Malaysia can save up to RM2.3 billion if it adopts measures to improve transparency and competitiveness behind public procurement, the Institute for Democracy and Economic Affairs (Ideas) has said.

The think tank said one of the means for the government to achieve this is by providing more detailed information on the reasons of selection of certain contractors in the awarding of a tender to both the winning and losing bidders, and to the public.

This is one of four measures Ideas said are outlined in a new policy briefing paper it has released and which is based on the European procurement system.

“The calculation shows that Malaysia can save about RM400 million to RM2.3 billion, depending on the percentage of non-transparent public procurement, if measures of transparency are adopted,” it said in a statement today.

The European standard, as outlined in a paper authored by Dr Francesco Stolfi and Sri Murniati,  would also encourage competition.
 
"Competition does not only benefit local players, but also the public at large. Competition would encourage suppliers to bid more aggressively, thus reducing prices and producing savings in public spending," Ideas said.
 
Besides providing more information in pre-tender process, the policy paper also made three other suggestions to tighten up the post-tender process.
  • The government should provide information about the reasons for choosing certain contractors and rejecting others, to both winning and losing contractors, as well as to the public
     
  •  A more comprehensive review phase should be incorporated, which would allow contractors to file for complaints if they are not happy with the decision made by the agencies.

    (Currently, complaints against tenders are entertained if they are submitted within 14-28 days of award and only if the tender specification is shown to favor certain bidders.)
     
  • Lastly, create parameters to ensure bumiputera preferences in government procurement are less distortive to competition, and awards are made in a transparent manner. 

    Meanwhile, Ideas applauded the government for a move in the right direction when the Finance Ministry recently published tender information online.

    "The authors’ note that the government has started to improve transparency in government procurement such as publishing some information about direct negotiation contracts online and allowing the public to monitor the actions taken as a follow-up to the Auditor-General reports through an online dashboard."