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The recent purchase of Brompton bicycles by the National Parks Board have made government procurement processes taken into the spotlight. NParks approval to purchase of 26 bicycles for a total of S$57,200 has raised the eyebrows from members of the public over the high price. National Development MinisterÂ Khaw Boon Wan have later called for internal review over the transaction.
The investigation has revealed that the notice of tender was drawn up during Chinese New Year period with only 3 working days for Bicycle Company to respond to the tender and most companies were not informed of such tender. This resulted only one company to respond to the tender.
This incident has reviewed the flaws of procurement in both government and construction industry. Procurement has come under tight scrutiny and it has to be improved. Minister Tharman had later spoken on parliament to address the improvement of procurement.
Improvement on government procurement
During the parliament speech, Minister Tharman said the single bidder in procurement has accounted for about 2% of the total value of contracts that are being awarded every year. He added that his ministry will be improving the rules on single bidder and that the approval procedures will be tightened to ensure quotations are kept open long enough and to encourage potential suppliers to take part. (Channel NewsAsia, 2012)
According to Mr Tharman, the improvements on the procurement policies are as followed:
If a single bid has been received, officer is required to assess if the bid received is a reasonable one. In such situations, officer is to include an additional justification of the reasonableness of the bid to the approving authority, by addressing the issues below:
Whether there had been efforts to ensure adequacy of competition for the procurement;
Whether the specifications had been too narrow so as to hinder competition ;
Whether the single bid is competitive or reflective of fair market value ;
Whether the award of the single bid would be consistent with procurement principles of open and fair competition, transparency and value for money, as well as public expectation of prudence and accountability in expenditure;
If the approving authorities find that the single bid is not reasonable, the tender will not be awarded to the company and new tender or quotation shall be called.
Increase in Quotation Opening Period
The minimum quotation opening period for supplier to submit their bids for quotations (eg. government contracts of between $3000 and $70000 in value) will be extended from 4 to 7 working days. By increasing the quotation opening period will encourage competition by giving potential suppliers more time to respond. Where there are exigencies which require a shorter opening period, the approval of at least a Director (or equivalent) must be sought. (MOF, 2012)
Mr Khaw Boon Wan later added in Parliament on 10 September 2012 that departments can also recall the quotations with a longer opening period if they feel it would help to secure more competitive bids. (Today, 2012)
In order to reduce the likelihood of single bid, Mr Tharman urge officer to keep up good practice such as alerting suppliers of quotation or tender opportunities through GeBIZ. This will encourage competition of bids and is especially important when the procurement is for less common products like the Brampton bicycle.
Fair Competition and Efficiency
Mr Tharman said that officer must preserve fair competition and increase the efficiency in public sector. Hence, to avoid any perception of bias, officers should be mindful to maintain a level playing field. It is important that the tender or quotation notice are to published openly in GeBIZ and officers must not disclose information only to selected suppliers such that it gives them an unfair advantage over other suppliers.
Exercising Prudence in Procurement
In outlining the improvement, Mr Tharman also emphasized that Singapore's system of public sector procurement is "on the whole, in good working order". (Channel NewsAsia, 2012). He said that the lapse in procurement were not due to the lack of rules, instead, they were caused by officers failing to follow the rules. Therefore, the improvement for this will be exercising prudence in procurement. This means that officer must ensure that all procurements are carried out in a manner that is consistent with the procurement principles, as well as fiscal prudence and accountability. Officers are to be mindful that procurements do not come across as extravagant. It means that when handling procurement, officer is to take into account prudence in the use of public monies, in addition to operational requirements, before giving approval to the procurement.
Declaration of Conflict of InterestÂ
Lastly, in order to protect the integrity of the procurement process, a reply to a public at straits times website, the director of Minister of Finance Miss Lim Bee Khim stated that officers involved in any stage of the procurement process should declare any conflict of interest and if necessary, to withdraw from the procurement process and be replaced by another officer.
Applying the concept to construction industry
Base on the above, we are also able to improve procurement in construction industry by using the government procurement policies as a guideline for construction procurement.
