The town council's chairman, Sylvia Lim, who is also MP for Aljunied GRC, said in a statement that it has appointed FM Solutions and Services Pte Ltd (FMSS) as its managing agent from 15 July, for a period of one year.
A managing agent is in charge of estate maintenance and cleanliness.
After the recent general election which saw the Workers' Party (WP) winning Aljunied GRC and Hougang SMC, the party decided to combine both town councils in order to save operation costs. The AHTC was legally constituted on 27 May.
She explained that the decision to award FMSS the contract without calling for a tender was due to the deadline set by the Ministry of National Development, in which the handover of management to new town councils was to be done by 1 August.
In early June, AHTC held discussions with the incumbent managing agent CPG Facilities Management, the company operating under the former Aljunied Town Council.
Both parties agreed that AHTC would release the agent from further performance of the existing agreement.
Lim pointed out that the current town council also had the task of putting in place new computer and accounting systems, and time was needed for hardware procurement and software development.
"Given the urgency of the timelines above, and the overriding concern that Town Council services should not be disrupted to the detriment of the Aljunied-Hougang residents, AHTC determined that the best course of action was not to call a tender for managing agent services for the transitional period, as there was insufficient time."
"AHTC has proceeded on this course as it is of the view that the above transitional arrangement is necessary and in the best interests of residents in Aljunied-Hougang," said the WP chairman.
Since they were hard-pressed for time, the town council decided to source a service provider who was qualified and able to commence work immediately, taking over all aspects of the managing agent services.
However, in light of its action not to call for open tender, Lim stressed that no WP member has any interest in FMSS.
According to the Accounting and Corporate Regulatory Authority (ACRA), one of the shareholders of FM Solutions is How Weng Fan, secretary of the former Hougang Town Council, which was also run by the WP.
The one-year contract signed with FMSS is shorter than the three-year contract typically made in the industry.
While she acknowledged this issue, given the outlay that the agent requires, Lim noted that the town council expects that its operations should be stable within a year, after which the managing agent contract would be up for tender.
FMSS, which currently has 73 staff, is a company incorporated in Singapore in May this year, and its key directors have been in the field for an average of 20 years.
The company, she added, has also re-employed all 22 staff who formerly worked at Hougang Town Council.
Staff employed by the former Aljunied Town Council have also been told that they were "welcome" to apply for positions at the new AHTC.
FMSS appointment as the town council's managing agent makes it the first external company to be hired by opposition Members of Parliament.