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First Movers get Government Advantage

09 Dec 2004

First Movers will get an advantage when they bid to use public assets. This was announced by Dr Vivian Balakrishnan, Acting Minister for Community Development, Youth and Sports, and Senior Minister of State for Trade and Industry, at the 12th BlueSky Exchange and Evening on 8 December 2004.

2. The Ministry of Finance (MOF) and Ministry of Trade & Industry (MTI) have worked out a framework for public agencies to grant First Movers this advantage. The aim is to recognize and encourage innovative business ideas.

3. First Movers are not merely suggestors; their ideas must be taken up for implementation.

4. Public agencies will decide for themselves what ideas merit First Mover advantage. The guiding rules to qualify as First Movers are:

a) The party has suggested a new idea that has not been suggested before; or the party's idea has been suggested before by other parties, but the idea has not been actively considered by the public agency within the 12 months before the suggestor approached the agency with the idea; and

b) The public agency as a result accepts the new idea for implementation shortly after the suggestor approaches the agency with the idea.

5. First Movers can be granted an allocation advantage and may additionally be given a price advantage. Allocation advantage means that the First Mover gets favourable treatment when the asset is to be allocated for the specific use proposed by the First Mover. For instance, First Movers can be directly allocated the use of the assets for up to 6 years through a waiver of competition under certain situations (e.g. for pilot trials). Alternatively, if the asset is put up for tender for the specific use proposed by the First Mover, public agencies have the flexibility to allow the First Mover to match the highest tender bid received if the First Mover's tender bid is at least 90% of the highest bid for that asset.

6. Price advantage means that First Mover need not have to pay the market price for the use of the physical asset. For instance, if the asset is put up for tender for the specific use as proposed by the First Movers, public agencies have the flexibility to allocate the asset to the First Mover without requiring it to match the highest tender bid received, so long as the First Mover's tender bid is at least 90% of the highest bid for that asset.

7. Whether, and to what extent, a First Mover will enjoy an allocation or a price advantage will depend on the idea as well as the asset concerned. This can vary from case to case. There is no one-size-fits-all treatment under the First Mover framework. The framework gives public agencies the flexibility to decide on the most appropriate treatment, in a way that balances the recognition of the First Mover's idea with the following principles in public procurement:

a) Need to have open and fair competition
The allocation advantage should not inadvertently stifle open and fair competition, as this will be detrimental to the growth of entrepreneurship.

b) Need to obtain fair value on resources
The agency should generally ensure that fair value is obtained from the allocation of public sector assets.

8. Public agencies will state clearly the nature of the advantage that will be granted to the First Mover if it puts up the asset for allocation by tender. This is to facilitate open and informed tender participation by all potential bidders.

9. The First Mover Framework takes effect from 8 December 2004.

Please click here to view the flow chart on First-Mover Framework.