World of difference between RFPs and open tenders — Ravinder Singh

MAY 28 — In their letter "NGOs, experts free from accountability?" Timothy Tye and Joshua Woo state that the contractors for the PTMP were selected through a request for proposal (RFP) which they try to make out as being better than the open tender system.

A tender is a price quotation for a job the specifications (blueprints) of which are fully laid down by the party calling the tender. Besides the price they are quoting, the bidders may also be required to give a time frame to complete the job if it is a construction job.

When the tender closes, all the tenders or bids received are opened by a selection committee and normally the lowest tender is accepted. If the price is the lowest, but the time to complete is rather long, then the committee may select another one which is the best value for money considering the price and time for completion of the job.     

On the other hand, an RFP is just that - requesting interested parties to send in their proposals for a job for which no specifications (blueprints) have been laid down. Thus, the interested parties are required to prepare the blueprints and quote their price for the job.

There is no set criteria for selection of RFP bids. It is up to the whims and fancies of the persons doing the selection, and they can select the most expensive one justifying that it provides for this and that which are missing in the others. The ‘winner’ may be a RM2.00 company or a favoured person’s company. Reasons are then created to justify giving the contract to the said ‘winner’. So an RFP is not transparent, and without accountability.

There is therefore a serious conflict of interest in the RFP system as it is open to abuse and it serves as a cover for awarding contracts to favoured parties or cronies.

Take an example. The government wants to build 100 units of Semi-D double storey, 5-room houses for high ranking officers. To call a tender, it must prepare the plans and provide full specifications for the finishing, plumbing, electrical, built-in furniture, roofing material, etc. Contractors have to quote based on the plan and specifications, and the selection is based on the prices quoted.

On the other hand, if the government calls for RFP, it is asking interested parties to propose the designs and prices for 100 units of 5 room Semi-D double storey houses. It is up to the contractors to come up with the plans and specifications, and quote their prices. Now, on what will the selection be based? The prices quoted by different parties will be for different designs and specifications. So it is up to the whims and fancies of the selection committee to pick anyone, even the most expensive one, and justify it by claiming that the chosen “Request-for-Proposal” was the best.

In the PTMP case, the Penang state government did not draw up the blueprint and call for open tenders to decide whose construction job (according to the given blueprint) would be best value for money. Rather, it asked the developers to propose what they would like to do, supposedly to solve the private car ownership related traffic congestion problem.

Of course, given the opportunity, the developers would factor in their own interests into their proposals. That is what has happened.

The developers’ plan to destroy permanently the richest fishing area in Penang to generate  money to pay for the PIL and tunnel are directly in their own interests. They will be making money for the duration it will take to destroy (reclaim) the fishing area (said to be about 20 years), and then continue making more money by the construction of buildings to outdo Singapore’s  Marina Bay on the three islands created by them.

The developers’ are not concerned about the few thousand fishermen and the amount of fish (cheap protein) they are supplying daily to the population of Penang. The state is not concerned about this, about food security.

Is the state government free from accountability for abetting the destruction of the richest fish producing area by the developers who factored their own future interests into the RFP? 

According to economist Prof Jomo Kwame Sundaram, the “Public-private partnership fad fails” (The Sun 28 May 2019). It can be read in full at   www.ipsnews.net/2019/05/public-private-partnerships-fad-fails/

RFP type projects are public-private partnerships (PPPs). Prof Jomo says “PPPs are more likely to be abused because they are typically ‘off balance sheet’ so that they do not show up as government debt, giving the illusion of easy credit”.  

Through RFP projects the government is not being accountable to the public. This is what the DAP said it would stop doing, and instead use the open tender system for all government projects and procurements. What happened to that promise? What happened to its CAT?

*This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail.

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