This article first appeared in The Edge Financial Daily on March 15, 2019

KUALA LUMPUR: The government should consider lowering the minimum threshold value for open tenders, said a think tank.

Currently, procurement of works, supplies and services above the value of RM50,000 and up to RM500,000 is done through calling for quotation, with a mininum of five to be called. Meanwhile, those valued above RM500,000 must be done through tender, according to the Institute for Democracy and Economic Affairs (IDEAS).

“To promote the use of open tenders, the threshold for the procurement of goods, works and services should be lowered to RM200,000,” said Aira Azhari, senior executive at IDEAS, during a dialogue titled, “The NACP and the Road Ahead for Malaysia’s Procurement Regime”, hosted by the think tank yesterday. The NACP stands for Malaysia’s National Anti-Corruption Plan (NACP) 2019-2023 .

For comparison, she said Singapore only allows the use of quotation for contracts valued between S$3,100 (RM9,350) and S$70,000.

The lowering of the tender threshold is one of seven recommendations presented earlier yesterday by the think tank to improve procurement initiatives set out in the government’s NACP, which was launched on Jan 29.

Statistics show that from 2013 to 2018, the Malaysian Anti-Corruption Commission (MACC) found that the procurement sector recorded the highest number of complaints (42.8%) received by the MACC.

Another recommendation made is to ensure open tender is used as the main method of procurement.

“The only mention of ‘open tender’ in the plan is in one initiative to ensure the appointment of rescuing contractors through open tender. The use of rescue contractors should be a solution to an occasional problem.

“Otherwise, open tender should be treated as the primary method of procurement. The fact that the NACP does not explicitly refer to open tender in this way may be due to the fact that a policy mandating the use of open tender is nominally in place. However, this policy is not sufficiently enforced.

“The strategy should therefore prioritise stricter enforcement of the requirement for open tender. In particular, any agency derogating from the requirement for open tender should publish their rationale for doing so,” Aira said.

She also noted that various proposed initiatives outlined in the NACP may not be feasible unless information is accessible, and readily available.

“Hence, the government should hasten the introduction of a Freedom of Information (FOI) Act, which was outlined in the plan, as soon as possible,” she said.

On top of this, IDEAS has proposed that the government review and amend certain clauses within the Official Secrets Act 1972 so as not to contradict the introduction of the FOI law.

“This would allow whistle-blowers, journalists and the public to freely check on procurement activities,” said Aira.