Why did Member of Parliament (MP) Lee Bee Wah, in her capacity as chairman of the Construction Industry Joint Committee, write in to the press in support of someone who disagreed with the Auditor General (AG) for pointing out how the Ministry of Education (MOE) wasted as much as $15 million by rejecting the lowest bids for school cleaning contracts in 2006?
She started off by admitting she did not have full details of the rejections, even though the AG’s report is available to the public, and on the internet. For the record, MOE claimed the lowest bids were not realistic, but the AG noted the bids were only 5 to 9% below the market norm. Also, four of the rejected were past contractors whose services the ministry had previously contracted with and found to be satisfactory. Since cleaning of the school premises is not exactly rocket science, the rejections must be attributable to some personal factor or influence.
Lee talked about abnormally low tenders (ALTs) that supposedly had adverse results, leading to substandard works, and ending up with poor value for money. Thus her rationale for choosing a quality-and-price method for evaluating public tender bids.
Bullocks. The lowest bid tendering approach has been a working model for years, in Singapore and our neighboring countries, in private as well as public sectors. Besides securing the most competitive prices for procurers, the system is a deterent against corruption and cronyism. A well prepared specification for a tender document will price in tangible and intangible aspects of a project. Besides the technical and measurable scopes of supply (physical dimensions, quantities, equipment and material specifications, delivery dates, etc), heuristic quality aspects are also priced in e.g. health, safety and environment impact. If a contractor plans to erect a plant without treatment facilities for its toxic waste discharge, his cost savings will be captured in a properly written project specification. The tendering process will then price in the non-conformance, and penalise the bidder with a hefty price adder. Quality issues, no matter how exotic or esoteric, are quantifiable in dollar terms.
However, if the chairman of the Construction Industry Joint Committee were to reject a bidder on the grounds of lack of “professionalism, integrity and respect from players”, then all bets are off. Especially table tennis bats. We are told that “since end 2004, the Building and Construction Authority has advocated quality and price as the basis for selecting consultants and builders in public sector projects.” Perhaps the next AG report should pay special attention to this sector.
July 21, 2009 at 11:20 am |
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July 22, 2009 at 1:32 am |
MOE’s dubious tender selection process notwithstanding, are you not aware that the govt no longer requires tender approving authorities to select the lowest-priced bidder?
Having very clear requirements will no doubt result in bid prices with less variance, but quality is something that is very difficult to put down in paper and equally difficult to track post-tender.
The current practice is to shortlist a handful of the best qualifying tenders after considering price and quality, conduct a round of interviews to seek clarification, then use a pre-defined scoring mechanism to rank the submissions.
The winning tender can be any one among the top few, but in light of MOE’s tender, it is quite difficult to understand how they could even justify dropping the lowest 11 en-bloc. Must have been fuzzy-logic.