Government Construction Projects Awarded to Local and Foreign Engineering Companies
Ministry of FinanceSpeakers
Summary
This question concerns Er Dr Lee Bee Wah’s inquiry regarding the number of government construction projects exceeding $200 million awarded to local versus foreign firms and the proportion given to lowest bidders. Minister for Finance Tharman Shanmugaratnam explained that the Building and Construction Authority prequalifies companies based on financial and technical capabilities through a mandatory registration system. He stated that two-thirds of contracts for projects above $200 million awarded in the last three years were granted to the lowest price bidder. The Minister highlighted that Singapore’s international trade obligations require fair competition and non-discrimination, which prevents the tracking of a company's ultimate ownership nationality. Consequently, the procurement regime remains an open one where firms compete based on their ability to meet tender requirements regardless of their nationality.
Transcript
59 Er Dr Lee Bee Wah asked the Minister for Finance (a) in the last three years, how many Government construction projects have been awarded to local engineering companies and how many to foreign contractors for projects above $200 million; and (b) how many of these contracts have been awarded to the lowest tenderers.
Mr Tharman Shanmugaratnam: The Building and Construction Authority (BCA) operates a Contractors Registration System which registers construction companies under various work categories and financial grades. All construction companies must be registered to qualify for the award of public tenders. This means that construction companies are first prequalified to ensure they meet certain standards before they can be awarded Government contracts.
In general, higher value construction contracts require companies to meet higher standards in terms of financial capacity, technical capability of the company and its personnel, company certifications and relevant track record. For example, companies bidding for construction contracts above $200 million will only compete amongst other companies which have attained similar or higher technical and financial standards.
For construction contracts above $200 million awarded in the last three years, two-thirds were awarded to the lowest price bidder.
As a signatory to the World Trade Organization’s Agreement on Government Procurement (WTO-GPA) and various free trade agreements, Singapore is required to ensure fair competition and non-discrimination between foreign and local suppliers. Our procurement regime is, therefore, an open one where suppliers compete based on their ability to meet tender requirements, regardless of nationality. This applies also to competition to be on the prequalification list that I just referred to. For these reasons, BCA does not track the nationality of the ultimate owners of companies awarded tenders.