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PPRA Rules
PPRA Rules Notification
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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;

*****(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

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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;

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(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;

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(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);

*******i (a) "Procurement Assignment" means assignment of the procurement functions of

procuring agency to any public sector entity to perform such procuring functions on behalf of
the Procuring Agency for acquisition of Goods, Works, Services and/or disposal of public
assets.

(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.-

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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.-

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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

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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.
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(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,-

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(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.

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
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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.

*16A. Procurement of common use items, services and commodities through framework
agreements.-

(1) The Procuring Agency shall arrange the procurement through framework agreements
of recurrent or common use items, services including maintenance services and those
commodities, whose market prices fluctuate during the term of the agreement, for a maximum
period of three years.

(2) The procuring agency shall prepare provisional annual estimates including description,
specifications, statement of requirements and quantities, based on rational demand estimates.

(3) Based on such estimate, procuring agency shall initiate the prequalification proceedings
for selection of suppliers and service providers.

(4) Open and closed framework agreements may be made with the selected suppliers and
service providers. Maximum duration of open framework agreements shall not be more than
three years and the closed framework agreements shall not exceed one year.

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(5) The procuring agency may on need basis pre-qualify new suppliers or service providers
during continuity of framework agreements with previously pre-qualified suppliers or service
providers.

(6) The Authority shall make regulations, regulatory guides, guidelines or templates for
procurement through framework agreements.

*16B. Price adjustment for framework agreements.-

(1) The procuring agency may, during the contract execution, accept a request to make
price adjustment (under circumstance of above normal price volatility) and shall make a
comparison of the prices requested against the national or international price indicator guides
adopted by the Authority and verify the justification for such price adjustment.

(2) The procuring agency shall determine the factor or percentage for price adjustment
approved by the Principal Accounting Officer (PAO).

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 therefore 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.-

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*****(1) The procuring agency shall devise a comprehensive mechanism for blacklisting and
debarment of bidders for a specified time in accordance with regulations made by the
Authority, and the bidder or the bidders shall be declared as-

(a) blacklisted and henceforth cross debarred for participation in any public procurement or
disposal proceedings for the period of not more than ten years, if corrupt and fraudulent
practice as defined in these rules is established against the bidder or the bidders in
pursuance of blacklisting proceedings;

(b) blacklisted and henceforth cross debarred for participation in respective category of
public procurement or disposal proceedings for a period of not more than three years, if
the bidder fails to perform his contractual obligations during the execution of contract or
breaches the contract due to his capacity and capability to perform or otherwise.
However, procuring agency shall initiate such blacklisting or debarment proceedings
after exhausting the forum of arbitration, provided that such provision exists in the
conditions of contract, and if such failure or breach is covered in the respective dispute
settlement clauses of the contract, and

(c) blacklisted and henceforth cross debarred for participation in respective category of
public procurement or disposal proceedings for a period of not more than six months, if
the bidder fails to abide with a bid securing declaration, however without being
indulged in any corrupt and fraudulent practice.

(2) Such blacklisting or barring action shall be communicated by the procuring agency to the
Authority and respective bidder or bidders in the form of decision containing the grounds for
such action. The same shall be publicized by the Authority after examining the record whether
the procedure defined in blacklisting and debarment mechanism has been adhered to by the
procuring agency.

(3) The bidder may file the review petition before the Authority within thirty days of
communication of such blacklisting or barring action after depositing the prescribed fee and in
accordance with procedure issued by the Authority, and the Authority shall evaluate the case
and decide within ninety days of filing of review petition. The decision of the Authority shall
be considered as final.

(4) A bidder who has been declared blacklisted or debarred by a foreign country,
international organization or other foreign institutions shall be treated as blacklisted and
debarred from participating in any public procurement proceedings or entering into any public
contract for such period as declared by that foreign country, international organizations or
other foreign institutions:

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Provided that in case of public sector entities, the Board shall have the power to review and
examine the case on the basis of evaluations made by the Authority, and decide the case
accordingly.

(5) Notwithstanding anything contained in this rule, the blacklisted or debarred bidder
shall be bound to perform its contractual obligations in such on-going public contract or
contracts in which such bidder is already engaged. This shall however be at the option of
respective procuring agency.]

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.

****** 21( A). Mechanism for import of commodities to meet the demand-supply gap.-

(1) Notwithstanding anything contrary to these rules, the procuring agency shall use the provisions defined in
these rules, for procurement of such commodities referred in the Schedule-I due to their urgent need to be
placed in the market as a public good to meet the demand-supply gap.

