Number of Ministries and Statutory Boards Exercising Option to Extend their Cleaning Contracts

Mr Zainal Sapari asked the Deputy Prime Minister and Minister for Finance to date, how many Ministries and statutory boards have exercised the option to extend their cleaning contracts that are signed before 1 April 2014.

Mr Tharman Shanmugaratnam: In support of efforts to uplift the wages of low-wage workers in the cleaning industry, the public sector took the lead since over a year ago to procure cleaning services only from contractors that pay their workers according to the Progressive Wage Model (PWM). Since 1 April 2013, the Government has made it mandatory that all new public sector cleaning contracts will only be awarded to cleaning contractors accredited with NEA's Enhanced Accreditation Scheme (EAS), and paying their workers according to the PWM. The Government has therefore been supporting efforts to pay cleaners according to the PWM, ahead of the timeline of the new licensing requirements for the cleaning sector that took effect from 1 April this year.

Out of the over 200 public sector cleaning contracts currently in force, more than half were called after 1 April 2013, and hence are fully compliant with PWM requirements. In addition, the Government has also proactively worked with contractors who hold contracts called before 1 April 2013 to obtain accreditation and to pay their workers higher wages according to the PWM. Since July 2013, Government agencies have also been required to ascertain that the incumbent contractor is accredited under the EAS and is paying their workers’ wages according to the PWM, before agreeing to extend an existing contract.

As a result, over 6,200 resident cleaners servicing Government contracts are already being paid according to PWM (this is more than 80% of the resident cleaners servicing Government contracts).

Mr Zainal Sapari asked about the number of agencies that exercised the option to extend their cleaning contracts that were signed before 1 April 2014. Thirty two contracts signed before 1 April 2014, under 18 public agencies, have been extended. Of these, 13 were extended from July 2013 and already pay their cleaners according to PWM. Another 15 will expire this year and the new replacement contracts will also be PWM-compliant. Only four of the extended contracts will end after 1 September 2015, which is the deadline after which even ongoing contracts will be legally required to pay their workers according to the PWM.

In total, there are 15 public sector cleaning contracts (or less than 10% of all Government cleaning contracts) called before 1 April 2013 that will continue beyond 1 September 2015. We recognise that the tender prices for these contracts may have been locked in before compliance with PWM was made a requirement. The Government will be working with contractors to help them transit to the new legislated requirements by 1 September 2015. If necessary, the Government is prepared to accede to requests by existing service providers to terminate the contract, to pave the way for a new tender to be called. This will allow contractors to put in tender prices that take into account the higher wages payable to cleaners under the PWM.