The Public Procurement Monitoring Office (PPMO) has asked government offices not to demand documents from bidders more than required by the rules. The PPMO made the request after stakeholders complained that offices were demanding documents unrelated to the bidding process.

Issuing a notice on September 6, the PPMO said the request was made on the same date through a secretary-level decision. It said the demand for more and unnecessary documents was discouraging bidders and stifling competition.

According to the notice, the PPMO has received complaints that some government offices have been ignoring the public procurement regulations and refusing to recognise the work experience gained by foreign bidders in their own countries, giving recognition to only a portion of past work experience, ignoring the bidder criteria set by the PPMO itself, and demanding irrelevant documents. It has asked the offices concerned not to do anything by going beyond the rules, and limit competition.

Various bidders have alleged that the Provincial Infrastructure Development Authority of Lumbini Province in particular has continued to subject bidders to provisions to prevent more bidders from applying for a contract for the construction of a building for the Lumbini Provincial Hospital.

After allegations that the Provincial Infrastructure Development Authority tweaked bidding requirements to favour certain domestic contractors, the authority was forced to scrap its tender notice first issued on February 20. Although the authority issued a new tender notice in June, it is again facing similar accusations.

Balibhadra Rana, provincial president of the Federation of Contractors’ Association of Nepal (FCAN), filed a writ petition at the High Court, Dang, alleging corruption in the tender process.

On August 10, the high court issued an interim order halting the contractor selection process.

On September 6, the court continued its stay order arguing that the bidding criteria was amended time and again to favour certain contractors.

“Particularly, we are concerned over a new requirement in the bidding form that any foreign joint venture partners participating in the bid should have worked in at least two foreign countries other than their home countries,” Rana said. “This provision will prevent many foreign contractors from participating in the bidding process.”

According to Rana, the new bid document has reduced the financial criteria for lead joint venture partners as they can now place bids if they have completed works worth just Rs1.8 billion. “It is an attempt to keep certain Nepali contractors as lead partners by lowering the financial criteria,” he added.

As per the PPMO notice, it is against the existing rules and laws to demand from foreign bidders work experience in countries other than native ones.

“Not only in the case of the Lumbini Provincial Hospital, we have received complaints in bids for other projects too,” said Krishna Raj Panta, PPMO director. “We have written to the Provincial Infrastructure Development Authority of Lumbini Province to amend the provisions that contradict the rules and limit competition.”

Chhabiraj Pokhrel, the chief executive officer of the authority, however, defended the provisions in the bid form arguing that the authority followed the practice adopted by other state agencies including the road offices and the Nepal Electricity Authority.

“When we talk about international experience of contractors, it should be their experience gained in third countries other than the home country and this is not inappropriate,” said Pokharel. “It is not a new practice because in Nepal also various other government agencies want contractors with similar foreign experiences.”

He, however, said that his office will abide by the PPMO notice. “As there is a case sub judice, we cannot immediately implement the recommendations of the PPMO,” he added.

The Provincial Infrastructure Development Authority of Lumbini Province was forced to scrap the tender it had issued on February 20 for the construction of the hospital after an intervention by the PPMO. The bid was scrapped on April 1.

The procurement monitoring office pointed out that the specifications in the first tender indicated a collusion between officials and certain contractors. Owing to the allegedly bespoke criteria, only two firms participated in the bid—one from a joint venture involving Sharma and Company, and another from Rasuwa Construction, which is owned by Mohan Acharya, a Nepali Congress leader.

The first tender, issued in February, had restricted contractors without experience in building hospitals from submitted bids. But foreign contractors could participate in the bid in partnership with Nepali contractors.

As per the tender notice, the lead partner must have completed at least one government hospital building contract having a double basement of plinth area not less than 6000 square metres within the last ten years, with a value of at least Rs3,750,000,000.

In case of a bid involving a foreign lead partner, the junior joint venture partner (a Nepali firm) also must have completed at least one government hospital building contract with a double basement of plinth area not less than 2000 sq metres in the last ten years with a value of Rs1,750,000,000, the tender notice read.

In case where the bidder is only Nepali contractor, such company should have constructed at least two hospital buildings (at least a single government hospital building with a double basement of 6,000 square metres) within the last ten years, with a total aggregate value of Rs3,750,000,000 (excluding VAT), the tender notice read.

According to Pokhrel, the chief executive officer, the hospital in Lumbini to be built within five years at the cost of Rs6.37 billion will have around 400 beds with a block for treatment of cancer patients and a research unit.