Calling of Restricted Tenders By Government Agencies (Factors for Consideration)

Date: 11 November 2013

Parliamentary Question by Mr Yee Jenn Jong:

To ask the Deputy Prime Minister and Minister for Finance in light of the recent Co-Innovation Partnership tender by HDB for next-generation roofing systems which is restricted to participation by only local companies (a) what are the circumstances under which a tender can be excluded from WTO-GPA/FTA restrictions; (b) what are the factors which Government agencies consider prior to calling for such restricted tenders; and (c) how many such restricted tenders have been called in the past five years and for which industry segments.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

Singapore is a signatory to the World Trade Organisation’s Agreement on Government Procurement (WTO-GPA) and various Free Trade Agreements. Our obligations under these Agreements are legislated in Singapore’s Government Procurement Act and its relevant subsidiary legislations^[1]. 
 
A procurement is deemed as a “covered procurement”, which is subject to these Agreements, if it meets the following three criteria:

i) the procuring entity is listed as covered by the Agreements;
ii) the value of the purchase exceeds the threshold value stated in the Agreements; and
iii) the type of procurement is listed as covered by the Agreements.

A covered procurement must be conducted in accordance with the Government Procurement Act and Regulations. This includes allowing for free competition between foreign or domestic suppliers.

The Government’s policy in general is to procure through open tenders, whether or not the procurement is covered by international agreements.  Over the past five years, about 80% of all the awarded tenders were conducted via open procurement process.  Procurements can only be conducted via limited tender if they are among specified permitted scenarios or are not covered by our Free Trade Agreements and the WTO-GPA. Limited tenders are not confined to any industries in particular.

The recent tender by HDB cited by Mr Yee was a research and development (R&D) project. The project, which was aligned with the objective of the Public-Private Co-Innovation Partnership programme, aimed to establish collaborative research with a local company on innovative roofing systems for future public housing. As with the practice in most countries, procurement of R&D is not covered by our international obligations and HDB’s tender was not a contravention.

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^[1] The subsidiary legislations (i.e. the Government Procurement Regulations) under the Government Procurement Act can be found at http://statutes.agc.gov.sg