IMPACT ON CONTRACTOR PERFORMANCE AS LOWEST BIDDER UNDER PUBLIC SECTOR

Abstract

Procurement of Goods & Services policy in the Ministry of Finance (Singapore) aims to achieve ‘Good Value for Money’. The process of procurement goes through a structured tendering procedure due to the bureaucracy involve. In order to attain a high level of accountability on public fund and transparency, the procurement officer will usually award the tender according to the lowest bid. Through this process, corruption is seen to be ruled out. Results from the Gebiz show that most of the gebiz tender is usually awarded to the supplier or contractor with the lowest bid. As the Department of Procurement tries to optimize the quality of the products with ‘Good Value for Money’ services for Singapore, there is a need to microscope the performance of the Contractors and the Service Providers - Suppliers.

Under a competitive environment, Contractors who are awarded the tender due to their low prices could end up producing poor work quality in order to make up for the ‘loss’ OR to maintain their low tender prices. This often has an impact on the maintenance contract in the long run. Amazingly though these contractors priced themselves low enough to win the tender, they manage to survive in the Industry.

Performances of Contractors & Suppliers should come under the responsibility of a Ministry. Reasons for choosing Ministry appointed Contractors & Suppliers in this study is because the users, namely civil servant, and their designated Managing Agent (MA) are willing to provide required information. The MA will give us the contractor’s performances which are been graded by themselves and this evaluation will be useful as the MA operation staff are the “front desk” staff who work closely with the contractor. As the Ministry is involved in national security, security work is of their top priority. Therefore as the lowest tender, will the contractor performance be compromised? Or are they able to attain the required standard set by SPS?

To understand the performance of Contractors & Suppliers whom the Ministry has contracted, we will conduct a series of surveys with the Ministry Staff and the MA. There will also be interview sessions with the Contractors & Suppliers to understand how they prepare the tender as well as their opinion on the gebiz system whereby tenders are awarded to the lowest bid. This will conclude the study on the performance of the Contractors & Suppliers upon getting the lowest quote or tender under the Ministry of Financial procurement system.