SINGAPORE: Outcome-based procurement will be progressively introduced in the cleaning, security and landscape sectors, said Senior Minister of State for Finance Indranee Rajah in Parliament on Monday (Apr 11).
This alternative procurement approach will require government agencies to change the way they call and evaluate tenders and how they monitor service providers, Ms Indranee said. It will also require changes by service providers in the way they respond to tenders and provide their services.
She explained: “For example, rather than specifying headcount for security contracts, agencies could specify areas to be monitored and the response time expected of security officers in the event of an alert. This would enable tenderers to consider using technology and innovative deployment of their staff to support our efforts to raise productivity and raise wages in these sectors.”
Speaking at her Ministry’s Committee of Supply debate, Ms Indranee was addressing MPs’ questions on whether government procurement practices can be used to achieve objectives, such as raising wages for lower-income workers.
Ms Indranee cautioned that while the Government has taken the appropriate action where possible – such as supporting the Progressive Wage Model over cheap sourcing practices in the cleaning, security and landscape sectors – government procurement policy is not always a suitable or appropriate means of impacting wages.
“Where government intervention is required to meet certain policy objectives, we generally do this through targeted measures rather than through conditions of procurement. This avoids mixing multiple objectives into the government procurement process which could result in distorted outcomes – that’s the broad principle,” she said.
Some of these targeted measures to assist workers, according to Ms Indranee, include the Workfare Income Supplement, which has been enhanced in this year's Budget.
ON HOW GOVERNMENT PROCUREMENT POLICY CAN FACILITATE GROWTH
Responding to MPs who wanted to know how small and medium enterprises (SMEs) can access government procurement opportunities, Ms Indranee noted that over the past three years, SMEs have captured more than 60 per cent of total government contract value and around 85 per cent of all government tenders.
“This share of the total number of government contracts is significantly higher than in other countries, such as the UK,” she added. “Our SMEs have successfully tendered not just for smaller projects, but also for more sizeable ones. For the past 3 years, by contract value, about 50 per cent of all contracts above S$50 million were awarded to SMEs, a very respectable proportion.”
Ms Indranee also spoke on action taken to reduce the compliance and regulatory burden on businesses.
She said that the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority are reviewing regulations, including the holding of annual of general meetings, and the filing of annual returns. The details of the proposed changes will be announced during MOF’s public consultation on the regulations later this year.