NTUC lobbies for update to govt procurement law

The NTUC building in the Marina Bay Financial Centre.
The NTUC building in the Marina Bay Financial Centre. ST PHOTO: KUA CHEE SIONG

Labour movement wants to stop 'common practice' of awarding one-sided contracts

The labour movement is calling for a law that governs government contracts to be updated so that contractors are treated fairly.

The National Trades Union Congress (NTUC) wants the Government Procurement Act to be amended to stop the Government from awarding "one-sided contracts", which it said is a "common practice".

In a one-sided contract, the financial penalties slapped on contractors who fail to deliver are heavier than the actual losses suffered, the NTUC said.

It did not give statistics of unfair contracts that it had come across or cite examples of how they were unfair, but said its assessment was "based on feedback from the ground".

NTUC assistant secretary-general Zainal Sapari said the latest move continues the labour movement's efforts in the past few years to prevent the outsourcing of government services from depressing the salaries of low-wage workers.

The NTUC has pointed at cheap and irresponsible outsourcing as the main culprit for the wage stagnation of low-wage workers such as cleaners and security guards.

In cheap outsourcing, contractors bid low to win government contracts, and the salaries of workers are depressed as a result.

Such contracts also prevent the contractors from increasing their workers' pay even when the National Wages Council recommends wage hikes, said Mr Zainal. "Changing the government procurement law will set in place industry standards that the private sector will be compelled to follow," he added.

The Government Procurement Act was passed by Parliament in November 1997 after Singapore acceded to the World Trade Organisation (WTO) Government Procurement Agreement a month earlier.

The Act brought Singapore's system of awarding government contracts in line with that approved by the WTO, and standardises how WTO member countries award government contracts.

When the law was debated in the House in 1997, then Finance Minister Richard Hu said the WTO agreement was an international treaty designed to make government procurement more transparent and ensure governments did not protect domestic products, or discriminate against foreign suppliers.

The law is "a re-affirmation of Singapore's open and transparent government, and our commitment to open, multilateral trading systems", Dr Hu said in 1997.

When contacted yesterday, the Ministry of Finance said it has received NTUC's suggestions and is studying them. The spokesman noted that government rules ensure the financial penalties imposed on contractors are commensurate with the damages or losses suffered by government agencies that bought the services or goods.

He added: "We welcome feedback on instances of unfair practices and will work with the relevant stakeholders to address them."

A version of this article appeared in the print edition of The Straits Times on January 06, 2017, with the headline 'NTUC lobbies for update to govt procurement law'. Print Edition | Subscribe