Public procurement is the process through which government entities in Nepal — ministries, departments, municipalities, and state-owned enterprises — purchase goods, construction works, consultancy services, and other services using public funds. Governed by the Public Procurement Act, 2063 (2007) and the Public Procurement Rules, 2064 (2007), Nepal's procurement framework is designed to ensure transparency, competition, fairness, and value for money in the expenditure of public resources. The Public Procurement Monitoring Office (PPMO) oversees the entire system, from standard bidding documents to the electronic procurement portal (bolpatra.gov.np). This guide covers the legal framework, procurement methods, tender process, bid evaluation, dispute resolution, and the rules governing both domestic and foreign bidders.
| Law / Regulation | Year | Key Function |
|---|---|---|
| Public Procurement Act, 2063 | 2007 | Umbrella legislation — procurement procedures, methods, evaluation, review |
| Public Procurement Rules, 2064 | 2007 | Detailed protocols — document preparation, plans, tenders, contract selection |
| PPMO Standard Bidding Documents | Ongoing | Standardized templates for goods, works, and consultancy procurement |
| Electronic procurement directives | Ongoing | e-GP system (bolpatra.gov.np) operation and compliance |
The Act establishes core principles that govern all procurement activities: openness (public notice of all procurement opportunities), transparency (clear evaluation criteria and public bid opening), competition (equal opportunity for all qualified bidders), fairness (objective and non-discriminatory evaluation), accountability (documented decisions subject to review), and value for money (lowest evaluated cost meeting specifications). Public entities must use neutral specifications — they cannot favour specific brands or suppliers unless absolutely necessary for technical reasons.
PPMO is the central regulatory body for public procurement in Nepal. Its responsibilities include:
| Function | Description |
|---|---|
| Standard documents | Issues and updates standard bidding documents for goods, works, and consultancy |
| e-GP system | Operates bolpatra.gov.np — electronic bidding, notice publication, document access |
| Monitoring | Monitors procurement compliance by public entities |
| Blacklisting | Blacklists fraudulent, corrupt, or non-compliant bidders/contractors |
| Policy advisory | Advises government on procurement policy and reforms |
| Capacity building | Training for public procurement practitioners |
The Act prescribes several methods depending on the nature and value of procurement:
| Method | When Used | Key Feature |
|---|---|---|
| Open competitive bidding (NCB/ICB) | Default method for most procurements | Public notice, open to all qualified bidders |
| Limited bidding | Pre-qualified or selected bidders | Invitation only — used when open bidding is impractical |
| Sealed quotation | Low-value procurements | Simplified process for small purchases |
| Direct procurement | Exceptional circumstances only | Single-source — emergency, proprietary items, national security |
| Users'' committee | Community-managed construction | Local beneficiaries execute small-scale infrastructure projects |
| Force account | Public entity''s own workforce | Construction using entity''s own resources and employees |
National Competitive Bidding (NCB) is the standard method for domestic procurement. International Competitive Bidding (ICB) is used when estimated cost exceeds prescribed thresholds or domestic capacity is insufficient.
For consultancy services, the Act provides specific selection methods:
| Method | Description |
|---|---|
| Quality and Cost Based Selection (QCBS) | Technical quality weighted against cost — most common method |
| Quality Based Selection (QBS) | Selection based purely on technical quality — for complex or high-impact assignments |
| Least Cost Selection (LCS) | Lowest cost among technically qualified proposals |
| Fixed Budget Selection (FBS) | Best technical proposal within a fixed budget |
| Individual consultant selection | For individual experts — based on qualifications and experience |
| Step | Action | Details |
|---|---|---|
| 1 | Procurement planning | Public entity prepares master and annual procurement plans with cost estimates |
| 2 | Fund allocation | Essential funds must be allocated before initiating procurement |
| 3 | Prepare specifications | Objective, neutral descriptions of goods/works/services needed |
| 4 | Prepare bidding documents | Per PPMO standard templates — includes instructions, qualification criteria, evaluation criteria, contract conditions |
| 5 | Publish tender notice | National newspaper + PPMO website (bolpatra.gov.np) + entity website |
| 6 | Pre-qualification (if applicable) | For large/complex works — expression of interest, evaluation, shortlisting |
| 7 | Bid submission | Electronic (e-GP) or physical — within deadline specified in notice |
| 8 | Bid opening | Public opening at specified time and location |
| 9 | Bid evaluation | Committee examines administrative, technical, and financial compliance |
| 10 | Contract award | Lowest evaluated substantially responsive bid wins — notice of intent issued |
| 11 | Contract signing | Performance security submitted — contract executed |
An evaluation committee examines each bid for: administrative compliance (documents complete, bid security included, properly signed), technical responsiveness (meets specifications and qualification criteria), and financial evaluation (arithmetical accuracy, unit rate analysis, lowest evaluated price). The lowest evaluated substantially responsive bid is selected for contract award. Even if only one bid is received, it cannot be rejected solely for lack of competition if it meets all requirements. Bidders are informed of the evaluation outcome, and a notice of intent to award is published.
