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Analysis

Amendment In Public Procurement Rules: Demise Of Transparency?

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The Federal Government has recently amended Rule 42 of the Public Procurement Rules 2004 by inserting sub Rule (f) at the end with the heading “Direct Contracting with State Owned Entities”. The heading gives too much away through its wording leaving little room for ambiguity. The object and purpose – for which Public Procurement Regulatory Authority Ordinance 2002 (PPRA) and the 2004 Rules made thereunder were promulgated – is gradually being eroded at the altar of seemingly expediency relating to government contracts and projects.

Before looking into what the new amendment entails in public sector contracting, let us briefly look into the historical background of this particular legislation. The PPRA Ordinance was framed with a view to bringing transparency, fairness and openness in the proceedings relating to contracts of works and services awarded to companies for which an Authority was established to carry out the purposes of the Ordinance. Section 5(1) of the PPRA Ordinance is self explanatory in that respect:

    “5. Functions and powers of the Authority

(1) ……the Authority may take such measures and exercise powers as may be necessary for improving governance, management, transparency, accountability, and quality of public procurement of goods, services and works in the public sector.”

It would be fair to say that such legislation is always an essential part and parcel of a modern, rule bound state in the 21st century, not much different from a complex piece of machinery that requires expertise and skills to be operated optimally. Needless to say, good governance demands that the area relating to contracts of goods and services is governed through an elaborate and yet fair law with inbuilt safeguards and measures ensuring transparency and accountability without compromising on quality at the same time.

If one were to examine Rule 42, it will soon become clear that that same pertains to ‘Alternative methods of Procurement’ as is quite apparent from its description. The rationale of having such a rule is to create ease of business and expedite and streamline the procurement process in order for the works to be concluded in time while ensuring high standards it was procured for. For example, for the sake of brevity, in its original form Rule 42 deals with and does away with the requirements of tenders for petty purchases upto one lakh and purchases of minimum Rs 1 lakh but which do not exceed 5 lakhs etc. Rule 42(c) lays down the procedure and method for tackling situations in which direct contracting is allowed where, for instance, only one manufacturer or supplier exists for the required procurement, so and so forth.

It would be fair to call Rule 42 as a provision which allows and facilitates ease of business and suggests a pathway towards removing bureaucratic bottlenecks which tend to unnecessarily hamper and slow down public sector procurement of goods and services. The latest amendment in the form of the insertion of sub rule (f), however, violates the principle and rationale which forms the foundation of Rule 42 in particular, and Public Procurement Rules 2004 and PPRA Ordinance 2002 in general.

It may be argued that the said amendment goes beyond the inherent object and purpose of Rule 42. It creates an exclusivity for state owned entities at the exclusion of privately owned companies and contractors. It is worthwhile to mention here that to create a virtual monopoly for government owned entities like National Logistics Cell (NLC), Frontier Works Organization (FWO) and Nespak, for instance, is not only another U-turn by an administration whose biggest electoral slogan has been anti-corruption, transparency and accountability. It is also a backdoor for some companies to bag big contracts in the name of creating ease of business and removal of bureaucratic hurdles which might be open to successful future legal challenges.

Another factor that may have been the likely reason for bringing in such an ill-thought out and patently discriminatory amendment is the palpably slow pace of development work due to the fear amongst high ranking civil servants of being NABBED, evaporating the initial euphoria immediately after the 2018 elections. It seems the slogan of anti corruption and “no NRO” is coming back to haunt the PTI government forcing it to make major course corrections but, at the same time, committing blunders along the way. The present amendment is one such example.

Under the prevailing circumstances, this misconceived thought process of amending laws at the expense of fairness and due process of law as guaranteed under the Constitution seemingly to kick-start economic growth – to win brownie points with the public – is not only a case of too little too late but also the one which is bound to blow up in the government’s face.

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Naya Daur