Govt to end SOEs preference in public contracts by June 2026

Pakistan’s federal government has informed the International Monetary Fund that revised public procurement rules eliminating preferential treatment for State-Owned Enterprises (SOEs) will be promulgated by June 2026, The News reported. 

Following federal cabinet approval, the updated rules will be formally notified, replacing existing regulations to ensure equal treatment of all bidders in public procurement.

Under the proposed framework, procurements exceeding Rs 2 billion will require mandatory third-party evaluation, while contracts between Rs 500 million and Rs 2 billion will be subject to third-party validation. Independent Grievance Redressal and Inspection Committees will be established, and pre-shipment inspections of goods will become mandatory. The Public Procurement Regulatory Authority (PPRA) will maintain a panel of independent experts to assist agencies in evaluation, validation and complaint resolution.

The reforms also aim to restrict direct contracting and make the use of the e-Government Procurement and Disposal System (EPADS) compulsory for all procurement transactions within 12 months. The government plans to implement EPADS across federal agencies and integrate it with public sector enterprises, government departments and databases such as tax records, Nadra and audit systems by June 2027. Provincial rollout is targeted for completion by December 2028.

Quarterly monitoring reports covering development and non-development spending will be introduced to strengthen oversight. Standard Bidding Documents are being revised and are expected to be finalised by June 2026.

Dedicated Procurement Cells have been set up in 122 federal procuring agencies so far. Officials appointed to these cells are required to obtain certification under the PPRA Competency Framework, developed with World Bank assistance. Since July 2024, 2,205 individuals have received training on procurement regulations and EPADS.

PPRA has also strengthened grievance redress mechanisms under the 2021 regulations, with decisions to be published online. The Monitoring and Evaluation Wing will handle complaints, conduct reviews and issue findings along with corrective advisories.

Further measures under consideration include full integration of SOE procurement into EPADS, use of data analytics for risk-based audits, automated red-flag systems to detect irregularities and expanded public disclosure of grievance decisions.

While the IMF has highlighted weaknesses in the procurement framework in its Governance and Corruption Diagnostic Assessment, the PPRA officials said the reforms were not solely IMF-driven.