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Public Procurement in Bhutan
Public procurement in Bhutan plays a central role in translating national development priorities into tangible public services, infrastructure, and social programs. As a small lower middle-income economy with a strong public sector presence, government procurement remains one of the most important channels for public expenditure and market access.
The procurement system in Bhutan is structured to promote value for money, transparency, and fairness while supporting national development objectives. For suppliers, contractors, and consultants, government tenders in Bhutan represent a stable and rules-based market, particularly in sectors such as construction, energy, education, health, and public administration.
For international businesses and development partners, Bhutan’s procurement framework is especially relevant due to its alignment with donor-funded projects, multilateral financing, and standardized bidding procedures. Understanding the regulatory structure and operational practices is essential for successful participation.
Country & Economic Overview
| Country | Bhutan |
| Region | South Asia |
| Population | 791,524 (2024) |
| Income Level | Lower middle-income economy |
| Currency | Bhutanese Ngultrum (BTN) |
| GDP | USD 3,012,896.79 (2023) |
| GNI | 224,389,634.66 (2023) |
| GNI per Capita | USD 3,730 (2023) |
Bhutan operates a stable macroeconomic framework with the Ngultrum pegged to the Indian Rupee. All public procurement contracts are denominated in local currency, which is relevant for foreign bidders managing exchange rate exposure.
Public Procurement Governance Framework
The public procurement system in Bhutan is overseen by designated institutions under the Ministry of Finance, ensuring policy coherence and centralized regulatory oversight.
| Public Procurement Agency (PPA) | Procurement Management and Development Division, Department of National Properties |
| Central Purchasing Body | No (PPA is not a central purchasing body) |
| Central Purchasing Body Name | Central Public Procurement Management Division (CPPMD) |
| Responsible Ministry | Ministry of Finance |
| Geographical Coverage | National |
The CPPMD supports coordinated procurement across government entities, covering sectors such as agriculture, education, energy, health, transportation, and public administration.
Legal & Regulatory Framework
Public procurement in Bhutan is governed by a comprehensive legal and regulatory framework designed to ensure transparency, competition, and accountability.
- Primary legal instruments: Public Finance Act, Procurement Rules and Regulations (PRR), and Standard Bidding Documents
- Core principles: Value for Money, fairness, transparency, and competition
- Value for Money clause: PRR Clause 1.1.1.1
- Most Economically Advantageous Tender (MEAT): PRR 2023, Clause 5.4.1
- Bid securities: PRR 2023, Clause 5.1.9
- Domestic preference: PRR 2023, Clause 1.1.2.3
Specific provisions exist to encourage SME participation, with explicit clauses addressing small and medium-sized enterprise eligibility and participation criteria.
Procurement Procedures & Thresholds
Bhutan’s procurement procedures are standardized across goods, works, and services, with open tendering as the default method.
| Procurement Method | Key Provisions |
| Open Tendering | Default method with public advertisement |
| Direct Contracting | No fixed threshold; subject to conditions under PRR Clause 4.2.5.2 |
| Bid Validity | Defined under PRR 2023, Clause 5.1.8 |
| Standstill Period | Applicable for goods, works, and services |
| Complaint Resolution Period | 10 days |
E-Procurement System Overview
The government operates a national eProcurement platform to enhance transparency and efficiency in public procurement.
| System Name | e-GP System |
| Launch Year | 2017 |
| Ownership / Business Model | Public–Private Partnership |
| Core Functionalities | ePublishing, eTendering, eQuotation |
| Languages | English, Dzongkha |
| Supported Currency | Ngultrum |
Procurement Market Characteristics
Government procurement in Bhutan spans goods, works, and services, with a strong emphasis on infrastructure development and public service delivery.
- Annual tenders: 14,088
- Annual contracts: 3,987
- Total value of annual contracts: USD 48,000,000
- Evaluation method: Predominantly MEAT-based
Transparency, Complaints & Oversight
Bhutan’s procurement framework includes formal mechanisms for complaint handling and oversight.
- Accepted complaints: 5
- Rejected complaints: 18
- Average complaint resolution period: 10 days
Sustainability & Green Public Procurement
The Procurement Rules and Regulations 2023 include sustainability-related clauses, allowing consideration of life-cycle costing and sustainability criteria in procurement decisions.
Social & Ethical Procurement Considerations
Bhutan’s procurement framework incorporates ethical and labor-related requirements.
- Prohibition of child labor under national labor legislation
- Occupational health and safety standards applicable to suppliers
- Ethical sourcing requirements for selected construction materials
Key Challenges & Practical Insights for Bidders
Despite a well-defined regulatory framework, suppliers should be aware of several practical considerations when participating in government tenders in Bhutan:
- Limited availability of detailed procurement statistics
- Capacity constraints within contracting authorities
- Strict compliance with Standard Bidding Documents
- Donor-funded projects may follow separate procurement procedures
Practical bidding tips
- Carefully review procurement clauses under PRR 2023
- Ensure full compliance with bid security and documentation requirements
- Monitor the e-GP system regularly for tender updates
- Prepare for MEAT-based evaluation rather than lowest-price-only competition
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