In a sweeping move set to transform public procurement in Bhutan, the Ministry of Finance (MoF) has announced significant revisions to the nation’s procurement framework, redefining how contractors are evaluated, how bids are assessed, and how projects are awarded. The changes, detailed in a notification issued on January 13, 2026, overhaul the Standard Bidding Documents (SBDs), Evaluation Guidelines, and the electronic procurement system (eTOOL), ushering in a new era of transparency, accountability, and efficiency in Bhutan’s public procurement landscape.
The Ministry emphasized that the reforms are designed to ensure realistic assessment of contractor capacity, improve fairness in the bidding process, and reduce unnecessary procedural burdens—particularly in the construction sector, where project complexity and financial stakes are high. The amended provisions are immediately applicable to all works evaluated or tenders published after the notification date, signaling an urgent and decisive shift in procurement practices.
A central feature of the reforms is the introduction of a rolling monthly assessment system for evaluating key performance criteria such as Similar Work Experience, Bid Capacity, and Average Performance Score (APS). Previously, these metrics were calculated based on fixed calendar years—a method often criticized for misrepresenting a contractor’s current capabilities or favoring older projects.
Under the new system, similar work experience will now consider projects completed within the last five years from the month of bid opening, providing a more accurate reflection of recent achievements. Bid capacity will be calculated based on completed and ongoing projects over the last three years, while APS will assess performance scores from the preceding five years.
A senior MoF official explained the rationale behind the change: “The rolling assessment system provides a fairer and more realistic evaluation of bidders’ experience and performance, rather than relying on rigid calendar-year calculations. This approach ensures that contractors are evaluated based on what they can realistically deliver today, not what they may have achieved years ago.”
This measure is expected to level the playing field, allowing competent, smaller contractors to compete more effectively while ensuring that larger contractors are assessed based on their current workload and proven capacity.
In tandem with rolling assessments, the Ministry has introduced stricter rules regarding work-in-hand limits. Under the amended SBD provisions, bids will be rejected outright if a contractor exceeds the allowable work-in-hand threshold at the time of evaluation.
Evaluation committees are now required to verify ongoing projects immediately, either when data is transferred from the eGP system to eTOOL for online tenders or on the day it is entered for offline tenders. Any contractor exceeding the prescribed limits will not proceed further in the evaluation process.
“This provision safeguards project implementation by ensuring that contractors do not take on more work than they can realistically execute,” the official said. “It prevents delays, over-commitment, and potential cost overruns, ultimately protecting the integrity of public projects.”
The reforms also bring greater transparency to shortlisting practices. In line with the Public Procurement Rules and Regulations (PRR) 2025, procuring agencies are now mandated to maintain and publish an annual list of qualified bidders for limited tendering and direct contracting.
This list must be prepared based on past performance indicators, including timely completion, quality of work, absence of adverse records, and demonstrable capacity to execute works. Once approved by the tender committee, it must be made publicly accessible through agency websites or other official channels.
“Maintaining a publicly accessible list of qualified bidders strengthens accountability and builds trust in the procurement process,” the Ministry noted. “It also ensures consistency in shortlisting practices, helping prevent favoritism and enhancing confidence among contractors and stakeholders alike.”
To further ease procedural burdens, the Ministry has revised requirements for contract-based key personnel. Contractors are no longer required to submit provident fund records, health contributions, payslips, or tax deducted at source (TDS) documents. Instead, a signed contract agreement—endorsed by the Construction Association of Bhutan (CAB)—will suffice.
The CAB endorsement, valid for up to 12 months, will focus on verifying the authenticity of the contract and confirming the engagement of the individual.
A representative from the construction sector welcomed the change: “This will significantly reduce paperwork while still maintaining accountability. It is a practical reform that responds to long-standing concerns from contractors and ensures compliance without unnecessary administrative hurdles.”
The MoF stressed that the reforms are part of a broader effort to modernize Bhutan’s procurement systems, strengthen governance, and promote fair competition. By integrating rolling assessments, strict work-in-hand limits, publicly available bidder lists, and simplified documentation, the Ministry aims to create a transparent, efficient, and accountable procurement framework that benefits both the government and the private sector.
“These reforms are intended to promote transparency, efficiency, and realistic capacity assessment in public procurement, while also reducing unnecessary administrative burdens,” the Ministry stated.
Analysts say that these changes are likely to have far-reaching effects on Bhutan’s construction sector and broader public investment climate. By evaluating contractors based on current capacity and performance, the government reduces the risk of project delays and cost overruns while encouraging responsible bidding practices.
In addition, the public disclosure of qualified bidders and simplified documentation will likely improve trust, foster healthy competition, and ensure that projects are awarded to competent, capable contractors. The reforms are expected to become a benchmark for best practices in South Asia, demonstrating how procurement systems can be both rigorous and practical, balancing accountability with efficiency.
Bhutan’s bold procurement overhaul signals a new era of fairness, transparency, and professionalism, ensuring that public projects are executed efficiently, responsibly, and in the best interest of the nation. For contractors, stakeholders, and the public alike, the message is clear: competence, accountability, and transparency will now define the path to winning public contracts.
Nidup Lhamo
From Thimphu
