Contractors laud amendment to Public Procurement Act

Kathmandu, July 15

The Federation of Contractors' Associations of Nepal (FCAN) has said that the second amendment to the Public Procurement Act, 2007 will accelerate the country's infrastructure development.

Expressing its gratitude to the government, through a statement on Tuesday, for this facilitation, it said that the amendment's provision replacing the practice of awarding contracts through 'low bidding' with an average bid evaluation method is highly positive and is expected to resolve most of the longstanding problems facing the infrastructure sector.

"The Federation is confident that this amendment will prove to be a milestone in the development of the infrastructure sector and mark the beginning of a new chapter for the construction industry," said FCAN's General Secretary, Shiva Hari Ghimire.

According to the FCAN, the amendment contains several positive provisions, including prohibiting the initiation of procurement processes without budget allocation or secured funding, and allowing tender invitations only after land acquisition, compensation, site clearance and environmental approvals have been completed.

It also includes rules requiring cost estimates to be prepared in accordance with government-approved standards, and clearly defining the responsibilities of employers, contractors, suppliers and consultants.

The Federation further stated that the amendment will help expedite the construction sector by providing incentives, bonuses and other benefits to government employees who ensure the timely completion of quality projects, while also offering contractors incentives and letters of appreciation as prescribed. It also welcomed the reduction of the performance guarantee requirement to 5 per cent.

"The FCAN believes that other provisions, such as recognising the combined qualifications of companies following mergers, shortening the time allowed for bid submission, and making the decisions of the Public Procurement Review Committee binding for implementation, will contribute to making the infrastructure sector more orderly and professional," read the statement.

Meanwhile, the Federation urged the government to ensure that the forthcoming amendment to the Public Procurement Regulations includes a provision allowing price adjustment for procurement contracts of all periods.

Published in The Rising Nepal daily on 16 July 2026.