Relaxation of NEP (Series 2)

Government Procurement System.

a.Margin of Preference (MOP).

Background:
•The government procurement policy was seen as being too conservative.

Arguments:
•The above procurement process is selective and non-transparent.
•The procurement system is not implemented in a transparent manner.
•Greater relaxation in our procurement policies is needed in order to enhance the quality and price competitiveness of government procurement.

Suggestions:
•A committee must be setup to preserve the transparency and integrity in awarding the government tenders for projects and services.
•Preferential treatment to Bumiputra companies must be done in a transparent manner.

b.Direct negotiation (Direct NEGO) in Government Procurement.

Background:
•The direct negotiation approach should only be conducted when the number of people who are able to implement a particular project is limited.
•Procurement by direct negotiation requires special approval from the Treasury of Malaysia.

Arguments:

•Financial irregularities will arise from the poor monitoring of projects as it does not goes through open tender system.
•There is no transparent system in the direct negotiation approach.
•The officers are conducting the direct negotiations approach even there are a lot of people able to implement the project.

Suggestions:

•Abolish the direct negotiation approach and replace it with open tender system with MOP.

c.Class F contractor.

Background:

•There are approximately 35,253 Class F registered contractors (Bumiputera only). They are the smallest fry of the contractor’s world, dependent on government contracts that range from RM5,000 to RM200,000 project.

Arguments:

•These Class F contractors had been "too government-centric”. They have become too reliant on the Government for contracts.
•The Class F concessions handed out are usually a political patronage of UMNO.

Suggestions:

•Abolish the class F contractor system and replace it with an open tender with MOP system for all SMEs.