Alternative Views: Political will key to stopping abuses in restricted tendering

This article first appeared in Forum, The Edge Malaysia Weekly, on April 12, 2021 - April 18, 2021.
Alternative Views: Political will key to stopping abuses in restricted tendering
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If only the country had the same political will to combat corruption as it has had in handling the Covid-19 pandemic, billions in taxpayers’ money could have been saved.

The government’s use of technology as the bedrock of the process to trace and isolate infected cases is proving to be a useful tool to combat the virus and roll out vaccines. The MySejahtera app allows for the compilation of vast amounts of data that is broken up.

Eventually, it is supposed to prioritise the high-risk groups and those needing the doses first. The amount of data collected is enormous. So far, more than six million Malaysians have registered with MySejahtera and the number is growing.

What is perplexing is that if the government can use technology to its best advantage to combat a virus that is hardly 15 months old, why can’t it use big data and artificial intelligence to combat and weed out corruption that is a bane in the country?

The case of a group of companies under the control of a few individuals exploiting a loophole in the government’s restricted tender process is not really new. The Sabah Water Works scandal in 2015/16, where cash and assets amounting to RM114 million were seized, is still fresh in the minds of many. The money is said to be mainly from restricted tenders carried out by the department and was meant for political funding.

Restricted tendering has been ongoing for several years, from the Barisan Nasional regime to the Pakatan Harapan government and now the loosely tied Perikatan Nasional coalition. Some see it as a way to facilitate political funding.

The abuse happens right under the noses of politicians and high-ranking government officials who, most of the time, turn a blind eye. It comes to light only when competitors eyeing the same contract blow the whistle.

The objective of restricted tendering is for the government to award relatively smaller jobs quickly without having to go through an open tender, which can be lengthy and time-consuming.

A restricted tender normally is for projects that are less than RM100 million in value and comes under the purview of the respective minister. If the amount is less than RM50 million, there are instances in which the secretary general of the ministry handles the process.

The process starts with government officials calling for companies on their list of approved contractors to put in bids for a particular procurement or project. The criteria for companies to be on the list are relatively standard. A company would need to have several certificates, including from the Ministry of Finance and the Construction Industry Development Board, where relevant.

The phrase “restricted tender” itself means that not all and sundry are allowed to put in their proposals. Sometimes, ministry officials identify the companies eligible to participate in a restricted tender.

The ministry’s quantity surveyor (QS) will estimate the cost of the project, a key information that the eventual award will be based on.

A restricted tender is a contest of at least eight to 10 companies invited by the ministry to put in their proposals for a specific job. The lowest bid does not necessarily get the job. The company also has to be technically competent.

On paper, the process is supposedly transparent and offers an efficient price discovery method. In reality, however, it is open to abuse because of collusion among the participating companies.

This is what the Malaysian Anti-Corruption Commission (MACC) uncovered as it cast its net over government and private sector officials who have allegedly been manipulating government contracts to the tune of RM3.8 billion since 2014. The ringleader is reported to be a Datuk who has in his stable hundreds of companies registered with at least 10 ministries.

When restricted tenders are called, the ringleader puts in several of his related companies and one of them would eventually land the job, aided by insider information.

MACC has also remanded a government QS for questioning for supposedly working with the Datuk.

In times when there is technology to trace millions of people, it is perplexing why collusion among companies in restricted tenders cannot be picked up by government officials.

Technology is used at the forefront of forensic accounting, where troves of documents, transactions and flow of funds are broken down to unearth evidence. Technology allows for the spotting of commonalities based on phone conversations, locations, the frequency of meetings and money flows for investigators to make an educated guess on a crime.

The tools are available to help ministry officials comb through the logs and data to spot collusion among companies. What is even better is that the outcome of the investigations and evidence collated can be tested in court.

However, technology is only a tool. It is not the investigator and decision maker. It cannot make the ultimate decision whether those who are abusing the system should be hauled up. Ministry officials and MACC can do all the work with the help of technology and whatever resources that are at their disposal.

But there has to be political will to prosecute and ensure such cases get priority in the courts. In relation to swift justice, the Sabah Water Works scandal, which dominated headlines as the biggest haul in MACC’s history, is still in the courts after five years.

Slogan chanting and campaigns to wipe out corruption can earn brownie points. Ultimately, it has to be translated into action and abuses have to be dealt with in the courts swiftly. The cases cannot go on for years without an outcome, as it would send the wrong message.

For abuses in restricted tendering to end, there has to be political will across all levels.


M Shanmugam is a contributing editor at The Edge

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