Procurement and Arbitration Law Nepal - PALN

?? Public Procurement Clarification The Urban Development and Building Construction Department, Division Office, Parsa, rejected all tenders for a building construction project under Section 26(1)(a) of the Public Procurement Act, 2063, due to non-responsiveness. They issued a new tender call, raising a query on authority under the Act. ?? PPMO Opinion Highlights: ? Evaluation committees should only recommend, not decide. ? Non-responsiveness points to technical competency issues. ? Section 26(1) applies before tender approval—Treasury and Accounts’ response is inaccurate. ? Authority to cancel rests with a second-class office head. ? “Re Invitation of Tenders” is incorrect; issue a fresh notice per Section 26(5). ??? Decision Date: 2065/08/22 #ProcurementLaw #PublicProcurement #TenderProcess #LegalUpdate #ConstructionLaw #PPMO #PublicPolicy #LegalConsultation #Nepal #Transparency #LegalCompliance #PALN #TenderNotices #LegalInsights #BuildingConstruction #LawUpdate #UrbanDevelopment

We are pleased to announce the latest additions to the PALN team: ?? Project Development Officer ?? ?? Legal Affairs Officer ?? These talented professionals bring a wealth of passion ?? and expertise ?? that will support our continued commitment to excellence ?? in construction ??? and arbitration law. Please join us in giving them a warm welcome! ?? #TeamPALN #NewBeginnings #WelcomeAboard #LegalExcellence #ConstructionLaw #ArbitrationLaw #TeamGrowth #PALNUpdates #BuildingSuccess #LegalProfessionals #TogetherWeGrow #NepalLaw #LawFirm

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?? Understanding Cost-Plus Contracts in Construction ??? A Cost-Plus Contract offers flexibility for owners but also comes with greater price uncertainty. Under this type of agreement, the contractor is reimbursed for all costs, including overheads and profit, while the owner retains the cost risk. ?? When is it useful? ? When the project scope is not well-defined. ? When there’s uncertainty about the materials, labor, or equipment needed. ?? What to consider: ? High cost administration to track all time and materials. ? Complete, verifiable records are essential. While offering flexibility, cost-plus contracts require careful management to ensure transparency and control over expenses. ?? Contact PALN for expert legal advice on managing and drafting construction contracts in Nepal. #ConstructionLaw #CostPlusContract #ContractManagement #LegalInsights #PALN

?? Did You Know? Public Procurement Regulation Rule 77 ??? Preference for Local Products Under Public Procurement Regulation, 2074, Rule 77: ?? Public entities MUST prioritize Nepali products when making purchases. ?? Even if Nepali goods are up to 15% more expensive than foreign alternatives, preference must still be given to local products. - Write this in sentence ?? Why is this important? This rule aims to promote local industries and support Nepal's economy. Contractors and suppliers involved in public projects should ensure compliance with this provision while making procurement decisions. . . . . . . . . . . #LocalProducts #NepaliGoods #SupportNepal #PublicProcurement #NepalEconomy #ProcurementRegulation #NepaliIndustry #SustainableProcurement #Rule77 #MadeInNepal

?? Current Construction Issue – Price Hikes & Anti-Competitive Practices ?? Frequent price hikes in cement and steel rods are significantly impacting the construction sector in Nepal. FCAN raises concerns about potential cartelization, with cement prices up by NPR 200 per bag and steel rods by NPR 15 per kg. Under the Competition Promotion Act 2063, these practices may violate anti-competition laws, including price-fixing and market manipulation. The Competition Board can intervene, investigate, and impose penalties to restore fair practices. The construction industry needs fair pricing and transparency and contractors need to unite to address these challenges and ensure a sustainable, competitive market. #ConstructionIssues #PriceHike #Cement #SteelRods #NepalConstruction #CompetitionLaw #FairPricing #Cartelization #MarketProtection #ConstructionSector #FCAN #UniteForFairness

When can an employer reject or cancel a bid in public procurement? ?? Understanding the legal framework is critical for both employers and contractors to ensure fairness and transparency in the bidding process. As outlined in Section 23 of Nepal’s Public Procurement Act, 2063, bids can only be rejected or canceled under specific circumstances, such as non-responsiveness, failure to finalize a contract, or cost estimates being exceeded. However, fairness is prioritized—bids cannot be rejected solely because only one or a few are responsive. Transparency matters, and knowing your rights is the first step to protecting them. For more insights on procurement and construction law, follow Procurement and Arbitration Law Nepal. ????? . . . . . . . #ProcurementLaw #ConstructionLaw #NepalLaw #PublicProcurement #LegalAwareness #TransparencyMatters #ConstructionInsights #BiddingProcess

Choosing the Right Contract Type: A Key to Project Success ??? In construction projects, the choice of contract type determines how payments are structured and who takes the financial risk. Here’s a quick breakdown of the most common types: 1?? Fixed-Price (Lump Sum): The contractor agrees to a fixed amount for the entire project, taking on the cost risk. If costs increase, they bear the loss; if managed efficiently, they make a profit. 2?? Remeasurement Contracts: Payments are based on the actual work completed and measured. More work = more pay, less work = less pay. 3?? Cost-Plus Contracts: The owner covers all costs plus an agreed fee for the contractor. Here, the owner takes on most of the cost risk. In Nepal, Lump Sum (Fixed Price Contracts) and Unit Price Contracts are the most commonly practiced types. ?? Key takeaway: Choosing the right contract type helps manage risks, streamline costs, and ensure project success. For more insights into Procurement and Arbitration Law, stay connected or follow my page. Let’s simplify construction law together! . . . . . . . . . . #ConstructionLaw #ProcurementLaw #Arbitration #Contracts #ProjectManagement #Nepal #LegalInsights #ConstructionIndustry

An ideal construction contract is one that strategically allocates risks to the party best equipped to manage and minimize them. ??? This approach not only ensures cost-effectiveness but also builds a solid foundation for project success. Key principles to consider when allocating risks: ?? Which party has a comparative advantage in managing the risk? ?? Which party has control over the risk? ?? Who can best foresee the risk? ?? Who benefits or suffers the most if the risk occurs? Even ancient laws like Hammurabi’s Code emphasized clear responsibilities and fairness, principles that remain relevant in modern contract drafting. Looking to create smarter contracts and optimize risk allocation? Follow Procurement and Arbitration Law Nepal for expert insights into construction law and procurement strategies. Let’s build better, together! ?? . . . . . . . . . . . . . . . . #ConstructionLaw #RiskManagement #ProcurementLaw #ContractDrafting #ProjectSuccess

Contract works in construction are unique in that they are permanently fixed to land, making them impossible to return once completed, even if deemed unsatisfactory. These works are often carried out under unpredictable conditions, such as varying material and labor quality, and in open-air environments. Additionally, excavation and foundation conditions can’t always be fully anticipated until the ground is exposed, adding another layer of complexity. Understanding these challenges is crucial for contractors to manage risks effectively and ensure project success.