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Govt Revises Time Basis for Project Price Adjustment

JAKARTA: The government revises the time basis for price adjustment for multiyear contracts on government goods/service procurement from the first month to the 13th month in a bid to save state budget.
The revision will be inked in a comprehensive revision of Presidential Decree 80/2003 on Guide to Government Goods and Service Procurement, which is made based on input from the Development Finance Controller (BPKP).
"The new regulation is recommended by BPKP. According to BPKP, if the price adjustment or escalation starts in the first year of the contract, the government will be severely injured," said Agus Rahardjo, Acting Head of the Government Goods/Service Procurement Policy Institution (LKPP), yesterday.
Agus explained the government would only accept escalation for multiyear contracts. The escalation would refer to inflation or deflation in the 13th month. Therefore, the price escalation could lead to fund increase or fund reduction.
Not Necessarily through Minister of Finance
Agus added another suggestion accommodated into the revision was the stipulation that the approval of multiyear contracts could be given by the related ministers, not necessarily by the Minister of Finance.
However, the related ministers could only approve multiyear contracts worth up to 40% of the allotted platform, while the rest 60% still had to be approved by the Minister of Finance."
In addition, the amount of provision for small businesses joining the tender is bolstered from IDR1 billion to IDR2.5 billion.
To hold the tender, the government will make the announcement through one official government portal, so that the process will be transparent and save more money. (Bisnis/dea)

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[Last update: 2010-01-21 03:26:10]