One such concept we can apply to the construction industry is fair competition and efficiency. Therefore, when calling for a tender, bidder/tenderer should receive the same information, this includes responses to questions. Same like the government policy, the procedure must be fair; there must be a fair competition. Example of the information to be given to the tenderers consists of the following:
â€¢ Basis of competition
â€¢ Criteria to be used in the evaluation of ability
â€¢ Priority order to be given to these criteria
â€¢ In the case of competition on ability and price and combined marking arrangements, an indication should be provided of the minimum weighting for ability
Another concept we could adopt in the construction industry is increase in quotation opening period, if possible. The tendering period in construction industries usually varies from 4 weeks to 8 weeks depending on the complexity of the project/tender. However, if the project/tender is too complex to allow bidders to tender on time, the client should also adopt the government ideas of increasing the tender opening period so that they will be able to secure wider choice of tender during tendering process.
In the event if where there is only single bid during construction tendering, client should also assess whether the bid received is reasonable, not only in terms of the price, but also in terms of the ability. This is because tendering on the basis of price alone may be risky; therefore client should also assess the ability of the contractor before award the tender to the contractor.
The purchase of Brompton bicycles by the NParks has reviewed the flaws of procurement in Singapore and procurement is currently under tight scrutiny. In this assignment, we has discussed the several improvement on government process and how we can adopt the to the construction industry in order to achieve improvement in the construction industry.
b. Control on wastages and lost of resources in the construction industry and recycling of used materials are key concerns in Singapore. Explain with supporting newspaper reports.
Singapore is a small and developed country whereby human manpower is the only natural resource that we have. Other natural resources such as steels, woods and aggregates have to source and import from neighboring countries like Malaysia, Indonesia and Cambodia. The price of these natural resources is not cheap due to high demands in the market, therefore it is important to control the amount of wastage produced, prevent for any lost of resources and recycling of used materials in the construction industry.
These issues have therefore become Singapore's key concern. It will not just incur loss to the construction companies; it will also create waste problems to Singapore which will cause an impact to the environment if the issues are not addressed.
At the current stage of development in Singapore, whereby the construction industry which include building infrastructures, road constructions and maintenances requires large quantity of resources, the need to control on the amount of wastages, lost of resources and look for alternative source become an important issue to address.
Below are some ways that we can improvise to better control on wastages and lost of resources in the construction industry:
Create an inventory list
A simple inventory list can be created to keep track of the amount of construction materials delivered to site, amount of construction materials used for fabrication works. This inventory list can provide the site management a better control of the construction materials being used on site. A site personnel can be assigned to take charge of the stock taking and issuing of construction materials.
Deploy material waste bins
Fiq 1: Material Waste Bins (EDCMag)
Material waste bins should be deployed around the site which includes wood waste, metal waste and chemical waste. These material wastes that are collected can be sorted out and deposed at designated bins for recycling purposes. On regular basis, recycling companies will collect the waste materials from the material waste bins from construction sites to process the materials and process them into useable materials to be used again.
Uneducated workers may not understand the importance behind control and reducing the amount of wastages to the construction material. Therefore, site personnel should brief the workers and supervise the work process such as fabrication of steel works in order to reduce the amount of materials being over-used or wasted. This can also reduce the lost of resources issue.
Designated storage area for construction materials
Storage of raw materials delivered to construction site should be stored at designated area. Such practice can reduce the rate of resource being lost. Site personnel can be assigned to account for these materials at the storage area.
Recycling of Used Materials
Most of the wasted materials from construction sites can be converted to recycled materials to be used again. For example, steel waste can be melted down to form steel plates and wood wastes can be processed and converted into building materials and furniture.
One other way of recycling of used materials will be aggregates. Most of the Ready-Mixed Concrete companies in Singapore have been using recycled aggregates from unwanted or unused concrete into their production. Unwanted of unused concrete are treated by concrete declaimer that washed off cementitous substance from the concrete. The aggregate will then be separated into fine and coarse aggregates. These aggregates can then be re-using for production of concrete.
