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