Government Amends Public Procurement Regulations for Extension of Contracts

Kathmandu. The government has opened the way for extending the deadline for construction and procurement contracts that have been stalled for various reasons or could not be completed on time by making the fifteenth amendment to the Public Procurement Regulations, 2064.

The Office of the Prime Minister and Council of Ministers issued the 'Public Procurement (Fifteenth Amendment) Regulations, 2083' by publishing a notice in the Nepal Gazette on Asar 30, 2083. These regulations came into immediate effect upon publication in the Gazette.

A special provision regarding the extension of the deadline has been added as '120a' in Rule 120 of the newly amended regulations. According to this, the deadline for projects that have expired or could not be extended but have at least 50 percent physical progress will be extended. Similarly, this rule will also apply to procurement contracts made in the fiscal year 2082/83.

For the extension of the deadline, the construction entrepreneur, supplier, or service provider must submit an application to the concerned body within 30 days of the commencement of this rule, along with the reason for the inability to complete the work, justification, and a new work schedule.

However, to receive the extension, the main reasons must be that the implementation of the procurement contract was stayed by the government or the Council of Ministers, budget allocation was missed in the annual budget and program, payment could not be made on time due to insufficient budget, and the work was halted due to other reasons of compensation events mentioned in the terms of the procurement contract.

Furthermore, the regulations clarify that by extending the deadline in this manner, the construction entrepreneur or supplier will not be able to claim any additional financial compensation. They must provide a commitment to this effect in their application. Additionally, the government will not collect any pre-determined compensation for such extended periods.

To make the deadline extension transparent and swift, a time limit has also been set for employees. The chief of the public entity must make a decision on the deadline extension within 30 days of receiving the application. If a decision is not made within that time, such officials or employees will face departmental action according to the prevailing laws, as mentioned in the Gazette.

Similarly, if the contractor does not submit an application for deadline extension within 30 days of this rule coming into effect, or if the work is not completed within the extended period, the contract will be terminated. If the contract is terminated, the performance bond will be forfeited, and a letter will be sent to blacklist such construction entrepreneurs or suppliers.