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1 Overall Duration hour 5 mins Total Number of Slides 36 Plan for Practical No. Exercises Duration 8 minutes Timing within Presentation Slides 33, 34, and 35 relate to the practical exercise Reference Material Extracts from PPA and PPR Reference Clause 3.4 Tender Notice for Practical Exercise. Title Slide (3B) Public Procurement Act and Rules Presentation for LRN Training Presenter s Name Date of Presentation. Module Contents Overview of Public Procurement Act (PPA) & Public Procurement Rules (PPR) Bid Invitations Procurement Methods Contract Types Case Studies Presenter introduces themselves and the module Public Procurement Act and Rules Overview of the module contents as per the list on the slide 3. Overview of PPA, PPR Start of new section (sub-title slide) Introduce new section Overview of PPA, PPR 4. Introduction to Public Procurement Act (PPA) Ensures procedures, processes, and decisions relating to public procurement are open, transparent, objective, and reliable Ensures maximum return on expenditures by promoting competition, fairness, honesty, accountability, and reliability Key principles of PPA are Transparency, Fairness, Value for Money, Competition, Professionalism, Ethical, Accountability Principles are in place to ensure effective use of public funds Page of 0

2 5. Introduction to Public Procurement Act (PPA) 6. Introduction to Public Procurement Rules (PPR) 7. Public Procurement Monitoring Office (PPMO) 8. Public Procurement Monitoring Office (PPMO) Enhances managerial capacity for the procurement of works, goods, or services and ensuring equal opportunity and good governance House of Representatives enacted this Act in the first year of issuance, 063 First edition produced in 064, third amendment took place in 068 Developed under power conferred by Section 74 of the PPA Guides the implementation of the PPA Defines 53 rules for public procurement Refer to PPA 063 Section 64 & 65 Established in 064, reports directly to Prime Minister Responsible for: o Policy formation, o Policy implementation, and o Monitoring of Public Procurement Functions, duties, and powers include: o To simplify and facilitate procurement proceedings, o To maintain performance records relating to contract implementation in a central data bank, o To develop methods for disseminating information relating to public procurement, o To conduct study/research relating to procurement acts and rules of other countries, and o To conduct training programmes to build expertise on procurement. 9. PPA Definitions Procurement: The acquisition of any goods, consultancy services, or other services, as well as carrying out or causing to be carried out of any construction works, by a public entity pursuant to PPA Supports improved management of procurement Enacted in 063 / 007 PPR overview as per list on slide Provides rules for implementation of PPA st edition 064 / 007 Revised in 068 / 0 Background and Responsibility of PPMO as per list on slide Government agency with functions, duties, and powers as per list on slide Definition of Procurement as per slide Page of 0

3 0. PPA Definitions Procurement Contract: A contract between a Public Entity and a supplier, a construction entrepreneur or consultant, or service provider, for the provision of goods, services, or construction works, pursuant to Section 5 of the PPA. Procurement Contracts Refer to PPA 063 Section 5 () All procurement contracts, other than low value contracts, must include the following: o Scope of the procurement contract, o Work performance schedule, o Supply time, performance time or whether time can be extended or not, o Terms and conditions for acceptance of goods, construction work or services, o If price adjustment can be made, provision thereof. Procurement Contracts o If procurement contract can be amended and variation order can be issued, provision thereof, o Liquidated damages for failure of performance within the stipulated time, o Provision concerning bonus to be given if work is completed before the stipulated period, o Conditions in which procurement contract may be terminated, o Provision whether sub-contract can be included or not, o Mechanism for settlement of disputes 3. Invitations to Bid Refer to PPA 063 Section 4 (3) Invitations to Bid must include the following: o The name and address of the Public Entity inviting bid, o The nature of and time limit for procurement work and the place of delivery of the goods to be supplied, the services to be delivered and the construction work to be performed, Page 3 of 0 Definition of Procurement Contract as per slide Items to be included in procurement contracts (other than low value contracts) as per list on slide Items to be included in procurement contracts contd., as per list on slide Emphasise importance of Invitation of Bids which should provide all information related to a Bid in a clear and concise manner Contents of invitation to bid must be as per the list on the slide

