Public accounts watchdog concerned over continuing procurement lapses

Public bodies rapped over lack of diligence in tenders

By Robin Chan, The Straits Times, 2 Apr 2014

THE way some public sector organisations conduct their tender exercises is worrying, said Parliament's public accounts watchdog.

They are still not diligent enough in ensuring that tender rules are followed, despite recent government efforts to tighten the procurement rules, the committee of MPs said in its annual report released yesterday.

About one-third, or 12, of the 35 issues questioned in the latest 2012/13 Auditor-General Report "pertained to laxity in the area of procurement".

The lapses include waiving competition based on weak grounds, letting certain bidders alter their bids after the tender has closed, and not disclosing the evaluation criteria upfront in tender documents.

Other mistakes involve failing to evaluate tenders properly and getting approvals retrospectively, said the Public Accounts Committee, which is made up of eight MPs who scrutinise how public funds are spent.

It had asked for written explanations from five ministries and the National Research Foundation (NRF), which comes under the Prime Minister's Office (PMO).

The five are: the Ministry of Culture, Community and Youth; Ministry of Education; Ministry of the Environment and Water Resources; Ministry of Foreign Affairs; and Ministry of Home Affairs.

The lapses boil down mainly to not following the rules. And the ministries' explanations put the blame on human error, not the absence of rules and procedures, the report noted.

Hence, it said: "The committee was concerned that even with efforts over the last few years to enhance procurement rules and procedures across the public sector, there were indications that some public sector entities were not sufficiently diligent in ensuring compliance with procurement rules."

It also stressed the importance of cultivating the "right values, attitudes, skills and expertise to prevent lapses and fraud" and for the right tone to be set "at the top".

One lapse was in the construction of the Campus for Research Excellence and Technological Enterprise by the NRF, at the National University of Singapore's University Town. The contract was worth $322.97 million.

The report said the project breached many procurement rules and principles.

These were blamed on a lack of staff strength and capabilities for managing a major construction project.

The contract with the project management company was terminated, said the PMO.

The officers involved in the project had also left NRF, except for one, who was counselled.

The NRF has also taken measures to prevent such a situation from arising again.

Public procurement policies and rules are decided by the Ministry of Finance.

In 2011, it set up a Centre for Public Project Management to give project management guidance to agencies, especially those that do not have in-house capabilities.

Last year, it said it will build a pool of procurement specialists with a career track to raise expertise.

Meanwhile, it requires permanent secretaries and heads of agencies to report yearly on key findings of their procurement audits and the follow-up action.

The ministry is also working with the Public Service Division - the human resource arm of the civil service - on ways it can give public sector agencies more guidance on how to investigate lapses and take the appropriate disciplinary action.

The chairman of the committee of MPs, Mr Cedric Foo, who is an MP in Pioneer GRC, told The Straits Times that all public officers need to be committed to good procurement practices.

Also, they should be rewarded for good practices, not just disciplined for flouting the rules. This approach would improve accountability, he added.

More resources and expertise should be given to government bodies as well.

"We are some way off," he said. "Ultimately, what we want is to have this culture (of good procurement practices) embedded as part of the DNA."

Some of the concerns

- Islamic Religious Council of Singapore (Muis): Lapses in tender evaluation for construction work (for four tenders totalling $17.38 million, seven of the eight evaluation criteria were not made known to potential bidders for the tenders).

No disciplinary action was taken, as an independent panel found no staff wrongdoing or wilful neglect.

- Ministry of Foreign Affairs: An overseas mission did not comply with guidelines for security (contract value of $427,886 for two years) and gardening services (totalling $172,982 for four years).

The ministry said the mission has since obtained three quotations for the new contract from April last year to March this year, and has implemented measures to address the procurement issues.

- National Research Foundation (NRF): Many procurement rule breaches in construction of the Campus for Research Excellence and Technological Enterprise (total contract value $322.97 million).

These included not disclosing the scoring method for evaluating tenders.

The Prime Minister's Office said NRF lacked the staff strength and capabilities to manage a major construction project as it was a new start-up organisation.

The project management company has been terminated and the officers involved in the project have left NRF except for one who has been counselled.

NRF has briefed in-house consultants on government guidelines, and required staff to attend courses, among other measures taken.