“Procurement of Works & Non-Consulting Services”

KPPPRA RULES (2014)

Engr.Shahzad Khan
May 2019
WHAT IS PROCUREMENT:
 Acquisition of Goods, Works or Services from an
external source in exchange for money to fulfil one’s
need.
 According to Oxford Dictionary, to procure is simply to
: “Obtain (something), especially with care or effort”.
 Care and Effort quadruple once procurement is carried
out on a large scale and involves heavy investment.
 True for Public Procurement, usually happens on large
scale and refers to acquisition by public bodies.
 To make Procurement Process Lucid and Transparent,
it can be divided into three phases:

 i) FIRST PHASE is Planning phase: involves a need

assessment for purchase of new or improvement of
existing goods or services.
 ii) SECOND PHASE involves selection of a supplier
and an appropraite contract to proceed with the
procurement process.
 iii) FINAL PHASE involves contract administration.

 In a very broad sense the term “PROCUREMENT” is

used to refer to the entire process of acquisition
mentioned above.
WHY IS IT IMPORTANT:
 Public Sector Procurement differs from Private Sector
Procurement.
 It is estimated that annually about 15% of the GDP of world goes
to Public Procurement. (source: The National Procurement
Strategy, 2013-16,PPRA,Isl).
 Major chunk of this high percentage comes from developing
countries that have active infrastructure and social programs.
 In Uganda, for e.g, 70% of public spending goes through the
public procurement system.
 ADB in its report states that procurement reforms improve
spending efficiency by 1% of GDP.
(www.adb.org/sites/default/files/pub/2002/Governancebrief03.pdf)
 Cont.....
 In Pak, PP attracted critical attention of the Govt. when
infrastructure procurement increased as part of the govt
expenditure in late 1990’s.
 Based on World Bank Findings (1999),Govt. of Pak
decided to establish PPRA (public Procurement
Regulatory Authority Ordinance 2002 followed by
promulgation of Public Procurement Rules in 2004).
 Regulations regarding the consultants were introduced in
2009.
 Provincial Govt. also established regulatory authority and
formulated provincial public procurement Rules.
 Principles of Procurement
ECONOMY
AND
EFFICIENCY

COMPETETION TRANSPARENCY

PPROCUREMENT BEST VALUE

MANAGEMENT FOR MONEY
FAIRNESS PRINCIPLES
 Definitions Contd….
Chapter 2(f)“Emergency” shall refer to situation
that poses an immediate risk of loss, or has
caused loss, or has high probability of
escalating to cause immediate danger, to
health, life, property or environment as
covered under the National Disaster
Management Act 2010 (Act No. XXIV of 2010)
and shall include natural calamities,
disasters, accidents, war and breakdown of
operational equipment, plant, machinery or
engineering infrastructures, which may give
rise to abnormal situation requiring prompt
and immediate action to limit or avoid
damage to health, life, property or the
environment 7
 Violation of rules in the Garb of Emergency

3. Applicability of these Rules

(1) These rules shall be applicable to all

public procurements.

(2) Under following circumstances

deviation from the requirements of
advertisement and response time
under these rules is permissible:
 Applicability of these Rules Contd….
(a) in cases of emergency as covered under
the National Disaster Management Act,
2010 (Act No. XXIV of 2010), subject to the
condition,----

(i) that all such Procurements along with

its emergent nature has to be recorded
by the Procuring officer and approved
by the technical head of the procuring
entity under intimation to the Principal
Accounting Officer, Secretary at
Provincial or Deputy Commissioner at
District level;
 Applicability of these Rules Contd….

(ii) that these have to be immediately

intimated to the Accountant General
office or District Accounts office as
the case may be;

(iii) that quantities in all such procurements

shall be limited to the assessed
requirement of emergency only; and

10
 Applicability of these Rules Contd….

(iv) that these shall be used only for

procurements upto maximum for three
months, which may be extended for such
a period that the Government may deem
fit, depending on the nature of
emergency.
 Applicability of these Rules Contd….

