The government has changed public finance regulations, allowing the procurement of goods and services without a competitive bidding process for the next two years. This means that certain government projects can now be awarded directly to a company without inviting multiple suppliers to compete for the contract.
What kind of projects will be affected?
The amendment applies to projects that are considered essential for public welfare and security. This includes:
- Projects that enhance basic needs and improve living standards.
- Security-related projects submitted by government offices.
The Cabinet or a Cabinet committee will decide which projects fall under these categories.
How will these projects be approved?
Government offices must submit proposals to the Ministry of Finance, which will review and approve them based on set procedures. These procedures will be determined by the ministry, the Cabinet, or a relevant Cabinet committee.
What about financial guarantees?
The new regulation allows the Minister of Finance to exempt certain projects from financial requirements like:
- Bid security (a financial guarantee that ensures serious participation in the bidding process).
- Performance guarantees (a security that ensures the project is completed as agreed).
This means that some projects can be awarded without requiring companies to provide these financial safeguards. However, ministries responsible for such projects will still need to monitor their progress and submit updates to the finance ministry.
How is this different from before?
Previously, government projects had to go through a competitive bidding process to ensure transparency. This rule was introduced in January 2019, particularly to prevent corruption in projects funded by foreign aid or concessional loans. The latest amendment reverses that requirement, making it possible for the government to award contracts directly without competition.
By removing the bidding requirement, the government argues that critical projects can be completed faster. However, this change has raised concerns about transparency and accountability, as awarding contracts without competition can increase the risk of favouritism or misuse of funds.
With these changes in place, government ministries will have more flexibility in awarding contracts, but the public will be watching to see how this affects the fairness and efficiency of project implementation.
