HDB TENDER SELECTION

Mr Chiam See Tong asked the Minister for National Development, in this bad economic climate, whether HDB is willing to review its selection criteria, in particular, to deviate from its normal practice of awarding a tender to the contractor with the lowest bid.

Mr Chiam See Tong asked the Minister for National Development whether he will review all contracts which HDB has accepted on the lowest tender prices to enable these contractors to complete the jobs for which they have tendered.

Mr Mah Bow Tan: HDB's tender system is guided by the Government's policy to award a tender to the company that gives the best value for money, and not necessarily the lowest bidder. First, contractors are pre-qualified based on their financial resources, professional and technical qualifications and track record, using the Building and Construction Authority (BCA)'s Contractors Registry as a guide. Second, HDB will verify that the tender proposals fully comply with the tender requirements. The tender proposals are then evaluated based on their price competitiveness, conformance to the required specifications, the tenderer's ability to undertake the project, his financial solvency and his performance in other public sector projects.

Finally, HDB conducts due diligence on the tenderers and their tender prices. If HDB finds that the lowest tender price is significantly below the other tender bids and its own estimates, it will interview the tenderer and ask him to re-examine his bid. He can withdraw his bid if he so chooses.

On the whole, HDB's tender system is sound and working well. Since 2000, the number of HDB contracts that had to be terminated was only 4% of the total number of contracts awarded. However, even with a rigorous selection process, there is no guarantee that selected firms will not meet business difficulties and flounder later, especially during this economic downturn.

Under HDB's tender system, the company that offers the best combination of price, quality and reliability will be awarded the contract. All things being equal, HDB will award to the lowest bidder who can do the job. It is objective and fair, and ensures transparency and accountability in the use of public funds.

Nonetheless, in view of recent feedback, MND and BCA are presently reviewing the current tender system, and seeking views from industry representatives and key Government agencies. For ongoing projects, contracts have already been entered into between HDB and its contractors and these are legally binding. HDB will continue to monitor its contractors' performance closely. If any contractor runs into difficulty, HDB will take immediate action to rectify the situation and minimise the impact on the public. TERRACE