(b) Procurement of sensitive nature and

related to national security;

provided that the direct sourcing of all

such procurements shall be duly recorded;

and
 Applicability of these Rules Contd….
(c) direct sourcing to a Government
Organization for provision of Works,
Goods or Services under a cost plus or
fixed contract provided that the
Public Sector Organization shall not
involve a private sector enterprise as a
partner or in the form of a joint venture
or a sub- contractor. The Government
Organizations shall be totally
Government owned and controlled or
semi-autonomous and autonomous
agencies under the administrative
control of Federal Government or
Provincial Government.
Chapter III

PROCUREMENT OF WORKS
AND NON-CONSULTING
SERVICES
Salient Features of Khyber Pakhtunkhwa Public
Procurement of Goods, Works and Services Rules, 2014
Rule-14: Open tendering open competitive bidding
as principal method of procurement
Save as otherwise provided, PE shall use open
competitive bidding as principal method of
procurement for procurement of goods [works] over
the value of Rs. 100,000/-
Procedures adopted for open competitive bidding:
 Single stage – one envelope bidding
- Bid comprising of ONE Envelope containing
Financial Bid.
 16

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014
 single stage – two envelope bidding
- shall apply to large and complex contracts
- bidders shall be pre-qualified
-bid shall comprise a single package containing two separate
envelopes. Each envelope shall contain separately technical
proposal and financial proposal
- envelopes shall be marked as technical proposal and financial
proposal in bold and legible letters
- envelope marked as technical proposal shall contain:
~ experience and past performance in execution of similar contracts
~ capabilities with respect to personnel and construction equipments
~ financial status and capacity
~ any other information asked in notice inviting tenders
Contd..
 17

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

second envelope marked as financial proposal shall contain

price quoted by the bidders and be retained in the custody of
PE without being opened
PE shall evaluate technical proposal on basis of criteria
specified in tender documents without reference to price and
reject any proposal which does not conform to specified
requirements. During technical evaluation, no amendment in
technical proposal shall be permitted. A list of technically
qualified bidders shall be finalized
after evaluation and approval of technical proposals, PE shall at
a time within bid validity period, publicly open financial
proposals of technically accepted bids only. Financial proposals
found technically non-responsive shall be returned un- opened
to respective bidders
Contd..
 18

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

 two stage - two envelope bidding

- shall be used for turnkey or large or complex contracts and
ensures that all technical proposals conform to same
acceptable technical standards required by PE
First stage:
- bid shall comprise single package containing two separate
envelopes. Each envelope shall contain separately financial
proposal and technical proposal
- envelopes shall be marked as financial proposal and technical
proposal in bold and legible letters
- initially, only envelope marked technical proposal shall be
opened
- envelope marked as financial proposal shall be retained in
custody to PE’s without being opened Contd..
 19

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

- bidders willing to meet the requirements of PE shall be allowed to

revise their technical proposals following these discussions
- bidders not willing to conform their technical proposals to revised
requirements of PE shall be allowed to withdraw their respective
bids without forfeiture of their bid security
second stage:
- after agreement on technical requirements, bidders willing to
conform to revised technical specifications and whose bids have
not already been rejected shall submit revised technical proposal
and supplementary financial proposal
- revised technical proposal along with original financial proposal
and supplementary financial proposal shall be opened at date,
time and venue announced in advance by PE, provided PE shall
allow sufficient time to bidders to incorporate agreed upon
changes in technical proposal and prepare supplementary
 20

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

Rule 15: Enlistment:

 Open throughout the year
Committee of FIVE members (Chairperson----BPS-19).
Results shall be made public within five days after the committee has
concluded the business
 Criteria for enlistment shall be based on evaluation of technical and
financial worth i.e. works executed, indicating value of works, list of
technical and other staff, plant/equipment along with the made and
financial capacity
The criteria and list of enlisted bidders shall be posted on
department and Authority web-sites and notice board placed in
respective departments at an accessible site for public viewing
Bidding may be limited to enlisted bidders
 21

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014
Rule 16: Pre-qualification of contractors

Contract worth > 45 Million or work considered as complex

PE shall pre-qualify bidders by soliciting various details
including but not limited to the following providing pass/fail

thresholds, in accordance with the provisions of the Act and

rules 17(1) and 34 (Response time):

Contd..

