Federal and Provincial governments as well as organizations and enterprises under these governments routinely issue tenders for procurement of goods and services. As per PPRA rules, the lowest bidder & supplier generally win the tender and must comply with all conditions of the tender. There is usually no force majeure for increase in rates & prices except if government increases taxes, or duties.
Normally, the PKR-US$ parity would go up and down in pennies or a Rupee or two.
However, the recent free fall of the PKR has created a monumental headache for those who have won these tenders and have to comply as per delivery period.
The question now is whether enterprises would participate in tenders especially with the continuous downslide of the currency, the increasing bank markup rates, the galloping high inflation, the erratic supply of gas, the nerve-wrecking political instability, and the uncertainty of the economy?
PPRA rules need to be revisited and force majeure clauses in tenders should also include provision of rate increase if value of PKR zooms upward.