The Act provides a preference for domestic products — public entities must use goods manufactured in Nepal even if the cost is up to 10% higher than foreign-manufactured alternatives. This provision supports domestic industry and aligns with Nepal's industrial development objectives under the Industrial Enterprises Act 2076.
Foreign bidders can participate in International Competitive Bidding (ICB) when domestic capacity is insufficient or estimated costs exceed prescribed thresholds. Foreign bidders must disclose whether they have appointed a local agent in Nepal and provide agent details. Joint ventures between foreign and domestic construction entrepreneurs are encouraged and may receive preferential consideration. All foreign bidders are subject to Nepal's procurement laws and contract law.
PPMO has the authority to blacklist bidders, suppliers, or contractors for: fraud or corruption, submission of forged documents, collusion between bidders, serious breach of contract, or failure to perform contractual obligations. Blacklisted entities are barred from all government procurement for a specified period. Any new firm partially or fully owned by a blacklisted person is also ineligible. The blacklist is published on the PPMO website for public transparency.
Chapter 6 of the Act provides a structured mechanism for challenging procurement decisions:
| Level | Forum | Deadline |
|---|---|---|
| First review | Chief of the Public Entity | Within 7 days of the decision |
| Second review | Review Committee (established under the Act) | If unsatisfied with first review |
| Court appeal | Competent court | Further appeal from Review Committee decision |
This multi-tier review mechanism protects bidder rights and ensures accountability in procurement decisions.
The Act mandates a code of conduct for all persons involved in procurement — including public entity officials, evaluation committee members, and bidders. Conflicts of interest must be declared and managed. Persons involved in procurement cannot have financial interests in the bidding companies. Violation of the code can result in disciplinary action for officials and blacklisting for bidders.
Certain procurements are exempt from the Act's standard procedures: procurement relating to national security, strategic, or defence matters; procurement under international treaty obligations; emergency procurement (with public notice still required); and procurement by constitutional bodies under their own regulations. Even exempt procurements must maintain basic transparency and accountability standards.
While Nepal Divorce Services is Nepal's first specialized divorce and family law firm, our legal team also advises on public procurement matters. We can assist bidders with understanding tender requirements, preparing compliant bid documents, filing procurement review applications, challenging unfair decisions, and handling blacklisting disputes. For public entities, we provide procurement compliance advisory services.
For legal assistance, contact us at +977 9841114443 or on WhatsApp.
| Topic | Guide |
|---|---|
| Contract law | Contract Law in Nepal |
| Industrial Enterprises Act | Industrial Enterprises Act in Nepal |
| Company registration | Company Registration in Nepal |
| VAT law | VAT Law in Nepal |
| Foreign investment | Foreign Investment Law in Nepal |
| Competition law | Competition Law in Nepal |
Public procurement is the process through which government entities (ministries, departments, municipalities, state-owned enterprises) purchase goods, construction works, consultancy services, and other services using public funds. In Nepal, public procurement is governed by the Public Procurement Act, 2063 (2007) and the Public Procurement Rules, 2064 (2007), administered by the Public Procurement Monitoring Office (PPMO).
The Public Procurement Act, 2063 (2007) is Nepal's umbrella legislation for all government procurement. It establishes procedures for transparent, competitive, and fair procurement of goods, construction works, consultancy services, and other services by public entities. The Act aims to ensure openness, accountability, competition, and value for money in the use of public funds.
