Transformation of the Public Procurement Act in Bangladesh

Comparative Analysis: PPA 2006 vs. Amendment Ordinance 2025

Prepared by:

Md Zahid Hossain Khan
Executive Engineer (Procurement), LGED

Executive Summary

The Public Procurement Act 2006 (PPA 2006) laid the foundation for Bangladesh’s modern procurement framework, introducing standardized rules and oversight under the CPTU. The Amendment Ordinance 2025 represents a paradigm shift, marked by the creation of BPPA, the expansion of digital procurement, the integration of sustainability, and the implementation of stronger accountability measures. This report provides a comparative analysis of the original Act (as amended up to 2019) and the 2025 Amendment, highlighting key reforms and strategic implications for governance, transparency, and efficiency.

Legislative Background:

The PPA 2006 was enacted to regulate all public procurement in Bangladesh, establishing the CPTU as the oversight authority. It provided the foundation for the subsequent Public Procurement Rules (PPR) of 2008. Ordinance 2025, issued as Ordinance No. 16 of 2025, further updated the provisions of PPA 2006 to modernise procurement governance and align with international best practices.

Expanded Definitions and Scope:

The 2025 Ordinance introduces new terms, including procurement strategy, sustainable public procurement (SPP), framework agreement, reverse auction, outsourcing, and beneficial ownership disclosure. These additions broaden the Act’s scope beyond cost-efficiency, incorporating transparency, sustainability, and integrity.
Transparency and Accountability:

PPA 2006 focused on advertisement, bidding methods, and award publication. The 2025 Amendment enhances transparency by mandating full e-GP adoption, requiring disclosure of beneficial ownership, and introducing reverse auctions for real-time competition.

Sustainability and Policy Goals: The 2025 Amendment elevates sustainability as a statutory goal, requiring BPPA to issue guidelines that integrate environmental, social, and economic considerations alongside economic, efficiency, and transparency. Life-cycle costing (LCC) is encouraged for better value-for-money decisions.

Enforcement and Penalties:

The 2025 Ordinance introduces significantly low-price bids while removing the 10% +/- rules, which were widely criticized by many stakeholders. It also extends the scope of misconduct to include failure to disclose beneficial ownership and collusion in e-procurement systems.

In contrast, the PPA 2006 provided for debarment and penalties for fraud/corruption.

Strategic Implication:

• Institutional reform: Transition from CPTU to BPPA strengthens governance.
• Technological transformation: Mandatory e-GP and reverse auctions modernise procurement.
• Global alignment: Beneficial ownership disclosure.
• Market development: Framework agreements and auctions increase efficiency.
• Accountability: Stronger sanctions and transparency measures enhance trust.

Conclusion:

The journey from PPA 2006 to the 2025 Amendment illustrates Bangladesh’s commitment to modernizing procurement. While the 2006 Act provided the foundation for transparency and efficiency, the 2025 reforms address digitalization, sustainability, and accountability challenges. With BPPA as a dedicated authority, Bangladesh is now better aligned with international standards, ensuring procurement that is competitive, ethical, and development oriented.