Remove 'unfair' clauses, ensure equal opportunity in public procurement: Speakers

As there is an adherence to award development project contracts to the lowest bidder as per the Public Procurement Act, there is no quality of work in those projects, according to stakeholders.

To address this issue, they proposed that amendments have to be made to the legislation, prioritising the selection of eligible institutions based on merit, rather than solely on the basis of cost.

The call came during a seminar titled "Public Procurement Act-Challenges and Opportunities," organised by the International Business Forum (IBFB) of Bangladesh.

Speakers at the seminar also demanded that the government remove discriminatory tax structure for the local companies to ensure a level playing field for all the domestic and foreign firms in the public procurement process.

Advisor to Bangladesh Association of Construction Industry (BACI) Engineer SM Khorshed Alam said, "[Development] work worth at least Tk100 crore is being won by just bidding Tk60 crore. How is it even possible to implement the work? The contractors are receiving contracts by quoting such unusual prices such as projects like the Dhaka-Sylhet and Sylhet-Tamabil four-lane roads."

Engineer Rabiul Alam, former President of the Manufacturer's Association for Transformer and Switchgear (MATS), expressed concerns regarding the challenges faced by domestic contractors. 

He said, "The existence of domestic contractors are under threat due to disparity in tax-VAT policies. Local contractors are subject to a 15% tax-VAT on development works while foreign contractors are exempt. Moreover, local contractors must bear a 35% import duty on raw materials, further hindering their ability to compete effectively in the market."

Speaking as the chief guest, State Minister for Planning Md Shahiduzzaman Sarker said, "Abnormal bids cannot be accepted. However, it is difficult to decide whether or not to award the work to the lowest contractor but the government is actively seeking solutions to address this issue."

Adviser to IBFB and former NBR Chairman Muammad Abdul Mazid said, "Our tax-GDP rate is not increasing due to the tax exemptions to foreign contractors. Moreover, there is no tender competition in the field. Our GDP is growing but taxes are not."

Although the Padma Bridge was constructed using government funds, the responsibility of toll collection was outsourced to a foreign company so our money is going abroad, he added.

As designated discussant, Bangladesh Public Procurement Authority (BPPA) Chief Executive Officer (CEO) Mohammed Shoheler Rahman Chowdhury highlighted the challenges associated with awarding contracts to the lowest bidder offering significantly lower prices than the estimate. 

He emphasised that such practices often lead to audit objections and scrutiny from NBR. However, Chowdhury noted that efforts are underway to amend the procurement law to address these legal complexities and streamline the process.

Speaking as designated discussants, Bangladesh Public Procurement Authority (BPPA) Chief Executive Officer (CEO) Mohammed Shoheler Rahman Chowdhury said, "There are many problems if the lowest bidder is awarded the work by offering a much lower price than the estimate." 

He emphasised that such practices often lead to audit objections and scrutiny from NBR. However, he noted that efforts are underway to amend the procurement law to address these legal complexities and streamline the process.

In the programme, former lead procurement specialist of the World Bank, Dr Zafrul Islam presented a keynote paper titled "Governance and Competitiveness in Public Procurement Practices: Bangladesh Context."

While presenting the paper, he said, "Government procurement has to spend extra money due to various reasons including corruption, delay in implementation of procurement work, wastage.

"At present the total procurement work in our country is 27 billion dollars. By saving 1% of this procurement work, it is possible to construct 2,200 km of roads."