Parliamentary study team submits report

KATHMANDU, Sept 17:

A sub-committee of the parliamentary Finance Committee formed to study shortcomings in the Public Procurement Act has submitted its report.

CP Mainali, coordinator of the sub-committee, handed over the report to Finance Committee Chairman Prakash Jwala on Wednesday.
The Finance Committee formed the sub-committee as part of its plan to give necessary suggestions for the amendment to the Public Procurement Act 2007.

The Mainali-led panel has given nearly three dozen suggestions to the committee.

Among others, the sub-committee saw problems in long bidding process, cost estimation procedure and performance guarantee provision. It has recommended lowering the bid submission time to 21 days to ensure early implementation of development projects. “The existing three-month bid submission period has creating problem in timely implementation of development works,” the report states. The sub-committee also concluded that the existing practice of awarding contract to the lowest bidder was affecting quality of work.

The sub-committee has recommended conducting procurement audit and performance base audit of development projects.

It has also suggested to the government to incorporate a provision on defect liability period. “The existing provision protects contractors as it does not have provisions related to defect liability period,” the report states.

The report also states that reputed contractors are submitting bids in the name of pseudo firms to take benefit from the existing system of awarding contracts to the lowest bidders.

To do away with the problem, the sub-committee has recommended forming a roster of contractors based on their work performance.

Regarding the misuse of mobilization fund, the report has recommended incorporating a mandatory provision of termination of contract if the contractor failed to start work in time. Members of the sub-committee hope that the provision would check the tendency of contractors fleeing after receiving advance payment as mobilization fee.

The sub-committee has also recommended to the government to put in place strong monitoring provision to screen such unscrupulous bidders. It has also proposed to study the past performance of bidders before awarding them new contracts.

Similarly, the sub-committee has recommended introducing a provision to put 15 percent of the total estimated cost as guarantee amount and another five percent as performance guarantee.

The government is in the process of making amendment to the Public Procurement Act 2007 as announced through the budget for fiscal year 2014/15.

Kamala Pant, Gopal Dahit, Janardan Dhakal, Bikram Pandey, Uday Shumsher Rana, Rewati Raman Bhandari, Ratna Sershan, Shakti Bahadur Basnet, Jagadishwor Nar Singh KC and Sher Bahadur Tamang were the other members in the committee.

Source: Republica