A Simple Administrative Measure To Protect PDC From Possible Manipulation, Malpractice or Even Corruption

Press Statement by Mr Baskaran Kunjamboo, Pengurus Kanan,Bahagian Khidmat Pengurusan, PDC– 1st March 2010

We refer to the article on the Star “Lim Blasted over tender clause” (“Article”), dated 1st March 2010 and wish to clarify our position on the matter. We are surprised at the actions of certain parties who wish to blow up completely out of proportion what is essentially a simple administrative matter.

As reported in the said article, we have indeed included a clause in our Tender Form A allowing termination of awarded contracts at any point in time and without any reason, on the orders of our PDC Chairman (the “Clause”). The Clause is not without its justification.

We wish to stress 4 points. 1, no contractor has ever expressed unhappiness or objected to the clauses contained in the tender Form A. 2, The Chief Minister had never cancelled any contract. 3, this clause is inserted as a form of protection for the public interests of PDC. As there is a time lapse of several months between the issuance of tender Form A and execution of the formal contract between PDC and the contractor, this clause protects PDC by giving PDC the right to terminate the tender before the contract is signed. PDC wants this right during the interim period before the contract is signed in the event of discovering any manipulation, malpractice, hanky-panky and corruption. 4, the Chief Minister/Chairman acts on the proposal of management and he may or may not accept the advice of the management to terminate on an urgent basis based on the reasons in point 3 above. So far, neither has management made any proposal nor The Chief Minister terminated any Tender Award.

For your clarification, Tender Form A is only the preliminary stage in PDC’s entire technical contract process. It is not the only document governing technical contracts. After the said form has been issued, PDC and the contractor are required to enter into and execute a separate agreement (PDC Form 203A) (“Agreement”) in order to formalize the contract awarded. It is to be noted that the Agreement contains regulations for breach on the part of the contractor.

Upon issuance of Tender Form A, the selected contractor would have begun his operations pending execution of the agreement. However, in many cases, there is usually a lapse of several months before the contractor actually executes the said Agreement. In the absence of a formal agreement, PDC faces difficulty in terminating the services of the contractor in the event of a breach or default or the occurrence of a negative event.

Thus, in order to regulate the services of the contractor during the interim period, i.e. prior to execution of the Agreement, PDC included the Clause giving a right to terminate the contract so awarded. The Clause is only meant to serve as a temporary regulatory measure until execution of the Agreement.

For further clarification, PDC did not incorporate the Clause into the Agreement as it already contains its own provisions for governing causes for termination. These provisions are adequate to deal with any form of events that may trigger termination during the period of the contract. This clearly indicates that our intention is not to simply terminate contracts at anytime. If otherwise, PDC would have surely carried the intention to terminate on the order of an individual throughout the entire process and into the Agreement.

We also wish to highlight that PDC’s present practice to deal with contracts considered for termination does not rest in any individual of PDC or the PDC Chairman. Instead, PDC has its own Tender Board to look into and decide on such matters. The Tender Board has the ultimate and final say on all technical contracts/matters and only decisions of the same are carried out.

In light of the above and for all intents and purposes, PDC’s practices have not strayed from the Treasury’s tender procedures as alleged in the Article.

PDC has, so far, awarded 10 contracts carrying the Clause in Tender Form A to 10 contractors. However, all these 10 contractors have each further executed the Agreement with PDC. Since the Agreements entered into do not contain the Clause, the contractors do not have to worry about their contracts being terminated on the order of an individual.

We hope that this simple administrative measure is seen as necessary to protect PDC from possible manipulation, malpractice or even corruption to protect public interest and not other irrelevant reasons.