

(c) direct contracting.-

A procuring agency shall only engage in direct contracting if the following

conditions exist, namely:-

(i) the procurement concerns the acquisition of spare parts or

supplementary services from original manufacturer or supplier:

*Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 13-12-2006

 Provided that the same are not available from alternative sources;

(ii) only one manufacturer or supplier exists for the required

procurement:

Provided that the procuring agencies shall specify the appropriate fora,
which may authorize procurement of proprietary object after due diligence; and

(iii) where a change of supplier would oblige the procuring agency to

acquire material having different technical specifications or
characteristics and would result in incompatibility or
disproportionate technical difficulties in operation and
maintenance:

Provided that the contract or contracts do not exceed three years in

duration;

(iv) repeat orders not exceeding fifteen per cent of the original
procurement;

(v) in case of an emergency:

Provided that the procuring agencies shall specify appropriate fora vested
with necessary authority to declare an emergency;

*(vi) when the price of goods, services or works is fixed by the

government or

any other authority, agency or body duly authorized by the

Government, on its behalf, and

*(vii) for purchase of motor **vehicle from local original manufacturers

or their authorized agents at manufacturer’s price.

(d) negotiated tendering.-

A procuring agency may engage in negotiated tendering with one or more

suppliers or contractors with or without prior publication of a procurement
notification. This procedure shall only be used when,-

**Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 23-09-2008

*Amended vide Cabinet Division No. 5/37/2005-M-III/Admin (PPRA), dated 27-01-2006
 (i) the supplies involved are manufactured purely for the purpose of
supporting a specific piece of research or an experiment, a study or
a particular development;

(ii) for technical or artistic reasons, or for reasons connected with

protection of exclusive rights or intellectual property, the supplies
may be manufactured or delivered only by a particular supplier;

(iii) for reasons of extreme urgency brought about by events

unforeseeable by the procuring agency, the time limits laid down
for open and limited bidding methods cannot be met. The
circumstances invoked to justify extreme urgency must not be
attributable to the procuring agency:

Provided that any procuring agency 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.

43. On account payments.- All procuring agencies shall make prompt

payments to suppliers and contractors against their invoices or running bills
within the time given in the conditions of the contract, which shall not exceed
thirty days.

44. Entry into force of the procurement contract.-

A procurement contract shall come into force,-

(a) where no formal signing of a contract is required, from the date the
notice of the acceptance of the bid or purchase order has been
given to the bidder whose bid has been accepted. Such notice of
acceptance or purchase order shall be issued within a reasonable
time; or
(b) where the procuring agency requires signing of a written contract,
from the date on which the signatures of both the procuring agency
and the successful bidder are affixed to the written contract. Such
affixing of signatures shall take place within a reasonable time:

Provided that where the coming into force of a contract is contingent upon
fulfillment of a certain condition or conditions, the contract shall take effect from
the date whereon such fulfillment takes place.
45. Closing of contract.-

(1) Except for defect liability or maintenance by the supplier or contractor, as

specified in the conditions of contract, performance of the contract shall be
deemed close on the issue of over all delivery certificate or taking over certificate
which shall be issued within thirty days of final taking over of goods or receiving
the deliverables or completion of works enabling the supplier or contractor to
submit final bill and the auditors to do substantial audit.

(2) In case of defect liability or maintenance period, defect liability certificate

shall be issued within thirty days of the expiry of the said period enabling the
supplier or contractor to submit the final bill. Except for unsettled claims, which
shall be resolved through arbitration, the bill shall be paid within the time given
in the conditions of contract, which shall not exceed sixty days to close the
contract for final audit.

MAINTENANCE OF RECORD AND FREEDOM OF INFORMATION

46. Record of procurement proceedings.-

(1) All procuring agencies shall maintain a record of their respective

procurement proceedings along with all associated documentation for a
minimum period of five years.

(2) Such maintenance of record shall be subject to the regulations framed in

this regard from time to time.

47. Public access and transparency.-

As soon as a contract has been awarded the procuring agency shall make
all documents related to the evaluation of the bid and award of contract public:

Provided that where the disclosure of any information related to the

award of a contract is of proprietary nature or where the procuring agency is
convinced that such disclosure shall be against the public interest, it can
withhold only such information from public disclosure subject to the prior
approval of the Authority.
 REDRESSAL OF GRIEVANCES AND SETTLEMENT OF DISPUTES

48. Redressal of grievances by the procuring agency.-

(1) The procuring agency shall constitute a committee comprising of odd

number of persons, with proper powers and authorizations, to address the
complaints of bidders that may occur prior to the entry into force of the
procurement contract.

(2) Any bidder feeling aggrieved by any act of the procuring agency after the
submission of his bid may lodge a written complaint concerning his grievances
not later than fifteen days after the announcement of the bid evaluation report
under rule 35.

(3) The committee shall investigate and decide upon the complaint within
fifteen days of the receipt of the complaint.

(4) Mere fact of lodging of a complaint shall not warrant suspension of the
procurement process.

(5) Any bidder not satisfied with the decision of the committee of the
procuring agency may lodge an appeal in the relevant court of jurisdiction.

49. Arbitration.-

(1) After coming into force of the procurement contracts, disputes between
the parties to the contract shall be settled by arbitration.

(2) The procuring agencies shall provide for a method of arbitration in the
procurement contract, not inconsistent with the laws of Pakistan.

50. Mis-procurement.-

Any unauthorized breach of these rules shall amount to mis-procurement.

51. Overriding effect.-

The provisions of these rules shall have effect notwithstanding anything

to the contrary contained in any other rules concerning public procurements:

Provided that the prevailing rules and procedures will remain applicable
only for the procurement of goods, services and works for which notice for
invitation of bids had been issued prior to the commencement of these rules
unless the procuring agency deems it appropriate to re-issue the notice for the
said procurement after commencement of these rules.