The Bhutanese Leading the way.
Construction Association of Bhutan (CAB) said that the revised procurement reforms will address the lopsidedness in the contract documents particularly favoring the procuring agency, in terms of transparency, accountability and legal obligations.
The Executive Director of CAB, Sonam Wangchuk, shared that it is expected that this revision will bring about uniformity in implementation of Procurement Rules and Regulations (PRR) guidelines throughout the country by all procuring agencies because at the moment, PRR is widely customized to suit the outcome of independent/individual procuring agencies.
“It is highly recommended that uniform or same PRR guideline is followed by all SOEs, donor agencies and NGOs,” said Sonam Wangchuk.
“With our country undergoing massive transformation, our PRR should address mundane policy hurdles in order to pursue the ever-changing technological advancements vis-a-vis green-sustainable infrastructure developments. We can focus on these objectives and fulfill the grand visions of quality and modern infrastructure only if the industry is devoid of policy hurdles so that our way forward is to look higher and deliver the best,” he added.
The Ministry of Finance (MoF) will implement the revised PRR from July this year.
The National Assembly on 28th May 2025 unanimously supported the revised PRR and Standard Bidding Documents (SBDs) which was presented by the Ministry Infrastructure and Transport (MoIT)’s Minister, Chandra Bdr Gurung, on behalf of MoF.
The need for the revision was followed after the motion submitted by the Lamgong-Wangchang MP Sonam Tashi, and the 10 recommendations endorsed during the Second Session of the Fourth Parliament regarding challenges arising from the PRR 2023 and the SBD 2023.
Lyonpo Chandra shared that the MoF has initiated the procurement reforms from September 2024.
One major reform is reducing the turnaround time (TAT) by 50%.
For open tendering minimum bid submission days is being reduced from 21 to 14 days and for limited tendering reduced from 5 to 3 days. Evaluation will have to be completed within 14 working days, grievance period is being reduced and contract has to be signed within 10 days.
Additionally, removing the dzongkhag-based business requirement is another major reform. This will provide contractors across the country a fair and equal access to bid and compete in local projects. The implementation will begin from next fiscal year.
PRR and SBDs are being simplified and made more user-friendly. BCTA keeps a list of top performing contractors, similarly, procuring agencies are also required to track preferred bidders based on past work.
Contractor evaluation will look at similar experience, on-time delivery, bid capacity, and Average Performance Score (APS). The APS system is now under review to better reflect actual performance differences.
The Debarment Rules are fully being implemented, and the grounds for debarment include willful nonperformance of contracts, involvement in corrupt practices, and ongoing litigation, among other reasons. Firms that are debarred are excluded from the e-GP system and are prohibited from participating in any bidding process for the duration of the debarment period, which typically ranges from one to five years.
As of 31st January 2025, contractors can substitute equivalent bank guarantee and take the retention money upon completion of project and for projects more than 12 months, take 50% upon completion of 50% of the project.
One of the recommendations were transparent sharing of departmental estimates to promote fair competition and reduce biased outcomes. MoF is reviewing the recommendation and the outcome will depend upon the finalization of the evaluation parameters.
Regarding the adjustment of technical resource requirement, MoF has implemented it on January this year. The equipment can now be mobilized only at the time when required at the site and can be released anytime during the contract implementation as per work plan.
Joint Ventures will not be restricted henceforth. However, going forward a minimum stake of 80:20 will be fixed and clauses on contract administration of JV will be strengthened.
Lyonpo shared that currently some contractors propose 99:1 stake, which is practically unrealistic.
Furthermore, MoF is also introducing alternative methods of procurement like the Design, Build, Operate (DBO) in the PRR to be implemented from next fiscal year.
Also, the ministry as part of the reforms is looking into strengthening contract management which includes supervision and monitoring. Discussions are on-going with BCTA, RAA and MoIT on this front.
These reforms aim to enhance transparency and accountability, strengthen competition and market access, improve flexibility and innovation in procurement methods and strengthen enforcement and compliance mechanisms.
Regarding the proposed Procurement Bill, it will undergo a thorough review, extensive deliberation, and a detailed analysis of potential implications before a decision is made on the necessity of an Act.
Further, MPs provided several recommendation including shortages of human resources, monitoring for quality results, inclusion of Procurement Bill and private sectors, time management frame, uniform guideline across sectors, legal framework, site insurance in terms of natural disasters, variations in estimates depending on location, ghost engineers, cost overrun, etc.
Stakeholder consultations were conducted in ministries, dzongkhags, thromdes, and oversight agencies, including the Anti-Corruption Commission and the Royal Audit Authority, as well as CAB.
After the completion of the consultation in December 2024, a task force was established comprising representatives from the MoIT, the Ministry of Industry, Commerce, and Employment (MoICE), Thimphu Dzongkhag, and the CAB and private think tanks to finalize the revised PRR and the SBDs.
