News

17 contracting firms blacklisted for three years

October 04, 2017

The Public Procurement Monitoring Office (PPMO) has blacklisted 17 civil contractors for breaching contractual agreements and failing to complete the projects within the agreed timeframe.

These contractors have been blacklisted for three years. This is the first time that such a big number of non-performing contractors have been blacklisted for three years. So far, the office had been blacklisting contractors only for a year - the minimum punishment prescribed in the Public Procurement Act 2007.

However, none of them are Class 'A' contractors. All the 17 firms are small scale contracting firms. Most of them were penalized for their failure to complete construction work in time, while some did not contact the division offices of the Department of Roads (DoR) after letter of acceptance for contracts were published. 

As per the existing law, project managers can recommend the office for blacklisting of contractors if they are found breaching contractual agreements, using fake documents in tender processes or colluding with other contractors for one to three years. Based on the recommendation, the PPMO conducts thorough investigation and allows defendants to put their say before deciding to take action against them. 

The office has to take decision within six months of the recommendation for blacklisting made by project managers or department heads. 

Drona Timalsina, a section officer with the PPMO, said that the office has been working to make blacklisting provision an effective tool in governance of contract management. “This is the first time that such a large number of contractors have been blacklisted for three years - the maximum time prescribed in the law - at a go,” he added.

The PPMO, however, has yet to take any action against big contractors who have remained idle despite bagging several big contracts. These contractors use the mobilization fund, which is equivalent to 20 percent of the project cost, for other purpose. They knock the doors of political parties if project managers try to hold them accountable and get political protection.

Dinkar Sharma, former director general of the DoR, told Republica said that the decision to blacklist contractors for three years could help a lot in governance of contractors. “Blacklisting for one year won't affect contractors at all. They just complete their projects in hand and bid for projects after one year,” he added.

Source: Republica

http://www.myrepublica.com/news/28453/