Contractors have demanded that the Public Procurement Act, which only permits the lowest bidder to be awarded contracts, be changed. They have charged that the traditional practice has led to low quality work.
The 16th annual general meeting of the Federation of Contractor Associations of Nepal (FCAN) asked the government to amend the law so that bidders quoting the average price would be awarded the contract. The conference concluded on Saturday.
The contractors’ association stated in a 26-point declaration that bids up to 15 percent higher than the lowest offer should be considered for awarding the contract. The federation has decided to mount pressure on the government to dump the custom of the lowest bidder winning the contract Government officials have also been complaining that the legal provision of awarding the contract to the lowest bidder has delayed a number of projects as contractors seek a variation order on the pretext that various obstacles had held up construction work.
Contracts for the Upper Trishuli 3A Hydropower Project and the Melamchi Hydropower Project were awarded to the lowest bidder, but the contractors failed to complete the work on time. In the case of Melamchi, a new contractor has been appointed to resume construction from where the old contractor left off. The FCAN has also criticized statements by government officials that the government would not give a 20 percent mobilization fee to start construction work. “The mobilization fee should be given up to 75 percent based on the nature of the job,” said FCAN in a statement.
However, government officials have been arguing that contractors have been misusing such funds by investing the money in other personal business es instead of the actual project which has delayed the construction of important development projects. Meanwhile, the FCAN has also agreed to pressurize the government to invite tenders as early as possible instead of the traditional
period of April-May as this forces them to work during the rainy season after the contract is awarded.
They have also demanded security for contractors working in area-based projects stating that they had been facing security threats in the field. According to the contractors, goons who have been prevented from interfering in the bidding process due to the introduction of e-bidding have been hassling them at the project sites.
The FCAN also demanded the formation of a legal provision for mergers of construction companies as there is great possibility of them consolidating. “While drawing up the legal provision on mergers, the experience, turnover and bank references of the merging companies should be taken into account,” stated the FCAN. The contractors have also decided to endeavour to bring down the bank interest rate for their projects. They said that they would try to bring down the rate to 7-8 percent from the current 14-15 percent.
Source
The 16th annual general meeting of the Federation of Contractor Associations of Nepal (FCAN) asked the government to amend the law so that bidders quoting the average price would be awarded the contract. The conference concluded on Saturday.
The contractors’ association stated in a 26-point declaration that bids up to 15 percent higher than the lowest offer should be considered for awarding the contract. The federation has decided to mount pressure on the government to dump the custom of the lowest bidder winning the contract Government officials have also been complaining that the legal provision of awarding the contract to the lowest bidder has delayed a number of projects as contractors seek a variation order on the pretext that various obstacles had held up construction work.
Contracts for the Upper Trishuli 3A Hydropower Project and the Melamchi Hydropower Project were awarded to the lowest bidder, but the contractors failed to complete the work on time. In the case of Melamchi, a new contractor has been appointed to resume construction from where the old contractor left off. The FCAN has also criticized statements by government officials that the government would not give a 20 percent mobilization fee to start construction work. “The mobilization fee should be given up to 75 percent based on the nature of the job,” said FCAN in a statement.
However, government officials have been arguing that contractors have been misusing such funds by investing the money in other personal business es instead of the actual project which has delayed the construction of important development projects. Meanwhile, the FCAN has also agreed to pressurize the government to invite tenders as early as possible instead of the traditional
period of April-May as this forces them to work during the rainy season after the contract is awarded.
They have also demanded security for contractors working in area-based projects stating that they had been facing security threats in the field. According to the contractors, goons who have been prevented from interfering in the bidding process due to the introduction of e-bidding have been hassling them at the project sites.
The FCAN also demanded the formation of a legal provision for mergers of construction companies as there is great possibility of them consolidating. “While drawing up the legal provision on mergers, the experience, turnover and bank references of the merging companies should be taken into account,” stated the FCAN. The contractors have also decided to endeavour to bring down the bank interest rate for their projects. They said that they would try to bring down the rate to 7-8 percent from the current 14-15 percent.
Source
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