GOVERNMENT PROCUREMENT BILL

Order for Second Reading read.

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Government Procurement Bill seeks to legislate the basic framework for Singapore's implementation of the 1994 Agreement on Government Procurement ("GPA" in short) negotiated under the auspices of the World Trade Organisation or WTO. The Bill sets out the scope of Singapore's Government procurement covered by the GPA and the regulations governing the receipt, process and disposal of any complaint or "bid challenge" by suppliers of any alleged non-compliance with the GPA requirements by Government Ministries, Departments, Organs of State and Statutory Boards.

Background to the GPA

The GPA took effect on 1st January 1996. It is an international framework designed to make government procurement more transparent, and to ensure that Government do not protect domestic products and suppliers, nor discriminate against foreign products and suppliers. The GPA requires that signatory members shall not discriminate against the products, services and suppliers of another member.

There are currently 25 GPA members, including the United States of America, Canada, United Kingdom, Israel, Japan, Korea, Hong Kong and most of the European Union countries. It is thus beneficial for Singapore to accede to the GPA. It is also a re-affirmation of Singapore's open and transparent Government and our commitment to the open multi-lateral trading system. Singapore's application to join the GPA was approved by the WTO on 20th September 1996.

The predecessor of GPA is the Tokyo Round Government Procurement Code, which came into effect on 1st January 1981. It covered the procurement of goods at the central government level. Singapore is a signatory to the Tokyo Round Government Procurement Code. The GPA goes beyond the Tokyo Round Government Procurement Code by offering services, including construction; procurement by sub-central government, ie, states, provinces and prefectures; as well as procurement by government-related or linked entities.

The GPA will cover procurement of goods and services by our Ministries and Organs of State and 25 statutory boards.

Singapore's Government procurement system

Singapore has always practised an open and competitive system of Government procurement. The three principles underpinning Singapore's public procurement policies are :

(a) Open, fair, competitive and transparent rules and procedures. The processes and procedures of submitting tenders for Government projects are well publicised and adhered to strictly;

(b) Honesty and integrity in the evaluation of tenders and quotations; and

(c) Value for money based on overall cost-effectiveness and efficiency. This ensures that we stretch the tax-dollar and keep the cost of Government low.

These principles have stood us in good stead over the years and have earned us a high reputation amongst both local and international suppliers and contractors. The private sector knows that it cannot win Government projects through connections or under-the-table methods. As they know that the Government will be rational in its evaluation of tenders, many have also proposed better and more cost-effective alternatives, hence helping us to operate more efficiently.

Over the years, we have improved the system to make it more efficient and effective. For example, we now post tenders and award information on the Internet under the Government Internet Tendering Information System (GITIS). Any supplier from any part of the globe can access easily and cheaply collated information on tenders called by the Government Ministries, Departments and Statutory Boards.

The GPA requirements are congruous with our procurement principles. We have no fundamental problems adhering to the GPA requirements. Some administrative changes are however necessary. For example, GPA imposes a minimum tendering period of 40 days, longer than our present minimum of 21 days; and a bid-challenge system has to be instituted.

Provisions of the Bill

I shall now bring Members through the salient provisions of the Bill.

(a) First, the Bill provides for the identification of the procurement entities and types of procurement to be subjected to the GPA, the method of valuing each procurement to determine if it is within the GPA threshold value, and types of procurement that could be excluded, as provided for by the GPA, such as those on grounds of national security, defence, public morals, order or safety, human, animal or plant life or health or intellectual property, or products or services of handicapped persons and of philanthropic institutions;

(b) Secondly, the Bill specifies the procurement procedures in respect of:

(1) the technical specifications to be included in tender documents;

(2) the procedures for the qualification of suppliers;

(3) the procedures for the award of a procurement contract; and

(4) the collation and provision of information on procurement activities of entities covered under the GPA.

Finally, the Bill sets out the provisions for the bid challenge system. This is required under the GPA to provide an avenue through which aggrieved suppliers can lodge complaints over alleged non-compliance with the GPA requirements, and seek compensation. This is to be implemented through the establishment of a Government Procurement Adjudication Tribunal. Its members will comprise a Commissioner and a number of Deputy Commissioners. The hearing of the challenge will be done either by the Commissioner or a Deputy Commissioner. Procedures and rules governing the lodging and hearing of the challenges, consistent with the GPA requirements, have been included. Powers of the Tribunal such as those relating to the proceedings, costs and damages to be awarded and suspension of procurement are spelt out in the Bill.

Conclusion

The public sector in Singapore has, over the years, built up high standards of integrity, honesty and efficiency in public procurement. The Government Procurement Bill will bring some aspects of our public procurement policies and procedures in line with other GPA signatories. This will help Singapore companies in supplying goods and services to the government agencies of GPA members. At the same time, it re-affirms our commitment to our own high standards of public procurement and our commitment to the open global multi-lateral trading system.

Sir, I beg to move.

Question proposed.

Mr Shriniwas Rai (Nominated Member): Mr Speaker, Sir, thank you for letting me speak on the Bill.

