AGO: Grassroots organization unfairly awards contracts to a foreign contractor since 2014

The People Association (PA) and one of its Grassroots Organizations (GRO) have been questioned by the Auditor-General Office (AGO) in its report released yesterday (17 Jul) over 2 tenders whose contract value totaled $500,000 for the Mid-Autumn Festival 2016 and Chinese New Year 2017 events.

AGO found that the GRO responsible for calling the 2 tenders had used the same foreign contractor for the manufacturing of the street light-up decorative items. In fact, the same foreign contractor had been awarded contracts for the annual Mid-Autumn Festival and CNY events since 2014.

AGO observed that the GRO was bias and had not evaluated the proposals from the other tenderers on the same basis. “Besides the issue of fairness, there was also no assurance that the contract was awarded to the tenderer which could provide the best value,” AGO noted.

Furthermore, the foreign contractor who was awarded the contract was from overseas and it required the GRO to bear additional obligations which included accommodation cost for its workers during their stay in Singapore, transportation charges for materials and provision of a site for assembling lanterns.

“These additional costs, on top of the tender price, were not considered by the GRO in its tender evaluation for price comparison. There was also no mention of these additional obligations in the tender evaluation report and tender recommendation report for the tender approving authority to make an informed decision,” AGO said.

The other question, of course, is whether these workers who came from overseas to assemble the lanterns for the events had the right permits to work here, even if they were supposed to be working temporarily for the projects.

GRO accepts tender proposal from sole foreign tenderer after tender closed

In the case of CNY 2017 event, the same foreign contractor was the sole bidder and had also stated in its proposal additional items which the GRO had to bear under the contract. Again, the additional costs were not mentioned in the tender evaluation report and tender recommendation report.

For the CNY 2017 tender, AGO noted that the GRO had accepted the tender proposal of this sole foreign tenderer after the tender was closed.

“The GRO had also allowed the tenderer to submit two revised tender proposals mainly to revise the quantity and lighting effects on the lanterns and consequently, the bid price after the tender had closed,” AGO said.

“Accepting late submission of tender proposal and allowing the tenderer to amend its tender proposals and bid price after the tender had closed went against the principles of open and fair competition, and transparency. Such lapses could lead to allegations of unfair practice.”

To further complicate matters, AGO observed that the contracts signed with the foreign tenderer were not based on the laws of Singapore but those of the tenderer’s country. So, any unresolved disputes would be filed for litigation in the courts of the tenderer’s country, even though the work is done in Singapore and for Singapore.

“Such provisions in the contracts might not safeguard the interest of PA and its GRO,” AGO said.

AGO did not mention the name of the GRO nor the name of the foreign contractor.

PA explained that the contracts were prepared by the foreign tenderer and the GRO did not seek the advice of PA’s legal department before signing the contracts. Moving forward, the GRO would prepare the contract, PA said.

PA also informed AGO that the procurement lapses were largely attributed to the procuring team having inadequate understanding of Government procurement guidelines and operating under time constraints. PA said it would take measures to improve staff understanding and compliance with Government procurement requirements as well as ensure proper contract management documentation.