Monday October 26, 2009
Johor practises open tender
JOHOR BARU: The issue of non-transparency does not arise in Johor when awarding public projects or tenders to successful bidders or contractors as it is done via an open tender.
Mentri Besar Datuk Abdul Ghani Othman said the guidelines and procedures were based on the directives stated in the Treasury Department Circular No: 5, 2007, and the Works Department Circular No: 4, 1993.
He said the tender notice for projects would be advertised in major newspapers and that contractors had 21 days to tender their applications to the Works Department.
Ghani said the Works Department would also submit the estimated cost of the projects which would be used as a yardstick for awarding the contracts.
All applications would be opened and verified by two members appointed by the state Works Department director and applications (only the bidding prices and not the name of the contractors) would be posted on the notice board for public viewing.
“The open-tender system practised by us is to get projects with the most competitive cost. However, it does not mean that we have to offer the tender to the lowest bidder,’’ he told StarProbe.
Ghani said awarding of a tender was based on comparing one tender against another and also the estimated cost of the project submitted by the Works Department.
Others factors taken into account include good track record, financial capability, technical ability and time taken to complete the project.
He said the Works Department’s estimated cost of a project was based on the current prices of building materials, adding that the department updated monthly changes in raw material prices.
Ghani said the cost index of building materials and their current prices were based on data from the Statistics Department. “So, allegations that the department does not keep abreast with the price volatility of building materials and current market price do not arise,’’ he said.
Ghani said contractors could always claim they had no choice but to mark up the cost of a project because building material prices were controlled by certain parties or suppliers.
However, he said there was a special provision, called variation of price, that was included in the contract to help contractors in cases where there were increases in the prices of building materials.
Ghani said Johor was strict when awarding projects to contractors to ensure that there would be no “short cuts” or “cutting corners” or else they would deliver inferior projects.
He said it would be better to have a small number of competent and reliable contractors than to have many who were not able to perform satisfactorily.
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