Quality vs Value: How does Government evaluate tenders?

Does the lowest bidder always win the tender?

22 Jul 2017
The Singapore Government has a one-stop e-procurement portal named GeBIZ
The Singapore Government has a one-stop e-procurement portal named GeBIZ — short for Government Electronic Business (GeBIZ). The GeBIZ portal provides suppliers with equal opportunities to participate in the public sector’s Invitations To Quote or Tender.

How does the Government ensure that procurement is as fair as possible? We bust three myths about GeBIZ.

Myth 1: SMEs are disadvantaged when bidding for Government contracts

Government procurements are guided by the principles of transparency, open and fair competition, and value-for-money. Government agencies are expected to evaluate all bids submitted by eligible suppliers fairly, regardless of the size of the firm. Agencies also try to ensure that tenders are appropriately sized to give all suppliers – including SMEs – a chance to compete for them.

SMEs have been reasonably successful in securing Government contracts under the open procurement system. Data from the Ministry of Finance shows that SMEs have captured more than 50% of total Government contract value and around 80% of all Government contracts. More than 40% of total contracts were won by companies with revenue of less than S$10 million.

Myth 2: The lowest bidder always wins

This is not true. While suppliers’ bids are evaluated on their value for money, it does not mean contracts are always awarded to the lowest quote.

While price is a key consideration in evaluation, Government agencies check if bids have complied with all the requirements in the tender specifications, as well as evaluate other factors such as quality of the goods and services, timeliness in delivery, reliability, and after-sales support.

Roughly half of all procurements are not awarded to the lowest quote.

Myth 3: The Government always favours local companies

As Singapore is a signatory to the World Trade Organization Agreement on Government Procurement, as well as a number of free trade agreements, the Government is obliged to be non-discriminatory in our procurement practices.

So where procurements are covered under these agreements, the Government cannot discriminate in favour of or against local companies, and other countries who have similar agreements with us cannot discriminate against Singapore companies.


Source: Ministry of Finance

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