(2) The minimum response time after the publication of the advertisement shall be in accordance with the
Schedule-I to these rules.

(3) The advertisement shall be published in at least two widely circulated daily
newspapers or journals and international websites including the websites of the
Authority and the procuring agency itself.

(4) The single-stage two envelop bidding procedure shall be adopted for the subject
procurement.

(5) The bidding documents shall clearly define the specifications, quantities, quality
parameters, evaluation criteria and allied national or international standards of the
desired commodities in addition to the specimen contract.
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(6) The bidding documents shall be uploaded on procuring agency's and the Authority's
website and shall contain the tentative dates for issuance of final evaluation report and
signing of contract.

(7) The evaluation report shall be communicated to all the bidders electronically
immediately after its issuance in addition to hoisting the same on the procuring
agency’s as well as the Authority’s website.

If it is mentioned in the bid date sheet that the bidders may offer less quantity as required to
meet the demand, the procuring agency may award the remaining quantity to the next most
advantageous bidder and so on until the desired quantities advertised by the procuring agency
are met with and if they agree to bring the price at par with the most advantageous bidder or
otherwise.

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;

form of contract;

(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;

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(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 ****procurement
or disposal proceedings without regard to nationality, except in cases in which ****a 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) The procuring agency shall, while evaluating and comparing bids, allow for preference
to domestic suppliers or contractors, while competing with the international bidders in
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accordance with the policies of Federal Government or regulations made by the Authority for-

(i) works projects;

(ii) certain goods manufactured, mined, extracted and grown in the Islamic Republic of
Pakistan; and

(iii) disposal of certain assets having any potential impact on national security;

(3) The percentage of 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 fixed amount of bid security not
exceeding five percent of the estimated value of procurement determined by the procuring
agency:

Provided that in case where the procuring agency does not require the bid security, the bidder
shall submit bid securing declaration on the format prescribed by the Authority in Standard
Procurement Documents.

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;

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(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.-

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(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.

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(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.-

****Based on the procedure adopted for the respective procurement, the procuring agency shall
announce the result of bid evaluation, in the form of final evaluation report giving justification
for acceptance or rejection of bids at least fifteen days prior to the award of procurement
contract:

Provided that in case where technical proposal is to be evaluated separately, prior to opening
of financial proposal, the technical evaluation report shall be announced before opening of the
financial proposal.

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.-

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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 ****most advantageous bid shall be accepted.

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(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;

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(vii) the revised technical proposal and the financial proposal shall be opened *****on
respective specified, 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 ****most advantageous 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;

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(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 and original financial proposal along with
supplementary financial proposal shall be opened on respective specified time, date 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 ****most advantageous 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
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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

****37(A).Unsolicited Proposal.

(1) An unsolicited proposal received by the procuring agency from any individual or
agency, private or public, consistent with the mission of the procuring agency, shall be assessed
by the assessment committee, consisting of at least three technical experts, to be notified by the
procuring agency. The assessment committee shall ascertain the viability of the proposal. If the
proposal is found viable, the procuring agency shall-

(a) advertise the proposal for open competition without disclosing the name of the initiator
of unsolicited proposal;

(b) conduct prequalification process;

(c) exempt the initiator of the unsolicited proposal from the prequalification; and

(d) award five percent additional weightage to the project proponent in the combined
evaluation of his proposal.

(2) If no other bidder in response to the advertisement submits bid, the procuring agency
may award the contract to the initiator of the proposal.

(3) In case of bidding competition, if the bid of initiator does not emerge as most
advantageous bid, procuring agency shall give the initiator an opportunity to make his bid at
par with the most advantageous bid, however if the initiator does not want to accept the
challenge to match the proposal, he shall be given right of refusal without forfeiture of bid
security.

(4) The proprietary information of the initiator contained in the proposal shall remain
confidential and shall not be disclosed to any interested bidder.

(5) Subject to sub-rule (4), the procuring agency shall not be responsible for any intellectual
property rights accruing to the proposal of the initiator.

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(6) Unless otherwise expressly stated in writing by the initiator, the procuring agency may,
if it considers necessary, disclose any information of the unsolicited proposal or the bidders as
part of procurement process.

ACCEPTANCE OF BIDS AND AWARD OF PROCUREMENT CONTRACTS

38. Acceptance of bids.-

The bidder with the ****most advantageous 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.