4 o If bid security is required, the amount and validity period thereof (at least 30 days beyond bid validity period) 4. Bid Invitations o The place, manner of obtaining the bidding documents or prequalification documents, and the fees charged therefor, o The place, manner, the deadline for the submission or forwarding of the bidding documents or prequalification documents, o The place, date and time for the opening of bids, and matter that the bidders or their authorised agents shall be invited to attend the opening of bid o Shall indicate the cost estimate < 6M (PPR 49) o Shall include the multiple contract clause (PPMO bid doc >6M, Section III, Clause. 5. Issues with Tender Declaration letter often missing from tender notice but on Notice/Bid Document bid data sheet is part of eligibility criteria RAP3 strongly advises that the Invitation Notice includes the full list of compulsory enclosures for Eligibility (because many bids are non-compliant due to straight forward oversights) Required contents of invitation to bid contd., as per list on slide A common error with tender notices and bid documents is that the declaration letter is not mentioned in the tender notice but is part of the eligibility criteria on the bid data sheet Invitation notice must include full list of required data to meet eligibility criteria in order to avoid high number of bids being non-compliant due to straight forward oversights 6. Procurement Methods Start of new section (sub-title slide) Introduce new section Procurement Methods Page 4 of 0

5 7. Procurement Method Refer to PPA 063 Section 8 For procurement of goods, construction works or other services:. By inviting open bids at international level,. By inviting open bids at national level, 3. By inviting sealed quotations, 4. By procuring directly, 5. Through participation of users' committee or beneficiary group, 6. Through force account. 8. Procurement Method Procurement of consultancy service:. By requesting competitive proposals,. Through direct negotiations. Page 5 of 0 Depending upon the nature and type of bid, one of 6 different procurement methods can be used The procurement methods are listed in section 8 of the PPA List of methods as per slide. Normally for bids with high value, or technical specifications that it is not possible to meet nationally. Goods or services valuing above million Rupees, or construction work valuing above million Rupees 3. For goods or services valuing less than million Rupees, construction work valuing less than million Rupees 4. Low-value procurement 5. A labour based construction work or service related to a UC or beneficiary group with cost estimate up to NRs 6 M, provided that they shall not use heavy equipment and Contractor 6. A construction work, after breaking into pieces of not exceeding one hundred thousand Nepali Rupees, be caused to be carried out through negotiations or be awarded on wage by making available necessary construction materials Consultancy services may be procured through the two methods listed on the slide. Used for all cases other than those described in. If a service requires to be obtained for such matters as training, workshop and seminar in the case of a service valuing less than one hundred thousand Rupees

6 Generally, Districts do not procure consultancy services, and this is managed by TMO 9. International Bidding Tender notice in international media (45 days) Criteria are as follows (Ref PPA, Section 5 ): a) Where the goods / works are not available under competitive price from more than one firm in Nepal, b) Where no bid was submitted in response to bid invitation at national level for the procurement of goods /works / other services, c) Where under an agreement entered into with a donor party, foreign goods or construction works have to be procured from foreign source, d) Where the Public Entity has certified that the goods or construction works, being of complex and special nature, have to be procured through an international level bidding. 0. National Level Bid Refer to PPR 064 (third amendment, 068) Rule - 3 Tender notice must be placed in national level media for a minimum of month National level bid when a Public Entity has to procure goods or services valuing above million Rupees, or construction work valuing above million Rupees. Sealed Quotation Refer to PPR 064 (third amendment, 068) Rule -84 A notice must be placed in local level media for a minimum of 5 days Threshold: For goods or services valuing less than million Rupees, construction work valuing less than million Rupees Sealed quotation form must be prepared before inviting sealed quotations. Sealed Quotation A sealed quotation, once submitted, cannot be withdrawn or amended Page 6 of 0 Brief overview of international bidding Criteria are as per slide International bidding will rarely (if ever) be used during RAP3, and will definitely not be used at District level Overview of national level bidding as per slide Overview of sealed quotation as per slide Overview of sealed quotation contd., as per slide