Pre-qualification
Process(16)
PE may engage in
prequalification process
When: i. worth of contract
exceeds Rs. 45 M ii. work
irrespective of its worth is
complex.
(4) Qualified bidders
shall be issued the
tender documents.
bidders shall be pre-qualified
by soliciting various details
including but not limited to
the following providing
pass/fail thresholds,
(3) Bidding shall be limited
to pre-qualified firms.
Proof of:
 legal status
 registration with PEC
 enlistment with the
concerned
department;
 valid / renewed
relevant registration
 being a taxpayer
 organizational profile,
relevant experience,
past performance, list
of clients and
references
 technical personnel,
computing and
engineering
equipment, machinery
and plant
 last three years bank
statements and audited
reports
 managerial capability
Qualification Criteria
General
General Experience
Personnel Capabilities
Equipment Capabilities
Financial Position
Joint Venture (JV)
Joint Venture must comply with the following
requirements:-
a) The lead partner shall meet not less than 40 % of all
qualifying criteria
ii)Each of the partners shall meet not less than 25 % of
all qualifying criteria
iii)The joint venture must collectively satisfy the criteria
EVALUATION CRITERIA
Applicants meeting the minimum requirements besides
other factors shall be considered for pre-qualification.
No compromise shall be made on minimum
requirements of 50% score in each category.
Evaluating the best evaluated bid
(Goods/Works/Services)
(c) “best evaluated bid” means,-

(i) in case for procurement of goods and services, the highest

ranking fair bid in accordance with the evaluation criteria set forth
in the bid solicitation documents;

(ii) in case of procurement of works, the lowest responsive

evaluated bid will be the ‘best evaluated bid’

;
 35

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

Rule 17: Open tendering post-qualification of contractors

contracts costing between Rs. 2.5 million to Rs. 45 million,
based on evaluation of technical and financial worth
Bidding documents shall be made available to all interested
bidders
If lowest evaluated responsive bidder is not found to be qualified,
its bid shall be rejected
Credentials of next lowest evaluated responsive bidders shall
then be checked against all of the post-qualification criteria, and
contract shall be awarded to lowest evaluated responsive
qualified bidder
 36

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

Rule 18: Alternate methods for procurement of works, and non-

consulting services
PE may use following alternative methods for procurement:

petty purchases : procurement upto Rs. 50,000/- may be

undertaken by obtaining single quotation through direct
sourcing.

request for quotations: procurement from Rs. 50,000/- upto

Rs. 100,000/- shall be procured.

Contd..
 37

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

Direct contracting: PE shall only engage in alternate method if

following conditions exist:
- where civil works are to be contracted and are natural extension
of earlier or ongoing job and it can be ascertained that
engagement of same contractor will be more economical and
will ensure compatibility of results in terms of quality of works
subject to limitation of repeat or variation order
- procurement through government organizations, in accordance
with provisions of rule-3(2)(c)
- change of contractor or supplier would oblige PE to acquire
material having different technical specifications or
characteristics and would result in incompatibility or
disproportionate technical difficulties in operation and
maintenance, this shall be done with proper justification andContd..
 38

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

- emergency as defined in these rules and procurement specified

under sub-rule 3(2)(a) and 3(2)(b), provided PE shall specify
appropriate forum vested with necessary authority to declare an
emergency
- subject to conditions of contract, PE may, insure variation
order to contractor to include works which were outside original
scope of works to ensure interests of Government and for
reasons of economy, compatibility and efficiency provided that:
~ original contract is still in force
~ PE has satisfied itself for technical reasons that the placing of
variation order is cost effective
~ value of variation order is not more than 15% of original
contract
~ there may be more than one variation orders as long as total
 39

