Government Tenders

Mr Baey Yam Keng asked the Deputy Prime Minister and Minister for Finance how Government procurement guidelines ensure that neither local nor foreign suppliers are favoured during invitation, assessment and award of tenders.

The Minister of State for Finance (Mrs Josephine Teo) (for the Deputy Prime Minister and Minister for Finance): Mr Speaker, Singapore is a signatory to the World Trade Organization's Agreement on Government Procurement or GPA. Our obligations both under the GPA and our Free Trade Agreements require that local and foreign suppliers be given equal opportunity to participate in Government tenders. The Government's procurement rules are aligned with Singapore's international obligations. All Ministries, Organs of State and Statutory Boards are required to adhere to them.

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The Government's procurement rules also require that every tender be assessed fairly and awarded to the proposal that meets the tender requirements and gives the best value-for-money, based on both price and non-price considerations. There should be no discrimination in favour of or against foreign suppliers.

Mr Baey Yam Keng (Tampines): Thank you, Mr Speaker. I thank the Minister of State for the reply. I would like to ask the Minister of State how would the Government procurement guidelines provide a level playing field for all types of businesses, whether foreign or local, and among the local companies, SMEs versus Government-linked companies. And how does the Government assess or allow tenders by smaller enterprises which may not have the strong financial background but have the requisite track records and capabilities?

Mrs Josephine Teo: Mr Speaker, the Government's procurement regime is an open one that places emphasis on fairness, transparency and value-for-money. It is also important to note that, wherever possible, Ministry of Finance encourages the use of outcome-based specifications in Government tenders. This allows bidders to put in their best proposals regardless of their own size or track record. The other aspect that is important is that bids are evaluated holistically based on their abilities to meet the requirements and objectives of the tender. For example, the total life-cycle cost is considered instead of just price alone. Award of contracts is on the basis of the best value-for-money offer. Specifically, to address Mr Baey's concern of whether the playing field is level for companies that are smaller in size, I am pleased to share with him that if we looked at the tenders that the Government has awarded, about 20% of them go to businesses with net tangible assets of less than $250,000. These would typically be small and medium enterprises. If we were to consider the contracts where the tender value is $100,000 or below, two in three of those contracts typically go to the small and medium enterprises with net tangible assets of $250,000 or lower. The evidence does suggest that our procurement regime is supportive of a whole range of enterprises, regardless of their size.

We also recognise that there may be occasions where the tender value is quite large. Smaller suppliers may need to enter into joint collaborations or consortia in order to compete for those projects fairly. The way to deal with that is to share pertinent information on public sector pipeline projects in advance, so that the suppliers have better visibility and to team up with potential partners. For example, IDA in their annual briefing to the infocomm industry will let suppliers know in advance of the kind of projects that they are looking to put out for businesses to tender for.

In addition, the Government also pushes alerts on business opportunities to suppliers via the GeBIZ system. There is one component called "Really Simple Syndication" (RSS). This is specifically designed to allow even smaller enterprises to access opportunities. When projects are published on RSS, email alerts on SPRING's Enterprise One Portal, which links to SMEs' database, are also made available. That is what we have been doing.

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Mr Seah Kian Peng (Marine Parade): Mr Speaker, I would like to ask the Minister of State whether these same guidelines apply to statutory boards and Government-owned companies where Government owns a significant shareholding. I ask this because not so long ago, I read in the newspapers that Changi Airport Group in the design of the new Terminal 4, that local architect firms were excluded, and that caused a ruckus within their industry. I know there was a subsequent clarification but I wanted to hear the Ministry's response to this and, specifically, whether these guidelines also apply to statutory boards and Government-owned companies.

Mrs Josephine Teo: Mr Speaker, I thank Mr Seah for his question. These guidelines apply to all Ministries, statutory boards and Organs of State. As for companies, they operate on commercial principles and it is up to them to decide on what basis their procurement is best proceeded with. In the case of the Changi Airport Group, I think they have made a very clear statement that where Terminal 4 is concerned, all local as well as foreign architects are welcome to participate. I think there is no need for us to speculate further. They have made their intentions very clear and in actual fact, in terms of implementation, all architects have been invited to submit their proposals.

Mr Speaker: Mr Baey Yam Keng, last question.

Mr Baey Yam Keng: Sir, the Minister of State has made mention to tenders above certain value and the requirements on asset size and paid-up capital. Can I check what is the tender value that Government agencies use as a benchmark, beyond which they would require such financial status?

Mrs Josephine Teo: Mr Speaker, I should just clarify. I did not say that there were any specific requirements. At the end of the day, Government looks at the criteria holistically and, depending on which supplier is best able to provide the value for money, as well as to meet the requirements of the tender, they will be considered.