AGO Report FY 2011/12: Govt to tighten rules on tender processes

By Imelda Saad, Channel NewsAsia, 13 Aug 2012

The government will tighten rules on its tender processes. The move comes in the wake of procurement lapses involving several ministries.

The recent purchase of Brompton bicycles by the National Parks Board and graft allegations involving high ranking government officials have highlighted the need to take a closer look at the government's tender processes.

Speaking in Parliament on Monday, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said his ministry will enhance rules on the handling of single bids.

Over the past three years, procurements that attracted single bidders accounted for about two per cent of the total value of contracts awarded each year.

Most of these procurements were quotations of below S$70,000 in value each.

A number of tenders above S$70,000 in value also attracted single bids despite an average tender period of 20 days.

Mr Tharman said there are practical reasons why the government should not prevent contracts from being awarded in such cases.

But he added that approval procedures will be tightened to ensure quotations are kept open long enough and to encourage potential suppliers to take part.

For procurements where only a single bid is received, the Ministry of Finance (MOF) will require officers responsible to provide additional justifications to the approving authority within each agency.

The officers must set out why they consider the single bid competitive or reflective of market prices, before a decision is made to award such a contract.

The minimum tender period for suppliers to submit bids for quotations of government contracts of between S$3,000 and S$70,000 in value will also be extended.

The current period is four days. This will be extended to seven working days.

Another area of review concerns term contracts, which refers to contracts that run for a specific length of time.

Mr Tharman said the auditor-general has observed that some government agencies have been overcharged by vendors for work items that have not been priced upfront in term contracts.

To address this, rules will be tightened such that agencies must ensure that they are charged fair market prices for items that are not priced in term contracts.

However, there are also needs to have a fine balance between fair competition and efficiency.

Mr Tharman said the aim is to preserve fair competition, and to reduce the risk of wrong-doings, but not to pile on rules that will hinder the vast majority of legitimate procurements and reduce public sector efficiency.

In outlining the changes, Mr Tharman stressed that Singapore's system of public sector procurement is "on the whole, in good working order".

Rules, he said are sound and most officers abide by them. But he acknowledged that in a system with 80,000 procurements each year, there will be lapses.

Mr Tharman said most of the procurement-related lapses that have been pointed out by the auditor-general on Monday were not due to a lack of rules. Rather, they were caused by public officers failing to follow existing procurement rules and principles.

So honest officers, diligent supervisors and regular audits are needed.

Mr Tharman said: "MOF has sent a strong message to all permanent secretaries and heads of government agencies emphasising public officers' accountability for the use of public funds.

"The core of a clean and functioning procurement system lies in active oversight and supervision within each ministry and agency. Supervisors and approving authorities must be conscientious in asking questions."

Mr Tharman added that all public officers are aware that there are channels for them to report irregularities in the public service.

He said the government does get feedback which are taken very seriously.

Mr Tharman said: "The government acknowledges problems openly even if it brings embarrassment to any of our agencies. This is how our system must continue to operate so that its integrity is never in doubt. This is also why Singapore is widely recognised internationally as having a clean system of government that works."

He added all effort will be taken to protect the identity of the person reporting such irregularities, to the extent that is feasible and permissible by the law.

Mr Tharman said: "Officials who are negligent are subject to disciplinary proceedings. Where corruption or fraud is suspected, an officer faces the full measure of the law. Everyone knows that, and it deters wrong-doing."

Mr Tharman also responded to a question by Member of Parliament for Pioneer SMC, Cedric Foo, who had asked if competency in procurement procedures is lacking in the civil service.

Mr Foo also asked if it is possible to create a career track primarily for procurement officers to help develop and institutionalise the procurement expertise within the civil service.

Mr Tharman replied: "Yes, competency has been a problem. Part of the problem has been the tendency to delegate procurement to a very junior level which shouldn't be the case, and not adequately supervising process from start to end.

"We're correcting that. By and large, the system is functioning well. The majority of officers and their supervisors are doing a good job but there are more lapses than we think."

Mr Tharman said the current system will be improved and the government is looking into Mr Foo's suggestion to create a career track for procurement officers.

He said: "This (procurement) is an important function in government that is critical to the confidence of the system as a whole and it deserves some specialisation."