The introduction of the Bill shows the Singapore Government's support for international relations as well as multi-lateral trade. It is gratifying that this Bill has provision for mediation, which is a feature of our judicial system. This will help in resolving disputes. However, Sir, I am a little disturbed as clause 7(3) takes away the power of the Court, but it is reassuring that clause 8 has provision for the setting up of a Tribunal. Sir, may I first read clause 7(3)?

"A breach of a duty referred to in subsection (1) shall not be the subject of any proceedings in any court but may be the subject of a challenge brought before the Tribunal by a supplier to whom the duty is owed and who has suffered, or reasonably risks suffering, loss or damage as a result of the breach."

Sir, while it is reassuring that the Tribunal would look after the interest of the aggrieved supplier, it is a little disturbing that in the UK a High Court Judge hears the dispute, but in Singapore the Tribunal is to be headed by a layman. To give assurance to the public at large, may I urge the Minister to consider a provision which we have in other statutes as well, such as the Maintenance of Parents Tribunal or Strata Titles Board. It has been the practice in this country to have a legally-qualified man, and if he is not happy that he should have the same qualification as a High Court Judge, may I urge him to consider a person who is legally qualified. There is no shortage of talents in Singapore and there are many lawyers who have more than 10 years of standing.

Sir, the Tribunal would have to deal with disputes and lawyers would have the right of audience, and questions of evidence and procedures have to be looked at. I would urge the House to consider the position of having a legally-qualified person to head the Tribunal. I am happy with the provision that there is a Commissioner and a number of Deputy Commissioners. There are two ways of going about it. Either we have a legally-qualified person or we could have a panel of three, of whom one must be the chair person, ie, the Commissioner or the Deputy Commissioner, who must be legally-qualified. I leave it to the Minister's discretion. But as the Tribunal has the same immunity as that of the High Court, perhaps the Minister may consider having a person who is qualified under the Constitution to be a High Court Judge to be a Commissioner or Deputy Commissioner.

Sir, I am mindful of the fact that we should not clog up our court but in order to give confidence to the business community and the public, it would be in the interest of the trade to have a person who is legally-qualified. I would urge the Minister to reconsider this because all we have got under clause 8(4) is:

"No person shall be appointed or shall continue to hold office as Commissioner or Deputy Commissioner if he -

(a) is of unsound mind;

(b) is an undischarged bankrupt or has made any arrangement or composition with his creditors; or

(c) is convicted of an offence involving dishonesty, fraud or moral turpitude or has not received a free pardon."

These are rather prohibitive qualifications. What we require are some positive qualifications to show that the person who is heading is a person who is capable of discharging his duties.

Mr Chiam See Tong: Sir, I just want to seek a clarification from the Minister. If this Bill comes about, if we accede to the Agreement on Government Procurement made at Marrakesh on 15th April 1994, what advantage do we have by implementing this Bill to keep in line with the provisions of this Agreement on Government Procurement that is internationally recognised? What are the advantages to us? Is it not our Government itself, without joining this international body agreement, able to maintain a high standard of procurement?

Dr Richard Hu Tsu Tau: To answer the NMP's question first, I take the point about the Member's concern over the possibility that non-legally qualified people may be appointed to become Commissioner and Deputy Commissioners. But our proposal really is to provide flexibility so that persons who do not meet the qualifications of High Court Judges can also be appointed to be Commissioner, in order to widen the scope of people who can be appointed. There are many cases where very experienced people who know the Government procurement procedures will probably act and serve better than a legally qualified person. We are talking here about a very specific and narrow field of legal interpretation. Therefore, we will certainly take his point into account in the appointment of suitably qualified people, preferably with the legal qualifications which he has mentioned.

As I have said, many people who would eminently fulfil the role of Commissioner may not start off their careers as lawyers. And we do not want to miss out the possibility of using these people to act as Commissioner or Deputy Commissioners. It is quite clear that the pool of candidates in Singapore for the Bench is very limited and to impose further demands on them, I think, would be probably not wise, and it may be difficult to fill these several positions if we had to confine ourselves to those with the legal qualifications alone. Unlike High Court Judges whose cases span a very wide spectrum, the Tribunal Commissioner and Deputy Commissioner relate to Government procurement only. Therefore, I think the flexibility we are asking for under this Bill is really our objective. But the points he has raised are well taken and we will consider them.

On the question by Mr Chiam, I agree that our present procurement procedures are more than adequate. In fact, in many cases, it probably exceeds the GPA requirements. But it is good for us to join an international arrangement of this sort, not only because it suggests that we have nothing to hide but the other advantage, of course, is when our suppliers of goods and services go to other countries to tender for Government projects, they would be more acceptable to the host countries if they know we in Singapore also accede to the GPA requirements. So there is an advantage clearly in joining, even though it may be marginal in our case.

Mr Chiam See Tong: If we are a member of this international convention, would that not open the floodgates to other contractors coming into Singapore in fierce competition with our own contractors, especially supplying services?

Dr Richard Hu Tsu Tau: This situation already exists because we are not restricting anybody from coming in. So I do not think that really changes the situation.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clauses 1 to 7 inclusive ordered to stand part of the Bill.

Clause 8 -

Mr Shriniwas Rai: Sir, in view of the explanation offered by the Minister, I do not wish to move my amendment.

Clause 8 ordered to stand part of the Bill.

Clauses 9 to 26 inclusive ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.