Procurement Reform 2025: New Rules, Wider Access, and Greater Flexibility

The government has overhauled the public procurement framework through the newly issued Public Procurement (Amendment) Ordinance-2025, introducing a series of major reforms aimed at enhancing transparency, competition, and flexibility.

One of the key changes is the removal of the price range cap for bids. Previously, bidders in national competitive tenders had to keep their prices within 10% of the government’s estimated cost, while limited tendering allowed only a 5% variation. This is expected to allow for more realistic and market-responsive pricing.

Another significant reform is the mandatory use of the e-Government Procurement (e-GP) portal for all public procurement, which since its launch in 2011, has been used in fewer than 65 percent of government purchases. Making it compulsory is aimed at boosting efficiency, transparency, and accountability in the procurement process.

The ordinance also introduces a new categorization system for procurement. The traditional categories of goods, works, and services have been updated;—services are now divided into two broader and clearer categories: physical services and intellectual services. This change recognizes the growing demand for outsourced services like catering and event management, which were not distinctly classified before.

A landmark change is the inclusion of non-governmental organizations (“NGOs”) as eligible participants in public tenders. Previously excluded due to structural differences in fund management, NGOs can now bid for public projects, provided they are registered and authorized by the relevant regulatory body.

The ordinance also offers greater flexibility in the use of tender documents. While government-issued standard tender documents were once mandatory across all procurements, for complex projects procuring entities may now opt to use internationally-recognized documentation, such as those from the International Federation of Consulting Engineers, or British standards, subject to approval from the Bangladesh Public Procurement Authority.

In another notable policy shift, negotiations are now allowed in the procurement of physical services. This change acknowledges the practical complexities of procuring services like event management and operational support, allowing negotiations under specific conditions.

Overall, these reforms represent a substantial shift toward a more inclusive, transparent, and adaptable procurement system that better reflects the evolving needs of public sector projects.