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Public Procurement in Nepal
Public Procurement in Nepal plays a critical role in public service delivery, infrastructure development, and economic governance within a lower middle-income South Asian economy. Given Nepal’s mountainous geography, federal governance structure, and high public investment needs, government procurement constitutes one of the largest channels of public expenditure and market access for contractors, suppliers, and consultants.
The procurement system in Nepal operates under a comprehensive legal and regulatory framework and is centrally overseen by the Public Procurement Monitoring Office (PPMO). Procurement activities are implemented by federal, provincial, and local government entities, covering a wide range of sectors including transport, energy, education, health, water supply, and public infrastructure.
For domestic firms, regional contractors, and international bidders, government tenders in Nepal represent a large and structured procurement market, supported by a mature national e-government procurement platform and strong donor engagement.
Country & Economic Overview
| Country | Nepal |
| Region | South Asia |
| Population | 31,000,000 (2024) |
| Income Level | Lower middle-income economy |
| Currency | Nepalese Rupee (NPR) |
| GDP | USD 41.2 billion (2024) |
| GNI | USD 42.0 billion (2024) |
| GNI per Capita | USD 1,350 (2024) |
| Public Procurement Expenditure | Approximately 5.77% of GDP |
Nepal’s economy is characterized by strong public-sector-led investment, particularly in infrastructure, hydropower, roads, urban development, and social services. Public procurement therefore functions as a primary instrument for translating fiscal policy into tangible development outcomes.
Public Procurement Governance Framework
The institutional governance of public procurement in Nepal is centralized at the regulatory level and decentralized at the implementation level.
| Public Procurement Agency (PPA) | Public Procurement Monitoring Office (PPMO) |
| Central Purchasing Body | No formal CPB; PPMO exercises regulatory authority |
| Coverage | Federal, Provincial, and Local Governments |
The PPMO is responsible for policy formulation, legal oversight, monitoring, capacity development, and operation of the national e-procurement system. Contracting authorities across all tiers of government are responsible for conducting procurement in compliance with national legislation.
Legal & Regulatory Framework
The public procurement law in Nepal is governed by the Public Procurement Act, 2063 (2007) and the Public Procurement Regulations (PPR). The framework establishes procurement principles, methods, thresholds, and accountability mechanisms.
- Most Economically Advantageous Tender (MEAT): Article 25(5)
- Sustainability Considerations: Article 44
- Bid Securities: Article 21
- Public Bid Openings: Article 22
- Domestic Preference: Article 14(8)
- Complaint Resolution: Article 50
The legal framework provides structured procedures for goods, works, and services procurement and applies equally to donor-funded projects unless otherwise specified in financing agreements.
Procurement Procedures & Thresholds
Procurement procedures in Nepal are standardized under the Public Procurement Act and detailed in the Public Procurement Regulations.
- Tender Thresholds: Defined under Article 9 and specified in the PPR
- Direct Contracting: Article 8 (thresholds defined in PPR)
- Standstill Period: Article 27(3)
- Bid Validity: Article 20
- Advertisement Period: Article 30(1)
No minimum contract award disclosure threshold is prescribed; disclosure requirements are applied administratively through the e-procurement platform.
E-Procurement System in Nepal
Nepal operates a mature national e-government procurement (e-GP) system that supports end-to-end electronic procurement.
| System Name | National Electronic Government Procurement System (e-GP) |
| Launch Year | 2013 |
| Website | https://bolpatra.gov.np/egp/ |
| Functionalities | ePublishing, eTendering, eEvaluation, eContract Management, ePurchasing, Vendor Management |
| World Bank Usage | Yes |
| Value Through e-Procurement | Approximately 70% of total procurement value |
The system supports transparency, competition, and efficiency and publishes procurement data aligned with open data principles.
Procurement Market Characteristics
Nepal’s public procurement market is one of the largest in South Asia relative to GDP and is dominated by works contracts.
- Annual Contracts: 112
- Total Contract Value: USD 9.9 million
- Works Contracts: 100 (USD 9.68 million)
- Goods Contracts: 12 (USD 220,209)
- Open Competitive Awards: 105 contracts
- Direct Awards: 7 contracts (USD 68,575)
The procurement market is predominantly domestic, with strong participation by national contractors, particularly in construction and infrastructure projects.
Transparency, Complaints & Oversight
The procurement framework provides formal complaint mechanisms, administrative review procedures, and monitoring by the PPMO. Complaint resolution is governed by Article 50 of the Public Procurement Act.
Procurement data, tender notices, and contract awards are publicly accessible through the national e-GP platform.
Sustainability & Green Public Procurement
The Public Procurement Act includes provisions allowing sustainability considerations in procurement decisions. However, Nepal does not yet have a dedicated national green public procurement strategy or mandatory environmental procurement targets.
Social & Ethical Procurement Considerations
The legal framework includes domestic preference provisions but does not establish explicit statutory quotas for women-owned businesses or disadvantaged groups. Ethical conduct and fairness are embedded through eligibility and compliance requirements.
Key Challenges & Practical Insights for Bidders
- Complex terrain affecting project implementation and logistics
- High competition in works procurement
- Capacity variations across sub-national contracting authorities
- Strict procedural compliance requirements
Practical bidding tips
- Register and maintain an active profile on the national e-GP system.
- Closely review qualification and bid security requirements.
- Factor geographic and seasonal risks into pricing.
- Monitor donor-funded procurement pipelines.
Overall, Public Procurement in Nepal offers a large, rules-based, and increasingly digital procurement environment where compliant and well-prepared bidders can access substantial public sector opportunities.
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