7 Of the sealed quotations fulfilling the terms of the bid, the lowest value quotation must be approved 3. Direct Procurement Refer to PPR -85 Low-value procurement Criteria are as follows: a) For goods and services valuing less than 300,000 Rupees, and construction work valuing less than 500,000 Rupees b) If only one supplier, construction entrepreneur or consultant, or service provider has the technical efficiency or capacity to fulfil the procurement requirement c) If only one supplier has the exclusive right to supply the goods to be procured and no other appropriate alternative is available 4. Direct Procurement 5. Comparison of Procurement Types d) Procurement of additional goods or services of proprietary nature from an existing supplier, consultant, or service provider e) Procurement of necessary construction works, goods, consultancy services, or other services not included in the initial contract f) If the service of a particular consultant with unique qualifications is immediately needed for the concerned work or where the service of same consultant is indispensable In addition it is considered good practice and required by DFID rules to demonstrate value for money the best and most efficient way is to obtain at least 3 quotations Table Page 7 of 0 Overview of direct procurement as per slide Overview of direct procurement contd., as per slide DFID rules regarding value for money state that a minimum of 3 quotations must be obtained for direct procurement Table compares International Bid, national bid, sealed quotation, and direct procurement in terms of tender notice requirements and value thresholds

8 6. Qualification Criteria For Goods refer to PPR 064 (third amendment, 068), Rule -5 For works refer to PPR 064 (third amendment, 068), Rule -6 Construction work with a value greater than 6 million Rupees Bidders supplying goods must meet criteria to be eligible and supporting documentation must be supplied Those tendering for construction work must meet criteria as bidding/prequalification document such as: o General work experience, o Special work experience o Min. annual average turnover, o Economic & Financial Capacity (LoC) o Skilled manpower 7. Procurement Method o Table Equipment Qualification criteria shall be applied for public procurement with a value greater than 6M NRs Bidders shall present document showing their work experience, personal, equipment and financial capacity. Pre-qualification documentation is as per list on slide Table presents NCB and ICB procurement for different thresholds and for goods and works 8. Procurement Method Table Table presents sealed quotation procurement for goods and works Page 8 of 0

9 9. Procurement Method Table Table presents direct procurement for goods and works 30. Contract Types Start of new section (sub-title slide) Introduce new section Contract Types 3. Contract Types (Construction Work) Refer to PPR 064 (third amendment, 068), Schedule 4 Unit Rate Contract: Quantity of construction work not ascertained at conclusion of procurement contract (construction work at rates referred to BoQ) Lump Sum Contract: Construction work which is difficult to measure Cost-Reimbursement Contract: Construction work of high risky & unpredictable, and the construction entrepreneur cannot carry under the unit rate contract Time and Material Rate Contract: Construction work by computing the labour on the basis of time and materials on the basis of unit rate due to unpredictability nature of work such as maintenance 3. Contract Types Design and Build Contract: It can be concluded for design and construction work for a project to be carried out by the same firm Types of contracts that can be used for construction works List as per slide Types of contracts that can be used for construction works contd. List as per slide Page 9 of 0

10 Management Contract: Construction work to be carried out through multiple sub-contractors Performance Based Contract: Construction work without mentioning the equipment required (by mentioning only the final performance) Piece Work Contract: Construction work related to small scale maintenance and repair which needs to be carried out frequently, as and when required (shall not exceed one year) 33. Practical Start of new section (sub-title slide) Introduce new section Practical Exercise 34. Practical The tender notice (Invitation to Bid) has some incorrect data in it, please identify the incorrect data and explain how it should be corrected 35. No Heading (Tender Tender Notice Notice) Brief the participants on the practical exercise as per the slide The tender notice used for the exercise Tender notice is also included as reference material in the training folder 5 (5 to identify errors, 0 to discuss) 36. End End of Presentation 5 minutes are allowed for questions at the end of the module 5 Page 0 of 0