jq75
Honorary Member
- Joined
- Dec 5, 2000
- Messages
- 136,003
- Reaction score
- 2,453
Town council contracts not always given to lowest bidders
Sunday Times AUG 8, 2004
Town council contracts not always given to lowest bidders
A company's work history, debt record and financial standing are factors considered too
By Tracy Quek
WHEN it comes to awarding cleaning contracts to upkeep estates, MP Charles Chong has learnt that cheapest isn't always best.
Four years ago, the Pasir Ris-Punggol Town Council engaged the lowest bidder to take care of the greenery in the estate.
Mr Chong, the council's chairman, said: 'It put in such a low bid that it didn't have money to pay its workers. So they didn't show up and the greenery was left in a bad state.
'We had to hire someone else to clean up the mess. That cost us more in the end.'
Now, it looks at a company's past work experience and how well it did the job in past contracts.
Recent woes of well-known construction companies such as Wan Soon and Sum Keong have put the spotlight on firms bidding impossibly low to land contracts, despite knowing they would lose money.
These so-called 'suicide bids' have led to problems such as work stoppages or disruptions because employers could not pay their workers or for materials.
Mr Chew Heng Ching, the coordinating chairman for PAP town councils, said that in recent years, the councils have been moving towards a more performance-oriented process in public tenders.
Any maintenance, cleaning or repair work that the councils do must be put up for public tender.
Councillors then interview the bidders, check their financial standing, debt record and if they have had run-ins with the law.
Evaluation committees go so far as contacting a contractor's previous clients to check on its past. Every council must already know what the job is worth and be able to tell if a bid is way off the mark.
Hong Kah GRC MP Ang Mong Seng, also the council's chairman, said that when he implemented the 'cheapest isn't necessarily the best' principle several years ago, 'problems such as illegal workers, and companies cutting corners stopped'. Cleaning company Fourways has been keeping estates in Marine Parade GRC clean for the last 10 years.
It may not have been the cheapest the town council could hire, but it has kept the contract because it is reliable and has good standards, said the council.
The council's general manager Tan Jack Thian said four of the five cleaning companies the council hired did not win on price. 'We look at many other aspects too.' Besides Marine Parade and Pasir Ris-Punggol, the other town councils The Sunday Times contacted which do not go solely for price are: Hong Kah, Jalan Besar, East-Coast, Sembawang and Jurong.
By assessing such factors as a company's financial health, its workers' skill and use of machinery, these councils say they've been able to avoid contractors that make 'suicide bids' and do shoddy work. Hong Kah Town Council uses about half a dozen cleaning contractors, only half of whom put in the lowest bids. In Sembawang, two of the four cleaning contractors were also not the low bidders. In Jalan Besar, only one of its four contractors was the lowest bidder.
But all the councils said that though their contractors were not the cheapest, the bids accepted were still within budget.
The councils declined to give the value of the contracts but Marine Parade said it spends about $430,000 a month on conservancy contracts.
The Finance Ministry, which oversees the overall tender system for the civil service, said that the rest of the public sector has also been applying criteria other than cost to assess tenders.
Next, it wants these agencies to stop specifying how to get a job done, and to leave that to private sector companies that win tenders.
In Marine Parade, of the 11 companies which vied for the cleaning contract, Fourways' was the fourth bid from the bottom: 10 per cent higher than the lowest bid, and half that of the highest.
Fourways director Leslie Lee said: 'We were not too surprised as our cleaners have been turning in good performances all this while.'
Sunday Times AUG 8, 2004
Town council contracts not always given to lowest bidders
A company's work history, debt record and financial standing are factors considered too
By Tracy Quek
WHEN it comes to awarding cleaning contracts to upkeep estates, MP Charles Chong has learnt that cheapest isn't always best.
Four years ago, the Pasir Ris-Punggol Town Council engaged the lowest bidder to take care of the greenery in the estate.
Mr Chong, the council's chairman, said: 'It put in such a low bid that it didn't have money to pay its workers. So they didn't show up and the greenery was left in a bad state.
'We had to hire someone else to clean up the mess. That cost us more in the end.'
Now, it looks at a company's past work experience and how well it did the job in past contracts.
Recent woes of well-known construction companies such as Wan Soon and Sum Keong have put the spotlight on firms bidding impossibly low to land contracts, despite knowing they would lose money.
These so-called 'suicide bids' have led to problems such as work stoppages or disruptions because employers could not pay their workers or for materials.
Mr Chew Heng Ching, the coordinating chairman for PAP town councils, said that in recent years, the councils have been moving towards a more performance-oriented process in public tenders.
Any maintenance, cleaning or repair work that the councils do must be put up for public tender.
Councillors then interview the bidders, check their financial standing, debt record and if they have had run-ins with the law.
Evaluation committees go so far as contacting a contractor's previous clients to check on its past. Every council must already know what the job is worth and be able to tell if a bid is way off the mark.
Hong Kah GRC MP Ang Mong Seng, also the council's chairman, said that when he implemented the 'cheapest isn't necessarily the best' principle several years ago, 'problems such as illegal workers, and companies cutting corners stopped'. Cleaning company Fourways has been keeping estates in Marine Parade GRC clean for the last 10 years.
It may not have been the cheapest the town council could hire, but it has kept the contract because it is reliable and has good standards, said the council.
The council's general manager Tan Jack Thian said four of the five cleaning companies the council hired did not win on price. 'We look at many other aspects too.' Besides Marine Parade and Pasir Ris-Punggol, the other town councils The Sunday Times contacted which do not go solely for price are: Hong Kah, Jalan Besar, East-Coast, Sembawang and Jurong.
By assessing such factors as a company's financial health, its workers' skill and use of machinery, these councils say they've been able to avoid contractors that make 'suicide bids' and do shoddy work. Hong Kah Town Council uses about half a dozen cleaning contractors, only half of whom put in the lowest bids. In Sembawang, two of the four cleaning contractors were also not the low bidders. In Jalan Besar, only one of its four contractors was the lowest bidder.
But all the councils said that though their contractors were not the cheapest, the bids accepted were still within budget.
The councils declined to give the value of the contracts but Marine Parade said it spends about $430,000 a month on conservancy contracts.
The Finance Ministry, which oversees the overall tender system for the civil service, said that the rest of the public sector has also been applying criteria other than cost to assess tenders.
Next, it wants these agencies to stop specifying how to get a job done, and to leave that to private sector companies that win tenders.
In Marine Parade, of the 11 companies which vied for the cleaning contract, Fourways' was the fourth bid from the bottom: 10 per cent higher than the lowest bid, and half that of the highest.
Fourways director Leslie Lee said: 'We were not too surprised as our cleaners have been turning in good performances all this while.'