**** 38A. Bid Discount. - shall be omitted;

**** 38B. Single responsive bid in goods, works and services.-

(1) The procuring agency shall consider single bid in goods, works and services if it-

(a) meets the evaluation criteria, ensures compliance of specifications and other terms &
conditions expressed in advertisement or bid solicitation documents;

(b) is not in conflict with any provision of the Ordinance;

(c) conforms to the technical specifications;

(d) has financial conformance in terms of rate reasonability:

Provided that except unsolicited proposal, in case of pre-qualification proceedings single bid
shall not be entertained.

(2) The procuring agency shall make a decision with due diligence and in compliance with
general principles of procurement like economy, efficiency and value for money.

39. Performance guarantee.-

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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.

****39A. Letter of credit.-

Where required the procuring agency may incorporate the provision of letter of credit (LC) and
International Chamber of Commerce incoterms, in such processes where shipments and
custom clearance are involved and where procuring agency’s bank mitigate procurement
risk in terms of quality assurance and delivery mechanism and bidder’s bank in terms of its
payments.

****40. Limitation on negotiations.-

(1) Without changing the cost and scope of work or services, the procuring agency may
negotiate with the successful bidder (with a view to streamline the work or task execution, at
the time of contract finalization) on methodology, work plan, staffing and special conditions of
the contract.

(2) Authority may determine the extent and types of negotiations on procurement by
regulations.

41. Confidentiality.-

*****[ The procuring agency shall keep all information regarding the technical or final
evaluation confidential, as the case may be, until the time of the announcement of the
respective evaluation reports 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.-

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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:

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:

Provided that the same are not available from alternative sources;

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(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,-

(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;

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(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.

*****(e) force account.-

A Procuring agency, may use force account if the value of procurement does not exceed two
hundred million Pakistani Rupees, subject to the following conditions, namely:-

(i) the required works are small, scattered or remotely located for which qualified
construction firms are unlikely to bid at reasonable prices;

(ii) work is required to be carried out without disrupting ongoing operations;

(iii) urgent repairs, rehabilitation and remodeling works of national heritage requiring
prompt attention to prevent further damages;]

(iv) where unavoidable risk is better borne by the state owned entity than that of
contractor;

(v) there are extreme urgencies which require prompt attention, or

(vi) the project is of sensitive nature and its information cannot be shared with private
sector:

Provided that state owned entity engaged for the procurement shall accomplish the task
exclusively through its own resources without involving private sector as a partner or in the
form of a joint venture or as a sub-contractor:

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Provided further that, where there are more than one eligible state owned entities having such
resources to perform that particular assignment, limited competition shall be held amongst
them through soliciting the proposals following any mode of enquiry providing reasonable
response time without requirement of publication of open advertisement†;

(f) Direct Contracting with State Owned Entities.-

A procuring agency may engage in direct contracting with state owned entities such as
professional, autonomous or semi-autonomous organizations or bodies of the Federal or
Provincial Governments for the procurement of such works and services, including
consultancy services, which are time sensitive and in the public interest, subject to the
following conditions, namely:-

(i) the organization or the body to be engaged in direct contracting shall be eligible to
perform the works or render the services;
(ii) the organization or the body shall accomplish the work or the services including consultancy services,
exclusively through its own resources without involving private sector as a partner or in the form of a joint
venture or as a sub-contractor;

(iii) in case there are more than one organizations or bodies eligible to perform the works or
render the services, the procuring agency shall hold competition amongst them through
limited tendering (notifications) without any advertisements, however, giving
reasonable time for submission of their applications or proposals;

(iv) the procuring agency shall devise a mechanism for determining price reasonability to
ensure that the prices offered by the state owned entities are reasonable for award of the
contract.

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

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(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.

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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, and the same shall be
addressed by the grievance redressal committee
(GRC) well before the proposal submission deadline.

(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.

(4) In case, the complaint is filed against the technical evaluation report, the GRC shall
suspend the procurement proceedings.

(5) In case, the complaint is filed after the issuance of the final evaluation report, the
complainant cannot raise any objection on technical evaluation of the report:

Provided that the complainant may raise the objection on any part of the final evaluation report
in case where single stage single envelope bidding procedure is adopted.]

(6) The GRC shall investigate and decide upon the complaint within ten days of its receipt.

(7) Any bidder or party not satisfied with the decision of the GRC, may file an appeal before
the Authority within thirty days of communication of the decision subject to depositing the
prescribed fee and in accordance with the procedure issued by the Authority. The decision of
the Authority shall be considered as final.

49. Arbitration.-

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

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(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.

****52. Shall be omitted;

*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
******* Inserted vide S.R.O. No. 21(I)/2025 dated 14th January, 2025

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