Proposal to Review Public Sector’s Procurement Frameworks for Service Contracts to Support Sustainable Wage and Productivity Investments

Parliamentary Question by Ms Yeo Wan Ling:

To ask the Prime Minister and Minister for Finance (a) whether the public sector’s procurement frameworks for service contracts such as catering will be reviewed to ensure other factors beyond price, which may include Progressive Wage Model compliance and service quality, are given meaningful weightage; and (b) whether public sector buyers will adopt outcome-based contracts with provisions for periodic price reviews and longer terms to support sustainable wage and productivity investments.

Parliamentary Reply by Senior Parliamentary Secretary for Finance, Mr Shawn Huang:

The Government uses a comprehensive set of criteria combining price and quality considerations in procurement evaluations. For some sectors, eligible Government suppliers must have the Progressive Wage Mark certification.

Central guidance has been provided to all government procuring entities to adopt outcome-based contracts where appropriate and feasible, and to consider the adoption of more productive technology. Examples of this are in the procurement of cleaning services and facilities management services. For multi-year contracts, tenderers are typically able to submit prices for each contract year rather than a single fixed price over the entire duration. This allows tenderers to account for wage adjustments and productivity investments over time in their pricing.