Procurement Methods in Malawi: A Complete Guide
The Malawi Public Procurement and Disposal of Public Assets Act (2003, amended 2025) defines six procurement methods. The method used depends on the contract value, urgency, and nature of the goods or services being procured.
Current data: Of the 170 tenders tracked on TendersMW, 170 use Open Competitive Bidding — the most common method.
Quick Overview
| Method | Threshold (Goods) | Threshold (Works) | When Used |
|---|---|---|---|
| Open Competitive Bidding (OCB) | Above MK 50 million | Above MK 200 million | Default method for high-value contracts |
| Restricted Bidding | Any value | Any value | Specialized goods/services, few qualified suppliers |
| Request for Quotations (RFQ) | Up to MK 50 million | Up to MK 200 million | Routine, off-the-shelf goods and services |
| Single Source | Any value | Any value | Emergencies, sole supplier, standardization |
| Two-Stage Bidding | Above MK 50 million | Above MK 200 million | Complex projects, specs need refinement |
| Framework Agreement | Any value | Any value | Recurring needs, pre-qualified suppliers |
1. Open Competitive Bidding (OCB)
The default procurement method for all contracts above the PPDA thresholds. All registered suppliers can participate. This is the most transparent method and applies to the majority of government tenders.
Key Features
- Public advertisement in newspapers and/or PPDA website (minimum 30 days notice)
- Open to all registered suppliers in the relevant category
- Sealed bids opened publicly at a specified date and time
- Evaluation based on published criteria (technical + financial)
- Results published and losing bidders notified with reasons
PPDA Thresholds (2024 Revision)
- Goods: Above MK 50,000,000 (about $28,000 USD)
- Works: Above MK 200,000,000 (about $112,000 USD)
- Consulting Services: Above MK 30,000,000 (about $17,000 USD)
For Suppliers: OCB gives you the best chance of winning because it's open to everyone. Focus on building a strong track record with smaller RFQ contracts first, then move to OCB tenders.
2. Restricted Bidding
Used when only a limited number of suppliers can provide the required goods, works, or services. The procuring entity invites specific suppliers to bid.
When Used
- Highly specialized goods or services with few qualified suppliers
- Time-sensitive procurement where OCB would cause unreasonable delay
- After an OCB received fewer than 3 responsive bids
- National security or confidential procurement
PPDA Approval
Procuring entities must get PPDA approval to use restricted bidding and justify why OCB is not appropriate. Minimum 3 suppliers must be invited.
3. Request for Quotations (RFQ)
The simplified method for lower-value purchases. Faster and less formal than OCB.
Thresholds
- Goods: Up to MK 50,000,000
- Works: Up to MK 200,000,000
- Services: Up to MK 30,000,000
How It Works
- Procuring entity requests quotes from at least 3 suppliers
- No formal advertisement required (but some entities post on their websites)
- Simplified evaluation — usually lowest price among qualified bidders
- Faster processing (typically 2-4 weeks vs 6-12 weeks for OCB)
Important: RFQs are where most newspaper-only tenders appear. These are rarely posted online, which is why 30-40% of all government tenders are invisible to digital platforms. TendersMW is working to capture these through our data sources.
4. Single Source Procurement
Direct procurement from a single supplier without competition. Heavily regulated and requires PPDA approval.
Allowed Only When
- Only one supplier can provide the goods/services (genuine sole source)
- Emergency procurement where delay would cause danger to life or property
- Standardization with existing equipment (spare parts, extensions)
- Research, experiment, or study purposes
- National security reasons
Watch Out: Single source is the most abused procurement method. PPDA's 2022 audit found significant irregularities in single-source procurements. As a supplier, if you're approached for a single-source contract, ensure proper PPDA authorization exists.
5. Two-Stage Bidding
Used for complex projects where the procuring entity needs to refine specifications based on supplier input.
- Stage 1: Technical proposals only (no pricing). Entity evaluates approaches and may adjust specifications based on submissions.
- Stage 2: Revised specifications issued. Suppliers that passed Stage 1 submit final technical + financial proposals.
Common for: large infrastructure projects, ICT systems, complex consulting assignments.
6. Framework Agreements
Pre-qualified supplier panels for recurring needs. The entity establishes a list of approved suppliers and issues call-off orders as needs arise.
- Valid for up to 3 years (renewable)
- Multiple suppliers can be on the same framework
- Individual orders placed against the framework without re-tendering
- Common for: stationery, fuel, vehicle maintenance, cleaning, security
Strategy: Getting onto a framework agreement gives you repeat business for years. Watch for framework tender notices — they're worth the effort even if the initial contract value seems low.
7. Donor-Funded Procurement
When a project is funded by a donor (World Bank, EU, AfDB, UNDP), the donor's procurement rules may override PPDA rules. Key differences:
- World Bank: Uses International Competitive Bidding (ICB) and National Competitive Bidding (NCB). STEP system for procurement plans.
- EU: Uses PRAG (Practical Guide) procedures. Tenders published on TED (Tenders Electronic Daily).
- AfDB: Similar to World Bank rules. Published on AfDB website.
- UN Agencies: Each agency has its own rules (UNGM for UNDP/UNICEF/WHO).
Payment Advantage: Donor-funded contracts typically pay within 30-60 days vs 3-12 months for government-funded contracts. If cash flow matters, prioritize donor tenders.
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