The Public Procurement Monitoring Office (PPMO) is the central government body responsible for monitoring, regulating, and overseeing public procurement in Nepal. PPMO's key functions include: issuing standard bidding documents, managing the e-Government Procurement (e-GP) system at bolpatra.gov.np, blacklisting non-compliant bidders, monitoring procurement compliance, and advising the government on procurement policy.
The Act prescribes several procurement methods:
Steps: (1) Public entity prepares procurement plan and cost estimate, (2) Tender notice published in national newspaper and PPMO website (bolpatra.gov.np), (3) Bidding documents prepared per PPMO standard templates, (4) Bidders submit bids (electronically via e-GP or physically), (5) Bid opening in public, (6) Evaluation committee examines bids for responsiveness and technical compliance, (7) Lowest evaluated responsive bid selected, (8) Notice of intent to award issued, (9) Contract signed.
The e-Government Procurement (e-GP) system at bolpatra.gov.np is PPMO's online platform for electronic bidding. Public entities publish tender notices, bidding documents, and amendments on this portal. Bidders can download documents, submit bids electronically, and track procurement status. The system promotes transparency and reduces opportunities for manipulation in the procurement process.
Any registered business entity — domestic or foreign — can participate, provided they meet the qualification criteria specified in the bidding documents. Requirements typically include: valid business registration, PAN registration, VAT registration (if applicable), tax clearance certificate, relevant experience, and financial capacity. Blacklisted entities are ineligible.
Bid security (earnest money) is a financial guarantee that bidders must submit with their bids, usually as a bank guarantee or deposit. It ensures the bidder does not withdraw after submission. The amount is specified in the tender notice (typically 2–5% of estimated cost). Bid security is returned to unsuccessful bidders after contract award and to the successful bidder after signing the contract and providing performance security.
An evaluation committee examines bids for: administrative compliance (documents complete, properly signed), technical responsiveness (meets specifications and qualification criteria), and financial evaluation (arithmetical accuracy, lowest price). The lowest evaluated substantially responsive bid wins. Even if only one bid is received and it is substantially responsive, it cannot be rejected solely for lack of competition.
PPMO has the authority to blacklist bidders, suppliers, or contractors who engage in fraud, corruption, misrepresentation, collusion, or serious breach of contract. Blacklisted entities are barred from participating in any government procurement for a specified period. Any new firm owned by a blacklisted person is also ineligible. The blacklist is published on the PPMO website.
Yes. Chapter 6 of the Act provides for review of procurement decisions. A dissatisfied bidder can file an application before the Chief of the Public Entity within 7 days of the decision. If unsatisfied with the review outcome, the bidder can escalate to the Review Committee established under the Act. Further appeals can be made to the court. This review mechanism ensures accountability and protects bidders' rights.
Foreign bidders can participate in International Competitive Bidding (ICB) when the estimated cost exceeds prescribed thresholds or when domestic capacity is insufficient. Foreign bidders must disclose whether they have appointed a local agent in Nepal. Joint ventures between foreign and domestic firms are encouraged, especially for construction works. All foreign bidders must comply with the same bidding requirements and are subject to Nepali law.
The Act allows users' committees or beneficiary communities to carry out certain construction works directly, particularly in rural areas. The public entity provides funds and technical guidance, while the community manages execution. This method is used for small-scale local infrastructure projects and is governed by specific provisions in the Act to ensure accountability and transparency.
Public entities must prepare: a master procurement plan (multi-year) and an annual procurement plan before initiating any procurement. These plans must detail the goods, works, and services needed, estimated costs, procurement methods to be used, and timelines. No procurement can proceed without prior fund allocation and approval from the governing body.
A lawyer can assist bidders with: understanding tender requirements, preparing bid documents, ensuring compliance with bidding conditions, reviewing contract terms, filing procurement review applications, challenging unfair decisions, and handling blacklisting disputes. For public entities, lawyers ensure procurement compliance with the Act and Rules. Contact Nepal Divorce Services at +977 9841114443.
At Nepal Divorce Services, Nepal's first specialized divorce law firm, we understand that taking the first step toward divorce can feel overwhelming. Our experienced divorce lawyers are here to guide you through the legal process and help you move forward with confidence and clarity.
Whether you're inside or outside Nepal and need assistance with filing a divorce case, our services are accessible worldwide. Contact us at +977 9841114443, on WhatsApp, or Viber.
