20 Construction Companies Blacklisted for Public Procurement Negligence
19th January 2026, Kathmandu
The Government of Nepal has taken firm action against contractors and suppliers found to be negligent in public procurement processes. A total of 20 construction companies and suppliers have been officially blacklisted for failing to comply with contractual obligations and violating procurement conditions, according to the Public Procurement Monitoring Office (PPMO). This decision, finalized in mid-January 2026, serves as a stern warning to the domestic construction industry about the consequences of project delays and substandard performance.
20 Construction Companies Blacklisted
The blacklisting decision was made following recommendations from various government bodies, including the Department of Roads, Nepal Telecom, and several local municipalities. After reviewing the specific cases, the PPMO concluded that these 20 firms demonstrated a consistent failure to meet contractual requirements. The office, which operates under the Office of the Prime Minister and Council of Ministers, has the authority to regulate all public procurement activities to ensure the efficient use of state resources.
Legal Basis for Regulatory Action
According to the PPMO, the blacklisting was carried out in full compliance with Section 63 of the Public Procurement Act, 2007 (2063 BS). This specific section empowers the government to bar contractors who engage in misconduct, breach of contract, or provide false information during the bidding process.
The legal proceedings ensured that all firms were given a fair opportunity to provide explanations for their delays or failures. However, the evidence provided by the monitoring agencies indicated significant lapses in project execution, leading to the enforcement of penalties under the Act.
Duration of the Ban and Major Companies Affected
The duration of the ban varies depending on the severity of the violation, ranging from one year to three years. During this period, these companies are strictly prohibited from participating in any public procurement activities, including government tenders, supply agreements, and joint ventures across all public institutions.
Among the 20 companies penalized in the most recent cycle, several have received the maximum three-year ban for what the PPMO termed “critical negligence.” Some of the notable firms and joint ventures included in recent blacklisting cycles are:
S.S Construction: Banned for three years following multiple project failures.
M/S Inspur Software Group Co. Ltd. (China): Blacklisted for three years for failing to fulfill technical supply contracts.
Bikash Nirman Sewa: Barred for three years for stalling major road projects in the Lahan division.
Dilip Construction and New DP Nirman Sewa: Banned for one to two years for delays in local infrastructure development.
Impact on National Infrastructure Projects
Negligence in public procurement often results in project delays, cost overruns, and substandard work, which ultimately places a financial burden on the state and taxpayers. The blacklisting of these 20 entities is a move to stop the cycle of “sick contracts” that plague Nepal’s infrastructure sector.
The ban applies universally across all public entities, including:
Central ministries and departments.
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Local governments (Municipalities and Rural Municipalities).
Public enterprises and state-funded boards.
Security agencies and educational institutions.
By barring these firms, the government aims to create space for more responsible and capable contractors, thereby improving the quality and timely completion of national projects like the East-West Highway expansion and urban drinking water systems.
Message to the Construction and Supply Sector
The decision sends a clear signal to the construction sector that the era of impunity for stalled projects is ending. Government officials have reiterated that firms participating in public procurement are expected to uphold the highest technical standards and adhere strictly to agreed timelines.
The PPMO has stated that it is developing a more robust automated tracking system to identify underperforming contractors in real-time. This will allow for swifter action under Section 63, preventing negligent firms from winning new bids while their existing projects remain incomplete.
Importance of Compliance for Contractors
Contractors engaged in public works are advised to ensure strict compliance with procurement laws and performance standards. Blacklisting can be a death knell for a company’s growth, as government contracts form a substantial portion of the construction and supply market in Nepal.
To avoid such penalties, firms are encouraged to:
Maintain Realistic Bidding: Avoid underbidding that leads to financial inability to complete the work.
Prioritize Quality: Adhere strictly to the technical specifications outlined in the contract.
Ensure Timely Reporting: Communicate early with the PPMO or the respective department if genuine obstacles arise.
Conclusion
The blacklisting of 20 construction companies and suppliers marks a decisive step by the Government of Nepal to reinforce integrity and accountability in public procurement. By invoking the provisions of the Public Procurement Act, the authorities are protecting public resources and ensuring that taxpayer money results in high-quality infrastructure. This action serves as a vital warning to all firms involved in government contracts: uphold your professional obligations or face exclusion from the market.
For More: 20 Construction Companies Blacklisted
