The Finance Ministry is poised either to disqualify bidders who fail to win auctions and file unjustified appeals from taking part in other state procurement bidding or to demand compensation for project delays.
About 1,000 cases of losing bidders making appeals have been a drag on state budget disbursement, said Finance Minister Apisak Tantivorawong.
Some losing bidders have exploited the Government Procurement and Supplies Management Act by filing unjustified appeals, causing the postponement of some government investment projects for up to two months, he said.
The law, effective since August 2017, stipulates that losing bidders can file an appeal within seven days after the auction is completed. In the event that there is appeal, the issue will be considered within 45 days with two extension periods: seven days and an additional five days.
Mr Apisak said that some ill-intended bidders have used appeals to block the budget disbursement process. He has instructed the Comptroller-General's Department to consider issuing an organic law to punish those who file appeals without good reason.
The appeals have resulted in investment budget disbursement falling 30% short of target, though the disbursed budget is higher than in the same period last year, the minister said.
Investment budget disbursement remains stuck in the slow lane, with 47% taken out for the nine months to June.
State agencies doled out 2.11 trillion baht, representing 72.9% of annual budget expenditure, for the October-June period, or 1.42 percentage points below target.
Of the total 2.11 trillion baht, 1.84 trillion was from the regular budget and the remaining 270 billion was from the investment budget.
Public investment has been one of the driving forces of the economy in the past few years.
The government has a budget expenditure target for fiscal 2018 of 2.9 trillion baht, of which 577 billion is earmarked for investment. The aim is for 96% of the annual budget and 87% of the investment budget to be drawn down this fiscal year.
The head of the Comptroller-General's Department, Suttirat Rattanachot, said in June that state agencies were expected to draw down just 70% of this fiscal year's investment budget, well below the target of 87%.
In related news, Mr Apisak said 17 universities have asked permission not to apply the Government Procurement and Supplies Management Act to their procurement process.
The current law lets state enterprises and agencies set their own procurement regulations to help sharpen their competitive edge or give them flexibility, but the regulations must be in accordance with state procurement management principles.