Governments' Period Contracts and Framework Agreements for Large Companies Offering Full Set of Services02 Aug 2022
Parliamentary Questions by Mr Gerald Giam:
To ask the Deputy Prime Minister and Minister for Finance whether Whole-of-Government Period Contracts and Framework Agreements favour large multinational companies that can offer the full set of services in tender requirements at the expense of local small and medium enterprises and independent contractors who may potentially offer a smaller set of the services at more competitive prices.
To ask the Deputy Prime Minister and Minister for Finance (a) whether the Ministry conducts contractor concentration analysis for Whole-of-Government Period Contracts and Framework Agreements called by various Government Procuring Entities; and (b) what is the average share of the top vendor that is within the appointed panel of vendors across all public sector agencies by its procurement value.
Parliamentary Reply by Deputy Prime Minister, and Minister for Finance Mr Lawrence Wong:
Whole-of-Government (WOG) Period Contracts and Framework Agreements are demand aggregation (DA) contracts that cater for common buys across agencies, by appointing a panel of vendors that agencies can choose to buy from. The aim is to improve the efficiency of the bidding and evaluation process, and enhance value-for-money via demand aggregation.
The number of vendors on the panel of a WOG DA contract depends on the nature of the procurement contract. There are some panels with a single vendor as the vendor can sufficiently cater to agencies‘ needs for a particular product or service during the contract period, and there are also panels with more than 20 vendors appointed. Regardless of the number of vendors on the panel, all of them would have gone through a competitive tender process before being appointed to be the panel.
In choosing a vendor from the panel, agencies should award to the vendor that best meets their requirements at a suitable pricing. The share of contracts awarded to each vendor is not a criterion that the agency would consider when it selects its vendor. Hence, it is not meaningful for MOF to set targets for the share of procurement awarded to vendors participating in WOG DA contracts.
The WOG DA contracts are open to both large companies and SMEs in Singapore. The key consideration for being awarded DA contracts is not the size of the company, but their ability to deliver cost-effective services. Currently, SMEs make up approximately 75% of all vendors on the panels, and are awarded more than 85% of the procurements through these contracts.