Coarse Aggregate Discharge Gutter
Fine Aggregate Discharge Gutter
Figure 2: A Concrete Reclaimer
CIMG3753 Figure 3: Concrete truck discharge concrete Figure 4: recycled aggregate from reclaimerCIMG3744m
Concrete using recycled aggregates can be used in production of eco-concrete such as non load-bearing walls, small drains, road kerbs, footpaths, non-suspended slabs, lean concrete etc.
Newspaper Article 1
Extracted from zerowastesg.com
Based on the above newspaper article, every year about 1.25 billion tonnes of solid waste is created and this figure may double up by 2025 as stated by World Banks. In order to reduce the amount of solid waste create in Singapore, Samwoh had set up concrete recycling plant to convert material from old building and recycling it into useable surface for road, aircraft, and seaport pavement.
From this article, Samwoh has brilliantly converted unwanted construction waste into useable construction materials by recycling. This way can largely reduce the amount of solid waste contributed every year and also save money from buying new materials which can be costly depend on the market demand.
Construction sites in Singapore should do their part in building a more sustainable environment by reducing the amount of natural resources to be used in construction. As such, recycled material can be considered to be used to substitute the use of natural resource, so as to lessen the impact to the environment.
c. Enclose a simple sample of Conditions of Contract on any construction project and summarise in 1 page the key issues you learn.
We hereby attached the condition of contract provided from Housing Development Board (HDB) to CPG Laboratories Ptd Ltd for Instrumentation and Monitoring Works at Bukit Panjang Neighbourhood 5 Contract 15. Conditions of contract are terms and conditions that set the rights and obligations of the contracting parties, when the contract is awarded or entered into. These include 'general conditions' which are common to all types of the contracts, and 'special conditions' which are unusual to a specific contract such as, contract change conditions, payment conditions, price variation clauses, penalties, etc.
As the Sub-contract works was awarded in Lump Sum, it deliberately stated the Scope of Works to be carried out by the Sub-Contractor. We observed that there is a statement saying that "work may be extended or reduced", "specified quantities in the form of Tender are only provisional quantities", which are to prevent the client, HDB from further variation claims from their contractor, CPG. HDB would be entitled to request addition quantities if necessary with the same payment rate.
Under "Delivery" section, we can see that "the contractor shall at its own costs and expense provide and supply all labour, materials, equipments, transports, insurances", etc. These are the benefit for the client, to avoid any dispute from their contractor.
Under "Payment" section, clause 5.2 states that within 30 days from the date of invoice submitted by contractor need to in valid format, will be specified by the Authority and Authority shall make payment to the contractor the amount set out in the invoice for such part of the work completed. This is a smart statement which benefits HDB authority to get enough time to prepare for payment without worrying for the fixed date deadline. They just need to count one month from the date contractor submitted the invoice. If contractor delays the invoice, they will be delaying their payment too by themselves.
Under "Suspension or Termination" section, the Authority is entitled to give 30 days prior notice and terminate the contract if the contractor has breached any of the clause showing at 8.2. Client has an advantage due to these clause, in case of something happened to the contractor, client can immediately issue 30 days notice and at the same time, client can look for another contractor to carry on with the current work without effecting the work progress which would save money and time for the client.
Under "Liquidated Damages" section, HDB had mentioned CPG needs to pay for LD which is 10% of the outstanding instrumentation work if they could not finish instrumentation work within contract period. This will drive the contractor to meet their schedules in order to avoid paying LD from their profits. Another section "EOT for completion" states that contractor will only be permitted to apply EOT if the delay was caused by client, HDB or the main contractor, who is directly under contract with HDB. If the delay was caused by CPG, they will be charged LD.
The Conditions of Contract are to protect the interest of both Main Contractor and the Sub-Contractor. The job to be completed within/before the Practical Completion Date and the sub-contractors will be paid monthly, final accounts and retention monies return to them, all as mentioned and stated in the Security of Payment Act. (SOP). It is a win-win situation if the contractor could meet all the schedules without delaying.