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

Rule 19: Method of advertisement

If cost of object to be procured is more than Rs. 100,000/- and
upto Rs. 2.5 million, (PE’s Website or Authority Website or Both)

For all procurement, other than those being covered by rule 10,
shall be advertised in print media, appearing in at least one
national English and one Urdu newspaper with nationwide
circulation along with advertising same either on PE or Authority
website or both

PE utilizing electronic media shall ensure that information posted

on website is complete, and shall remain available on that website
until closing date for submission of bids
 40

Salient Features of Khyber Pakhtunkhwa Public Procurement of Goods, Works

and Services Rules, 2014

Rule 20: Bid security

PE may require bidders to furnish bid security of two per cent
bid security shall be kept sealed in financial proposal. In case of
single stage two envelopes, bidder shall also place affidavit in
technical proposal stating that bid security amounting to 2 %,
without indicating the amount, has been placed in the financial
proposal or bid. Otherwise technical proposal will be considered
non-responsive and returned to bidder after being examined by
procurement committee
bid security will be returned to unsuccessful bidders after signing
of the contract with the successful bidder
bid security of successful bidder will be retained if no
performance guarantee is required, however, such condition shall
be mentioned in bidding document. In case performance
 41

Salient Features of Khyber Pakhtunkhwa Public Procurement of

Goods, Works and Services Rules, 2014

Rule 21: Performance guarantee

PE may ask for performance guarantee from

contractor, which shall not exceed 10 % of bid value, as
would be specified in standard bid solicitation
documents or standard bidding document
 CHAPTER V
MISCELLANEOUS PROVISIONS
 RULE 32:
 Each PE shall constitue a committee in accordance of
delagation of powers having representatives each
from ACCOUNTS or FINANCE or PLANNING
SECTION of PE apart from others.
 A TECHNICAL MEMBER----from relevant Line
Deptt of Govt or hired
RULE 33:
BID SOLICITATION DOCUMENTS
 Consistent with the provisions of ACT and Rule 34
(Responce time).
 In case of Works, BSD contains:
i. Drawings and Designs
ii. Technical Specifications.
iii. BOQ
iv. Evaluation Criteria
v. Expected commencement of contract and completion
time period
vi. Bid validity
vii. Securities
viii. General and special conditions of contract
 Rule 33....Contd
 BSD shall be made available to the bidders from
date of issuance to the closing date.....

 PE may keep a time period ending earlier than the

closing date of tender or bid..... (subject to Rule 34)

 In case of Modification in Solicitation Document

(Section 23(9) of the ACT)......Intimate the bidders
publicly or individually....in case it has issued the
BSD 5 days before the closing date.
RULE 34:
RESPONCE TIME
 Shall NOT be less than 15 days for NCB (National

Competitive Bidding) and 30 days for ICB (International

Competitive Bidding) from the date of publication of

advertisement or notice in the national Newspaper.

 RT is calculated from the date of First publication of the

advertisement in Newspaper or website.

RULE 35:
BID VALIDITY:
 Sufficient Bid Validity time.
 Extension in Bid Validity Time
 Bidders, not agreeing with Extension time, may do so
without having its BID SECURITY forfeited.
 Bid Security is forfeited if:
A) A Bidder withdraws his bid within the bid validity
period
B) In case of a successful bid, who repudiated the
contract or fails to furnish performance security.
RULE 36:
PRE-QUALIFICATION PROCESS:
 Submission of bids and bid opening. Rule 37-

2. Bidders to submit 3. PE shall issue

1. Procuring officer of
sealed written bids as receipt with date and
PE shall invite bids..
prescribed in the SD . time .