There will also be more training and a better checklist for officers to follow when handling tenders.

21 govt bodies found to have lapses in managing public funds
By Dylan Loh, Channel NewsAsia, 13 Aug 2012

21 government bodies in Singapore, including 10 ministries and 11 statutory boards, have been found to have lapses in managing public funds and resources.

This is according to a report by the Auditor-General's Office, which investigated complaints on such matters for the financial year 2011 to 2012.

The report, spread over 100-odd pages, said improvements can be made in several areas.

Among the findings, the Manpower Ministry was found to have inadequate scrutiny when it came to awarding a tender to buy office chairs where each ergonomic chair costs the ministry S$575.

The report said cost-effectiveness was not shown in the awarding of the tender for the chairs.

The National Parks Board was found to have lapses in development projects, where nine tenders with a total value of about S$70 million, were granted by the wrong approving authority.

The Auditor-General said what needs to be improved are internal controls, payment administration, contract management for work or services, and approving officers' scrutiny.

Associate professor Ho Yew Kee, from National University of Singapore's Business School, said: "Approving officer is a very important gatekeeper. In fact, his task is to ensure the whole procurement process is done properly because he ultimately signs off. 

"So in that sense the approving officer must never be just a rubber stamper. Right, if he does that then actually we're just going through the motion and he doesn't add any value in gate-keeping the whole procurement process."

The National Population and Talent Division fell short when it allowed a tenderer to make price alterations, after the tender closed, for the staging of an overseas event in the first half of this year.

The Auditor-General said procurement officers should be well acquainted with principles of fairness, transparency, competition and value for money.

Chairman of Public Accounts Committee, Mr Cedric Foo, said: "Many of the management members as well as tender board members of stat boards and ministries are well trained in terms of procurement principles. But at times, these members may be renewed, there may be new members who join a board of a stat board and may be appointed as tender board members. I think it will be very beneficial to these new members if they can receive robust training on what to look out for and also what kind of questions to ask."

The Auditor-General also emphasised the need for meticulous documentation in procurements.

Prompt action will be taken when irregularities crop up: DPM Tharman

By Tessa Wong, The Straits Times, 13 Aug 2012

THE Government is not satisfied with the state of its procurement processes and is working to improve them through constant fine-tuning of rules, training of officers and prompt action when there are irregularities, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.

The Government knows it needs to stay alert on all fronts so as to keep confidence in the ways public funds are used, he added.

Mr Tharman, who is also Finance Minister, will answer questions in Parliament today on Government tenders and procurement processes.

The questions concern a corruption probe into a recent purchase of Brompton folding bicycles by the National Parks Board. The probe comes in the wake of other graft scandals, some involving high-level public officers.

Yesterday, Mr Tharman promised that rules on procurement would be tightened.

"Are we satisfied with the state of procurement? No, we are not satisfied. We want to see how we can improve it. That means constant review of the rules and guidelines. Some tightening is going to be necessary," he said.

But the most important element was ensuring compliance with the rules, he added.

Hence, there is a need to build up the competence of procurement officers through training.

Independent audits are also "absolutely critical", and from time to time when irregularities crop up, "what's most important is we keep this system where we take action promptly", he said.

This would include disciplinary action when officers do something wrong, and sometimes even taking it to the courts when there is an offence under the law.

"So on all fronts, we got to stay alert. Keep confidence in the public sector, keep confidence in the way we are using our funds," he said.

That would mean keeping an eye not just on large-value tenders where the checks are very stringent, "but also the smaller value quotations. The small transactions have got to be on the radar screen as well".

Mr Tharman, an MP for Jurong GRC, was speaking on the sidelines of the official opening of an ice rink at JCube, a shopping centre in Jurong.

The ice rink is the first to be opened under the Community/ Sports Facilities Scheme, which sees sports facilities integrated in commercial developments like malls.

Mr Tharman was also asked about former prime minister Lee Kuan Yew's call on Saturday for Singaporeans to marry and have babies.

He said low fertility is a very serious concern of the Government, which has embarked on a review of related policies.

He stressed the importance of making family life enjoyable.

"Making family life as enjoyable as possible is part of it. Everything we do, even the sports facilities here in Jurong, close to residences, something that's really fun for the family," he said.

"Singapore has got to be a great place to raise a family."