Government continues to suffer procurement lapses: auditor-general

Jeanette Tan
Despite attempts in recent years to improve, numerous government agencies and affiliated organisations continue to suffer from procurement lapses, said the Auditor-General on Wednesday in his annual report. (AFP file photo)

The government, its statutory boards, agencies and affiliated companies continue to flout procurement rules despite efforts in recent years to improve, said Singapore's auditor-general's office (AGO).

In his annual report based on the financial year ending March 2013, Auditor-General Willie Tan noted that "some entities were not sufficiently diligent in ensuring compliance with procurement rules".

These lapses included waiving competition on weak grounds, allowing certain bidders to make key changes to their bids after the closure of tenders, not disclosing evaluation criteria up-front in tender documents, not evaluating tenders properly and obtaining approvals after actions had already been made.

There were also two public sector entities that had awarded contracts to related parties, such as their subsidiaries, and in one instance the tender was awarded even though the bids submitted did not comply with tender requirements.

One agency involved in procurement lapses is the Media Development Authority, which negotiated with a bidding vendor to revise its proposal after the closure of a tender for the organisation of a film festival worth $4.57 million. The company in question initially made the highest bid, but after its revision, submitted the lowest bid and was thereafter awarded the contract.

In another tender for claims processing and other related services, the MDA failed to disclose all of its evaluation criteria in its tender documents, and awarded it to an incumbent vendor based on a comparison of bid prices that were wrongly calculated.

Singapore's Islamic Religious Council (MUIS) was also identified for failing to manage its debts properly. The AGO said at the point of its checks, MUIS had a hefty $24.68 million in debts owed to it, with more than 90 per cent of the debt being outstanding for more than 90 days, and some even dating as far back as 1998.

It also gave some $5.14 million in loans and advances to subsidiaries and mosques without agreements, adequate records or repayment schedules drawn up, according to the AGO report.

At the same time, the council was found with procurement lapses, in particular obtaining approval for tenders between 17 days to four months after the selected vendors had delivered their goods or services.

"By failing to obtain prior approval, MUIS had undermined the role of the approving authority and bypassed the controls to ensure that waivers of competition, award recommendations and variations were properly justified before implementation," the AG wrote.

Separately, Ngee Ann Polytechnic was found to have included items it should have foreseen to be required for a construction contract it called a tender for in its provisional sum -- an amount of money that is set aside for unplanned expenditure that may crop up through the course of a project's execution.

This resulted in an inflated provisional sum that took up an abnormally sizeable 24 per cent of the total contract value, which itself was higher than it should have been because the polytechnic had only invited one supplier to quote a bid for most of its purchases.

These were among several other lapses spotted by the AGO in its audit of the government's financial statements, 13 statutory boards, two government funds and five government-owned companies.

Related stories:
Committee raises concerns over procurement lapses in public sector
Clearly, we could have done more: PM Lee
COMMENT: The missing piece in a smart government