6. Last date for bid 5. Method (procedure) 4. Bids received after

submission as well as
the public opening
shall be the same
7. Bids (T/F) shall be
opened in the presence of
the PC & bidders
10. PE may ask for clarification of the bid,
may hold a pre-bid conference Pre Bid
meeting (At least 5 working days before
the submission of bids)
for submission of bids the prescribed time
shall be as per KP-PP and date shall not be
Rules 2014 entertained.
accordance
8. Bidder’s name modifications, discounts or
withdrawals, presence of bid security and the total
amount of each bid, shall be read out aloud and
recorded, copy can be handed over on request to :
9. No bidder shall be allowed to withdraw
his bid till award of the contract or till bid
is valid, whichever is earlier.
RULE 38:
BID EVALUATION:
 Bid evaluated as per the evaluation criteria and
conditions set forth in bidding document.

 Comparison of Bids quoted in different

currencies.....Exchange rate shall be the
prevailing selling rate 7 days before the date of
opening of bids.
RULE 41:
OPEN TENDERING WITH INTERNATIONAL
COMPETITION
(A) English Language
(B) Newspaper+ Website+ Embassies+ Trade
Representative of Potential Supplier.
(C) Response Time (at least 30 days----Rule 34)
(D) Technical Specification based on International
Standard.
(E) Bids/Performance Security acceptable in home
currency.
(F) SBD shall be used for International Competitive
Bidding (ICB).
 RULE 42:
POST BID NEGOTIATIONS
 PE may negotiate with highest ranked bidder but
negotiations shall not seek changes in the rates
quoted by the bidder.
RULE 43:
DISQUALIFICATION OF
SUPPLIERS,CONTRACTORS AND CONSULTANTS

 If information provided is incorrect.

 Bidder has the right to appeal in accordance with
Section 35 of the Act and grievances redressal
mechanism.
RULE 44:
BLACKLISTING OF SUPPLIERS,CONSULTANTS AND
CONTRACTORS
PE shall specify mechanism and manner to permanently or
temporarily bar, from participating in their respective
procurement proceedings, suppliers contractors and
consultants who either consistently fail to provide satisfactory
performances or are found to be indulging in corrupt or
fraudulent practices or abandon the work prematurely
resulting in loss to Government . Such barring action shall be
duly publicized and communicated to Authority, provided that
any contractor or consultant who is to be blacklisted shall be
accorded adequate opportunity of being heard in person
Bidder will have right to complain to administrative Secretary
of procuring entity or to file an appeal to the Authority in
accordance with section 35 of Act and regulations or guidelines
to be framed under it
Rule-45:
ANNOUNCEMENT OF EVALUATION REPORTS
PE shall announce results of technical bid evaluation
in form of report before opening of financial bids, to
all bidders. PE shall also announce final results of bid
evaluation giving justification for acceptance or
rejection of bids at least ten days prior to the award of
contract and place the same on its and Authority
websites.
Rule-46:
APPROVAL OF CONTRACT AWARD:
Procurement committee shall submit bid evaluation
report with its recommendations for award of
contract, to approving authority in accordance with
delegation of powers under the financial rules and
the power of re-appropriation rules 2001, in
expeditious manner, so that award can be notified
before expiry of bid validity period, without seeking
extension, in conformity with provisions of section 31
of Act and these rules
All contract awards shall be made public through
publication on Authority website
RULE 47: REJECTION OF BIDS:
PE may reject all bids or proposals at any time prior to acceptance of a bid
or proposal. PE shall upon request communicate to any contractor or
consultant who submitted bid or proposal, grounds for rejection of all bids
or proposals
PE shall incur no liability and Notice of rejection of all bids or proposals
shall be given promptly to all contractors or consultants that submitted bids
or proposals

RULE 48: REBIDDING:

If PE has rejected all bids under rule 47 it may call for a re- bidding
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
Rule-52: Record of procurement proceedings
PE shall maintain record of their respective
procurement proceedings along with all associated
documentation
Such maintenance of record shall be subject to
regulations framed in this regard from time to time
Rule-53: Public access and transparency
On award of contract , PE shall make all documents
related to evaluation of bid and award of contract,
provided where disclosure of any information is of
proprietary nature or where PE is convinced that such
disclosure shall be against public interest, it can
withhold only such information from public disclosure
subject to prior approval of administrative department
THANK YOU