The process is flawedProcurement process needs to be revamped.
The government recently has been criticised by different sections of society for trying to push through multiple bills in Parliament without holding consultations with stakeholders. Among the many, the few to have received prominent coverage have been the Guthi Bill, the Media Council Bill, and the amendments to the public procurement process. It comes with little surprise that the one that has received immediate attention from the government has been the procurement regulations. Within a span of a month, the government has backtracked on regulations barring contractors from participating in bids beyond their capacity—regulations that the government had been lauded for introducing.
The way the government has seen fit to change regulations to suit the vested interests of some contractors is wrong. However, there is a larger problem here. In passing the sixth amendment to the Public Procurement Act, only to reverse it with the seventh amendment within such a short time shows how reactive the government has been—it has not allowed for enough discourse and thought on passing regulations at all. Moreover, the government had an opportunity here to complete a much needed revamp of the entire procurement process. Instead, it has jumped from one amendment to the next, patching up one controversial move after another without getting at the real issue—the country’s public procurement process is flawed.
Public procurement processes are often times complicated. But regulations are also required so that the public can be confident that government contracts are awarded fairly, giving every qualified bidder an equal chance, and that such transactions are free from corruption. We have often criticised the government for failing to adhere to procurement guidelines, for example when the Oli-led government attempted to pass a law in December 2018 that would allow the government to directly pick developers for projects valued over Rs50 billion without adhering to the bidding process.
Currently, the process allows state agencies to open a bidding process, and then select a pool of lowest bidding entities. The lowest bids are then analysed to see whether the entities have the technical and financial capability to complete the project on time. The lowest bid that is adjudged to have the capability to follow through on its plans is then selected. Now, the process inherently supports the lowest bidders. But on projects such as heritage infrastructure rebuilds and complicated building projects, the difference between doing the job on time and doing the job well and on time are two very different things. Moreover, delays and poor construction have plagued almost every major development project in the past decade, recent prominent examples being Narayanghat-Mugling highway, the Tribhuvan International Airport expansion project and the Melamchi Water Supply Project. These projects were mired with corruption, delays and the inability of the chosen contractors to complete the projects on the initially approved budget.
The sixth amendment had aimed to solve some of these issues by not allowing deadline extensions of over half the time period of the original deadline and discouraging contractors from overstretching their capacity over multiple projects. While the seventh amendment reverses even these small gains, anything short of a complete overhaul of the regulations would not make much difference anyway. For instance, nothing would have stopped contractors from abandoning a project after missing the extended deadline. It is clear that the government needs to learn from international practices and hold stakeholder discussions to form a completely new set of procurement regulations. Once regulations are formulated the bill must be debated in various parliamentary committees—which are essentially the people’s watchdogs—before being considered for a vote in Parliament. This step, too, has often been ignored in the recent past.