Discussions on Public Procurement

Salam and dear all, The following article, in The Star online at http://thestar.com.my/news/story.asp?file=/2009/10/26/starprobe/4823678&sec=starprobe discusses public procurement. Read the full article, reproduced here... Monday October 26, 2009 Are tenders open and fair? PETALING JAYA: Most people are in the dark over how government tenders at the state or federal levels are carried out. Perhaps this is because until fairly recently, most government jobs were awarded on a direct negotiation basis. While the Government has started to award projects based on a tender system, it is often unclear how this works since the practice is filled with various caveats and regulations deemed to be “politically sensitive”. Furthermore, a browse through the various federal and state websites can be confusing as there is no central Web portal from which everything can be viewed, perhaps due to the fact that the various states in the federal system have their own guidelines. The Public Works Department website’s section on tenders clearly states that agencies must adhere to existing government guidelines including the strategies under the National Development Policy, policies regarding the environment, foreign investment and technology transfer, and insert a bumiputra-first clause as part of the tender and contract. Last November, Prime Minister Datuk Seri Najib Tun Razak affirmed that the Government “will still have the discretion to determine if there will be direct negotiations”. Roof of the Sultan Mizan Stadium in Kuala Lumpur collapses. “Procurement for bumiputra contracts will also be awarded via competitive bidding among bumiputra companies,” he says. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said at a press conference recently that the Federal Government had awarded all big government projects via the open tender system since March last year. It is understood that the threshold for open tenders starts from RM500,000. At the federal level, the Government’s website, www.malaysia.gov.my, has a list of tenders that can be sorted by ministry/agency, tender title as well as start and end dates. Besides the main government website, there is ePerolehan, the Federal Government’s electronic procurement system mainly for expenditures that come under operating expenses such as stationery to maintenance of buildings. The Selangor government website, www.selangor.gov.my, also has a site for tenders but oddly it is embedded in a section entitled “Residents” and subsection of “Services” instead of being immediately visible on a separate section in the homepage where all the main sections are. According to a blogger in a July 29 blog posting in The Star, the government tender system has been in existence since pre-independence days but went through major changes in the days of the New Economic Policy and privatisation. The blogger says that under the old system, procurement by open tender was very transparent. “First, the tender is advertised as widely as possible. The closing date for receiving the tender documents is announced publicly. Normally the opening of the tender box is set about an hour after the closing of the tender box,” the blogger says, adding that anybody could attend the opening of the tender box. “After every document has been opened, a tender list is prepared. The list consists of the names of the tenderers, their tender offers, and other relevant details. All this is done in the open meeting, open to the public. The tender list is open for public viewing, normally posted on the notice board,” the blogger says. Tender evaluation The next step is the tender evaluation. The blogger says this is done by the relevant government departments. “This is followed by the tender board meeting, which decides on the tender, based on the tender evaluation report. This stage is not open to the public. But the decision of the tender board is made public,” the blogger says. The decision of the tender board – which must include the list of tenderers and their offers – is posted on the notice board for public viewing. “If the tender board selects a tenderer who is not at the top of the list, the board must give its explanation, which should go together with its report,” the blogger says. In India, which operates on a federal system not unlike Malaysia’s, there is a website for tenders known as the Indian Government Tenders Information System at http://tenders.gov.in. The website states that it “is the central source for government and public sector procurement, tenders and notifications issued by the central and state governments and other public bodies across India for goods, services and works”. The website has useful information including the latest tenders, open tenders (those that are currently active and for which the last date is near future), tenders by product/service, by agency, by classification (whether buy, sell, auction, work contract or service contract), by location and by value. Most importantly, the website has a section on big awards and details of bid information for tenders published and awarded to successful bidders along with the terms of contract. Neighbouring Singapore has GeBiz (Government Electronic Business), the government’s “one-stop e-procurement portal,” according to information gleaned from the website. The website states that all public sector invitations for quotations and tenders are posted on the portal while suppliers, after registering as a trading partner, can search for government procurement opportunities, download tender documents and submit bids online. Singapore’s Finance Ministry and Spring Singapore or the Standards, Productivity and Innovation Board, an enterprise development agency, also publishes a government procurement guide for small, medium enterprises to help these companies understand government procurement rules. In Australia, the government has AusTender at www.tenders.gov.au, which provides guidelines for procurement of property and services. The site links to information on how to be a supplier of goods and services to the government, besides having information on proposed, current and closed tenders. The Australian government also practises a form of pre-qualification through a “multi-use list” which it publishes through the AusTender site. According to information from the site, it is a list of pre-qualified suppliers of nominated goods and services who have satisfied the conditions for inclusion on the list. However, inclusion, even if insisted on by government agencies, does not guarantee any potential supplier that an agency will include them in a select tender process.