The SPRR 2021, however, is an interim measure

Thukten Zangpo 

The Ministry of Finance (MoF) has revised the Simplified Procurement Rules and Regulations (SPRR) 2020 to negate the adverse impacts of the Covid-19 pandemic and steer the economy on the track to recovery, as an interim measure effective from November 2 of this year.

It was found that the government’s procuring agencies were not able to derive an optimal balance of costs and benefits (value for money) with the SPRR 2020 while procuring goods, work, and services.

“Besides monetary value, reliability and accountability while carrying out procurement still remain a challenge and grave concern,” stated the MoF.

An official said that when there were lapses in procurement, it was unclear whether it was the project engineer, tender committee, tender evaluation committee, officials involved in the procurement process, contractors, or the suppliers that should be held accountable.

The revised rule is clear and blunt. The new provision states that the tender committee, tender evaluation committee, and other officials involved in the procurement should act with the highest standard of ethics and be fully responsible and directly accountable for all decisions taken.

It gives the authority to the tender committee for making any procurement decision. Unlike in the past, a higher-level tender committee will not vet or approve the committee’s decision.

A new provision in the new SPRR 2021 states that contracts have to be executed upon agreed milestones that must be specific, measurable, achievable, realistic, and timely for the procurement of work.

An official said that earlier whether the contractor works or not, there was no provision of early termination. With the new rule, the contracts have to set milestones in the work schedule of the work documents between procuring agency and contractor.

“The contractors have to submit their monthly work performance, and if the milestones are not achieved three times consecutively, the contract can be terminated,” he said.

A procuring agency can also terminate a contract if the contractor fails to mobilise resources and commence physical activities within 45 days from the date of issuance of letter to start or proceed.

The new rule also allows procuring agencies to re-schedule a one-time extension for all ongoing projects because of the pandemic.

However, the contract work awarded after November 2 must be as per the contract document because the tender work duration will be calculated considering the pandemic situation, an official said.

Procuring agencies must establish goods receiving committees led by a procurement officer or a relevant technical officer while procuring goods and non-consultancy services to carry out the full inspection and conformity check during receipt of the goods.

For the verification of payment and bills, the new rules ensure the procuring agency verifies and makes payment within 25 days (15 days for engineers to verify the claims and 10 days for accounting personnel to process and effect the final payment) after the submission of correct bills or invoices, or a request for payment by the contractor.

However, if engineers do not verify bills in 15 days, or payment not made by accounting personnel within 10 days, the official concerned in the delay of payment will be held accountable.

Another change is mandatory pre-bid meetings for discussions and ambiguity for procurement of works above Nu 50 million (M), procurement of goods above Nu 10M, and procurement of services above Nu 5M. “Previously, it was optional,” an official said.

The SPRR 2021 also gives the authority to the procuring agency to re-tender or execute work departmentally, or directly award or procure goods upon termination of the contract.

Regarding disputes, the procuring agencies have to clearly spell out in the contract documents whether they will be resolved through arbitration or in court.

If contractors breach contract terms and conditions or do not fulfil contractual obligations, the procuring agency will report them to the Construction Development Board for imposing a relevant administrative sanction, as per the ethical code of conduct for contractors or any other relevant legal instruments.

This is expected to prevent a default contractor from getting work.

An official said that the SPRR 2021 will be incorporated in the Procurement Rules and Regulations 2019 if it works well.

He added that the ministry is also planning a framework for accountability, tender committee rules and responsibilities, and project engineer roles and responsibilities.