Kathmandu, July 18: The government has introduced the second amendment to the Public Procurement Act, 2007 (2063 BS) with the objective of ensuring that infrastructure projects are completed on schedule and to the required quality standards. Construction contractors have welcomed the amendment, describing it as a historic reform for Nepal’s infrastructure development sector.
According to contractors, the amendment will put an end to the long-standing practice of excessively low bidding, commonly known as low bidding. They argue that the new provisions will encourage fair and quality-based competition while reducing the tendency for projects to remain incomplete or delayed for years. The revised legal framework has generated optimism throughout the construction industry.
According to them, the amended law gives priority to an average bidding system. This is expected to eliminate the practice of securing contracts through unrealistically low bids.
Under the new provisions, bids that are more than 30 percent below the average bid price will no longer be considered during evaluation. As a result, contracts are expected to be awarded within a more competitive range of approximately 10 to 15 percent below the estimated cost.
Many contractors collapsed financially because of the race to win contracts by offering extremely low prices.
Unhealthy competition had encouraged contractors to submit unrealistically low bids simply to secure projects. The amendment introduces an average bid system. Since bids more than 30 percent below the average will not even be evaluated, competition will remain within a reasonable range.
They believe that, based on average bid calculations, winning bids will generally be only 5 to 15 percent below the estimated cost. This will benefit not only contractors but also the government.
Instead of winning contracts through excessive underbidding, if contractors can undertake projects at reasonable prices and complete them on time, the government will receive the quality outcomes it expects, construction contractors say.
People’s News Monitoring Service.
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