Govt unveils draft PPR 2025, removing local procurement price cap

Highlights:

• Bids evaluated using new weighted average formula
• Any bid falling below lower threshold will be considered disqualified
• Draft removes rigid ±10% local price cap
• PPR-2025: 94 amended, 12 new added, 25 repealed.

The government has unveiled the draft Public Procurement Rules 2025 (PPR-2025), introducing major updates to several sections of PPR-2008 to align with international standards and improve transparency.

The changes include removing the local procurement price cap and introducing a weighted bid evaluation system, updating the limited tender process, and adding a new clause on contract cancellation.

The Bangladesh Public Procurement Authority (BPPA) presented the draft in a workshop at the IMED conference room in Sher-e-Bangla Nagar, Dhaka, today (10 September).

At the event, organised by the Planning Ministry's Implementation Monitoring and Evaluation Division (IMED), BPPA Director Shah Eyamin-Ul Islam highlighted the proposed rules.

One of the key reforms under the draft PPR-2025 is the removal of the ±10% limit that previously applied to the government's official estimated price in local procurement. Earlier, for example, if the official estimate was Tk100, bids had to fall between Tk90 and Tk110; anything outside this range was rejected.

Now, bids will be evaluated using a weighted average formula, aligning with international practice. The formula considers three factors: the average price of acceptable bids (50%), the official estimate (20%), and recent market prices from the e-GP portal (30%). Any bid falling below the lower threshold will be considered abnormally low and disqualified.

This approach reflects real market conditions more fairly, replacing the rigid ±10% cap with a flexible, formula-based system used in many countries.

The PPR-2008 contained a total of 130 rules. In the draft PPR-2025, 94 rules have been amended, and 12 new rules have been added. Meanwhile, seven rules and 18 sub-rules have been repealed.

IMED Secretary Kamal Uddin attended the workshop as the chief guest, while BPPA CEO SM Moin Uddin Ahmed presided over the session.

The BPPA CEO explained the background, rationale, and necessity of the proposed PPR-2025. Other changes in the draft are as follows.

Temporary suspension and debarment

For the first time, the draft rules introduce changes to the processes for temporary suspension and debarment. When a person or entity is under consideration for disqualification, the relevant authority can immediately impose a temporary suspension.

This suspension must be resolved within 42 days. If no decision is made within the prescribed period, the suspension will automatically lapse. However, if an entity is debarred, it can appeal the decision. To handle such appeals, a Debarment Review Board comprising three expert members will be established.

New rules for domestic-foreign joint ventures (JV)

Currently, there is no provision to make domestic-foreign joint ventures (JV) mandatory in government procurement. The new rules introduce such a requirement in specific sectors.

The draft says, a JV will be mandatory only for IT services procurement when international bids are invited. In other sectors, there is no requirement to form JVs. This change is expected to encourage collaboration between local and international companies and create opportunities for knowledge and technology exchange.

Changes in the limited tender procedure

The draft rules also expand the scope of the limited tender procedure. Procurement of works up to Tk5 crore and goods or physical services up to Tk50 lakh can be done through limited tendering.

In these cases, tenders must be invited only from pre-registered suppliers, contractors, or service providers. However, for internal procurement, any bid that exceeds or falls below the official estimate by more than ±5% will be considered invalid.

New clause on contract cancellation

The draft rules also introduce changes to the contract cancellation process. Any contract cancellation must be approved by the head of the relevant office. If needed, a three-member review committee will be formed.

After the committee makes its recommendation, the office head will make the final decision. This process aims to ensure transparency and accountability in contract cancellations.