SINGAPORE - With as much as S$10 billion in public
contracts awarded each year, a question has been cropping up often
of late: Is the process as robust and as fair as it can
be?
Such increased scrutiny of the Government's
procurement process has been stirred most recently by the National
Parks Board's (NPark) purchase of 26 foldable Brompton bicycles via
online tender. But concerns have also been fleetingly raised in
other scandals, involving fraud and sex-for-contracts over the last
two years.
While they feel the current policies are generally
sound, civil servants, businesses and academics pointed out to
TODAY some areas that need tweaks.
NET NOT CAST WIDE ENOUGH?
All government ministries, statutory boards and public agencies
here make the majority of their purchases of goods and services
through the Government Electronic Business (GeBIZ) online
portal.
Only the roughly 55,000 businesses which have registered as trading
partners can view the details of and bid for business opportunities
put up by the 144 government bodies.
Is the Government casting its net wide enough to get
value-for-money deals? One civil servant pointed out: "There might
be some out there who are not registered as trading partners, but
may be able to offer a better deal."
But corporate governance experts said GeBIZ, as a mode of inviting
bids, is "the most transparent, open and efficient".
National University of Singapore (NUS) accounting don Ho Yew Kee
said returning to the days of publicising tender notices through
newspaper ads - buying ads in all newspapers for several days - is
not only costly but also leads to the same "no-win conclusions" on
companies' grouses that trawling through GeBIZ daily is a tedious
process.
"How many days of ads would be considered as sufficient and fair?"
he asked. "Traditionally, it's the hunter that looks for the prey;
it should be the same in business - the seller has to look for the
buyer."
Still, should not concessions be made when it comes to contracts
for goods that are "not typical" - items that public agencies
rarely or have never before sourced for?
It would be reasonable, one point of view goes, for the agency to
directly alert potential suppliers via email, letter or phone call.
In the NParks case, other suppliers of Brompton bikes here said
they were not informed of the call for tenders.
MORE INCENTIVE TO SIGN UP
On why he believes the GeBIZ registration system works nonetheless,
Associate Professor Mak Yuen Teen from NUS said the prerequisites -
such as a company's assets and revenue - weed out "just any Tom,
Dick or Harry from bidding for jobs".
"You have to think of the rules involved, such as whether a
supplier is capable of delivering or how reliable he is, because we
are talking about public money," he said.
Still, GeBIZ could be made more intuitive and user-friendly to
attract more bona fide suppliers. "Having more players completes
the market because, then, no one seller can easily capture the
market," said Assoc Prof Ho.
He suggested making the registration process less tedious and
lowering the S$320 yearly fee a company has to pay for each
additional account it wants to sign up. The email-alert service for
relevant business opportunities, which companies can opt in for,
can also be improved, added Assoc Prof Mak, as some have bemoaned
the filter's adequacy.
SKEWING THE PROCESS BEFORE IT STARTS?
Preventing personal or working relationships from tainting
procurement procedures is perhaps the most basic safeguard needed
in any model.
But companies that have bid for public contracts point out that
when government bodies "don't even know what exactly they want" - a
product or system new to the market, or a complex and lengthy
project they haven't handled before - potential vendors are
gathered for "closed-door request-for-proposal" sessions to
formulate the specifications.
Such "market-testing" could lead to the Government not getting the
most bang for its buck, as one company remarks: "Why would I want
to put my best ideas out there when there's no guarantee that I
would get the contract?"
Or, it could skew the tender process. A company can "feed its
unique selling points" to the public agency, such that the tender
specifications eventually put out are so close to what that company
can offer, that this "makes its chances of winning higher", said
another senior executive who has won consulting contracts with some
public agencies.
(In the NParks case, for instance, eyebrows were raised when the
tender specifications for the foldable bikes were so specific as to
limit the available choices. The NParks officer in charge of the
purchase and the winner of the S$57,200 deal - the only bidder -
are also friends on Facebook. A probe is under way.)
A civil servant acknowledged that "informal negotiations" are
carried out with "regular vendors" on some occasions, even before a
contract is put up for bids.
CHECK AND BALANCE
Assoc Prof Mak noted that "safeguards should come in before the
tender is called". For example, detailed evaluation criteria - the
weightage given to price, quality, efficiency, for instance -
should be set for each potential purchase in advance, he
suggested.
Those preparing tender specifications should be different from
those reviewing them before posting on GeBIZ, so as to prevent
collusion, said a civil servant.
Perhaps external consultants who cannot bid for the contract should
be roped in to help the public agency craft tender specifications
for products it has limited knowledge about, suggested Assoc Prof
Ho.
However, an obsession with criteria can verge on the absurd. One
civil servant recounted having to purchase durians for a function,
under rules requiring that tender specifications be detailed and
measurable: "How do you define or measure how sweet the durians
are, or how big they have to be?"
SHOULD MINIMUM BAR BE SET?
Although the Government's procurement rules do not mandate a
minimum number of quotes before a contract can be awarded, Assoc
Prof Mak said this should not be a "hard and fast" practice.
Agreeing, Assoc Prof Ho said: "If there's only one bid, one must
ask if it's so specialised that very few vendors can take part;
whether the deadline is so short that vendors do not have enough
time to put in a bid; and whether other vendors were
contacted."
A civil servant noted that the current rules can make some
procurement officers "lazy". If there is just one bid, and the
officer wants to cancel that tender and call for a fresh round, "he
has to put up several papers to justify it, to ensure there is no
abuse of the system".
If he does not cancel the tender, however, he is only required to
prove that the single bid "is indeed a fair price" - but what is
fair "is debatable", she said.
Some, including a TODAY letter writer, have suggested that for
contracts above a certain amount, the grounds for award should be
published. But Assoc Prof Ho pointed out: "I can say anything I
want, for example, that his quality is better than the rest."
Also, those who lose the contract may not want commercially
sensitive details of their bid to be published.
BOX-TICKING EXERCISE
Finally, some required service or product may be so very
specialised, that forcing the purchase to go through GeBiz would
just be "going through the motions", said Assoc Prof Mak.
When the subject is one with - for example - national security
sensitivities, a public tender would also present a
conundrum.
In cases where there is "strong justification", it may be "better
to go through a separate 'paper-based' process with the requisite
checks and balances", Assoc Prof Mak said. "If everything has to go
through GeBiz even though it does not make sense, it can become a
box-ticking exercise. Worse, people will play games around it."
- TODAY