Public Procurement Rules
Public Procurement Rules 2004
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:-
Table of Contents
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;
(b*) "blacklisted" means a bidder that is declared by the Authority untrustworthy after establishing the fact that the bidder was found involved in any corrupt and fraudulent practice or practices; or if the bidder is declared incapable by the Authority due to its established performance failure during the execution of the contract; or if the bidder deviates from its prior commitment or declaration made regarding the bid or proposal submitted by the bidder.
(ba) "call off order" means an order placed by a procuring agency under general terms and pricing on a range of goods under closed framework agreement, without having to negotiate terms every time;
(bb) "closed framework agreement" means an agreement with specified terms and conditions with an agreed price;
(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" in respect of procurement process, shall be either one or any combination of the practices including,-
(i) "coercive practices" which means any impairing or harming or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence the actions of a party to achieve a wrongful gain or to cause a wrongful loss to another party;
(ii) "collusive practices" which means any arrangement between two or more parties to the procurement process designed to stifle open competition for any wrongful gain, and to establish prices at artificial, non-competitive levels;
(iii) "corrupt practices" which means the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence the acts of another party for wrongful gain;
(iv) "fraudulent practices" which means any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation; and
(v) "obstructive practices" which means harming or threatening to harm, directly or indirectly, persons to influence their participation in a procurement process, or affect the execution of a contract;
(fa) "cross debarred" means a bidder debarred by any procuring agency shall be considered as debarred by all the procuring agencies.
(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;
(ga) "e-Procurement" means use of information and communication technologies or digital or electronic means for procurement process;
(gaa) "force account" means execution of procurement of small works and non-consultancy services through direct contracting with any state owned entity having resources to perform that particular assignment subject to ascertaining that it is cost and time effective;
(gb) "framework agreement" means a contractual arrangement which allows a procuring agency to procure goods, services or works that are needed continuously or repeatedly at agreed terms and conditions over an agreed period of time, through placement of a number of orders;
(h) "most advantageous bid" means,-
(i) a bid or proposal for goods, works or services that after meeting the eligibility or qualification criteria, is found substantially responsive to the terms and conditions as set out in the bidding or request for proposals document; and
(ii) evaluated as the highest ranked bid or proposal on the basis of cost or quality or qualification or any combination thereof, as specified in the bidding documents or request for proposal documents which shall be in conformity with the selection techniques to be issued by the Authority;
(ha) "Open framework agreement" means an agreement with specified terms and conditions without an agreed price;
(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;
(ka) "unsolicited project proposal" means any proposal containing a unique and innovative idea and approach, and the same is not submitted in response to any procurement request, however is aligned with the mission and objectives of the procuring agency and is subject to competitive selection process by soliciting counter proposals challenging the initiator's proposal in all the technical and financial aspects; 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.
7A. e-public procurement.-
The procuring agencies may carry out e-procurement process by using information and communication technologies or digital or electronic means, in such manner as to cover any or all aspects of the procurement process, in accordance with the regulations or guidelines to be prescribed by the Authority.
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.-
(1) The procuring agency shall allow the widest possible competition by defining such specifications that shall not favour any single contractor or supplier nor put others at a disadvantage.
(2) Any terms, specifications, standards, features, characteristics and requirements prescribing the technical or quality characteristics shall be generic in nature and shall not include reference to brand name, model number, catalogue number, name or origin of the country or similar classification.
(3) In case, 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, and no other sufficiently precise or understandable way of describing the characteristics of the goods, works or services to be procured is provided, the words "or equivalent" shall be used, after recording specific justifications in writing therein. The procuring agency shall be responsible to define the parameters of "equivalence" for all participants to procurement process, to ensure transparency.
(4) Solicitation documents or notices for disposal of assets by tender, and any additional information made available to a prospective participant, shall specify that the asset is to be sold on "as is where is" basis and shall disclaim liability after sale.
(5) Notwithstanding anything contained in sub-rule (4), a procuring agency shall give a full and accurate description of an asset to be disposed of.
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 five hundred thousand Pakistani Rupees and up to the limit of three million Pakistani 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 three million Pakistani 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.
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:
Provided that for all procurements up to three million Pakistani Rupees, the response time shall be considered from the date of appearance of the advertisement on the Authority's website.
(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.
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.
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.
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 agency may provide for petty purchases through single quotation where value of the object of the procurement is up to the financial limit of one hundred thousand Pakistani Rupee, without resorting to biding or quotations and the contract for the provision of such goods, services or works may be a local purchase order.
(b) request for quotations.-
A procuring agency shall engage in this method of procurement only if the following conditions exist, namely:-
(i) Where the value of procurement is more than one hundred thousand Pakistani Rupee but does not exceed five hundred thousand Pakistani Rupee, the procuring agency may engage in procurement through request for three quotations from GST registered firms, original equipment manufacturers or authorized dealers, without resorting to bidding.
(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:
(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;
(ii) only one manufacturer or supplier exists for the required procurement;
(iii) where a change of supplier would oblige the procuring agency to acquire material having different technical specifications;
(iv) repeat orders not exceeding fifteen per cent of the original procurement;
(v) in case of an emergency;
(vi) when the price of goods, services or works is fixed by the government;
(vii) for purchase of motor vehicle from local original manufacturers.
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 necessary powers and authorizations, to address the complaints of bidders that may occur prior to the entry into force of the procurement contract.
(2) Any party may file its written complaint against the eligibility parameters, evaluation criteria or any other terms and conditions prescribed in the bidding documents if found contrary to the provisions of the procurement regulatory framework.
(3) 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 within seven days of announcement of the technical evaluation report and five days after issuance of final evaluation report.
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.
Amendment History
* Amended vide S.R.O. 65(I)/2006 dated 27-1-2006.
** Amended vide S.R.O. 1241(I)/2006 dated 13-12-2006.
*** Amended vide S.R.O. No. 1022(I)/2008 dated 23-9-2008.
**** Amended vide S.R.O. No.442(I)/2020 dated 15th May, 2020
***** Amended vide S.R.O. No.834(I)/2021 dated 28th June, 2021
****** Amended vide S.R.O. No.140(I)/2021 dated 2nd February, 2024