Pakistan’s federal government has notified the Public Procurement Rules 2026, introducing a revised framework for government procurement as an International Monetary Fund (IMF) staff mission conducts discussions with Pakistani authorities on the release of $1.2 billion. The new rules were notified two days before the relevant deadline and came into effect immediately, replacing the Public Procurement Rules 2004. Procurement cases initiated before the implementation of the new framework will continue to be governed by the previous rules.
The notification comes as the IMF mission, led by Iva Petrova, holds discussions with officials from the Ministry of Finance, Federal Board of Revenue, Establishment Division, and the finance departments of Khyber Pakhtunkhwa and Punjab. The IMF team arrived in Pakistan on September 23 and initially held engagements in Karachi with the State Bank of Pakistan and other stakeholders. The review discussions are taking place while the government also faces an outstanding structural benchmark concerning amendments to the Sovereign Wealth Fund Act.
The Sovereign Wealth Fund law remains part of the discussions because authorities have not met an end-March 2026 structural benchmark requiring amendments to the law. The proposed changes concern governance mechanisms and safeguards for seven state-owned enterprises with an asset portfolio of approximately $8 billion. The entities include Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Petroleum Company Limited, National Bank of Pakistan, Government Holdings, Pakistan Development Fund and the Neelum-Jhelum Hydropower project. The amendments are still awaiting parliamentary approval.
Under the Public Procurement Rules 2026, the government has sought to strengthen transparency and competition in public procurement while retaining certain provisions that allow direct contracting with state-owned enterprises. Rule 32 allows procuring agencies to use the E-Pak Acquisition and Disposal System (EPADS), a digital procurement system developed and enforced by the Public Procurement Regulatory Authority (PPRA), for direct contracting with state-owned entities in specific circumstances. These include time-sensitive, scattered or remotely located works and services, including consultancy services, where procurement is considered to be in the public interest or required due to urgency. Such contracts cannot be sub-let by the state-owned entity.
The framework also provides authorities with powers to restrict bidding in specific circumstances to national bidders or particular categories of national bidders. It can also allow restrictions on bidders from certain nationalities or provide preference to domestic bidders for selected projects and for goods manufactured, mined, extracted or grown in Pakistan. These provisions remain relevant in the context of discussions with the IMF, which has previously expressed reservations about preferential treatment for state-owned enterprises in direct contracting arrangements.
A major change under the new rules is the mandatory use of EPADS for public procurement and disposal by federal procuring agencies. The framework also provides for dedicated procurement cells and introduces additional safeguards intended to reduce conflicts of interest. These include third-party validation and evaluation as well as pre-shipment inspection requirements for large procurements. The rules further establish stronger enforcement mechanisms through blacklisting and cross-debarment provisions.
The revised framework also establishes independent grievance redressal committees, with an appellate mechanism at PPRA, to address material deviations and cases of mis-procurement. These include deliberate procurement outside EPADS, failure to establish prescribed committees, specifications designed for particular requirements or bidders, violations of advertisement and response-time requirements, and failure to apply prescribed evaluation criteria. The rules also allow alternative procurement approaches, including gallop tendering, shopping and negotiated tendering, subject to specified conditions.
Efficiency measures have also been incorporated into the procurement framework through shorter response times, reduced standstill periods and streamlined tender processing cycles. These changes are intended to enable government agencies to complete procurement processes and award contracts more efficiently. The rules also place emphasis on sustainable procurement and encourage greater participation by SMEs and marginalised groups while linking procurement practices with environmental policy.
PPRA Managing Director Hasnat Ahmed Qureshi said the new framework introduces measures covering the wider procurement cycle, including procurement planning, bidding, contract management, performance evaluation and contract closure. The notification therefore represents a broader restructuring of Pakistan’s federal procurement framework at a time when procurement governance, SOE oversight and compliance with structural benchmarks remain part of the country’s engagement with the IMF.
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