The federal government has replaced the 2004 public procurement framework with new rules that make digital procurement mandatory, introduce stronger oversight mechanisms and retain limited provisions for direct contracting with state-owned entities.
The Public Procurement Rules 2026 were notified on Monday, two days before the deadline, as an International Monetary Fund staff mission continued discussions with Pakistani authorities on the $1.2 billion disbursement.
The IMF team, led by Iva Petrova, has been in Pakistan since September 23 and is holding meetings with officials from the finance ministry, Federal Board of Revenue, Establishment Division and provincial finance departments.
The new rules come as Pakistan remains behind on a structural benchmark related to amendments to the Sovereign Wealth Fund Act. The amendments, which require parliamentary approval, are intended to introduce governance mechanisms and safeguards for seven state-owned entities with an asset portfolio of about $8 billion.
Under the new procurement framework, federal procuring agencies must use the E-Pak Acquisition and Disposal System, or EPADS, for public procurement and disposal. The rules also require procuring agencies to establish dedicated procurement cells and introduce third-party validation and evaluation for large procurements.
The government has retained a provision allowing procuring agencies to directly contract state owned entities through EPADS for certain works and services, including consultancy services, when they are time sensitive, scattered, remotely located or in the public interest. Where multiple eligible state owned entities can perform the work, competition between them through limited tendering will be required. The rules also require mechanisms to determine whether prices offered by state owned entities are reasonable.
The framework allows limited subcontracting in specialized project components, with such work capped at 40 percent of the total work assigned to the state owned entity. It also requires the entity to otherwise perform the work through its own resources and meet other conditions prescribed under the rules.
The rules also allow procuring agencies, under government policy, to restrict participation to national bidders or certain categories of national bidders, prohibit bidders of certain nationalities and provide preferences to domestic bidders for specified works and locally manufactured, mined, extracted or grown goods. Any preference must be clearly stated in the bidding documents.
For larger procurements, the rules introduce additional checks. Bid evaluation committees will handle procurements valued at up to Rs. 2 billion, while procurements above that threshold will undergo third party validation and evaluation involving members from outside the procuring agency. The framework also provides for blacklisting and cross debarment of bidders, suppliers and contractors for specified violations, with bans extending up to 10 years in cases involving certain corrupt or fraudulent practices.
The new framework also allows alternative procurement methods, including shopping, negotiated tendering and gallop tendering, subject to specified conditions. It shortens certain response and tender processing periods, introduces measures to reduce conflicts of interest and promotes sustainable procurement, including greater participation by small and medium sized enterprises and marginalized groups.
The Public Procurement Regulatory Authority said the new rules, made under the PPRA Ordinance 2002, are effective immediately. Procurement cases initiated before their commencement will continue under the 2004 rules. PPRA Managing Director Hasnat Ahmed Qureshi said the new framework strengthens oversight across the procurement cycle, from planning and bidding to contract management and closure.
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