The government is set to make procurement rules stricter under the limited tendering method or LTM so that bidders are compelled to take up work at lower prices and do them properly.

Limited tendering is a method in which only the known or prequalified bidders are allowed to participate. Tenders are not advertised in newspapers, so other bidders do not come to know that such a tender is being floated.

The decision was taken yesterday at a meeting chaired by Planning Minister AHM Mustafa Kamal. Some other rules of public procurement will also be amended.

Under the existing rules, works of up to Tk 2 crore can be assigned using the LTM. At the meeting, it was decided that the ceiling for LTM will be raised to Tk 3 crore.

At present, the contractor cannot quote 5 percent more or less than the estimated price. But it has now been decided that this clause will be dropped altogether in the amendment. However, if the bidder quotes price 10 percent lower than the estimated one, he would have to provide 10 percent of the contract value as personal security money.

For lower prices, the amount of security money will increase in proportion.

If the work is not completed on time, the contractor will have to pay compensation on a daily and weekly basis.

New contractors will also be able to participate in the LTMs.

Another amendment is being brought that would enable the purchasing authority to cancel an agreement for any fault of the contractor.

The contractor will be disqualified for participation in any tender for government work for 1-2 years.

The rules of the Public Procurement Act will also be changed to prevent a contractor from getting too many works in a year so that the projects can be completed on schedule, a planning ministry official said.

The planning ministry also recommended an amendment to the terms for international open tenders; it called for submission of both financial and technical offers at once.

For district-level work, advertisements will have to be published in a national daily and two local dailies, as per another recommendation.

In the existing rules, placing advertisements in a national daily is mandatory.

A high official of the planning ministry said they would soon send the recommendations for amendment to the cabinet.