The Aljunied-Hougang Town Council (AHTC) had awarded contracts to a contractor with a higher bid as it had found the firm with a lower price to be "significantly less efficient", said members of its tenders and contracts committee.
In their defence filed in court on Tuesday, Ms Sylvia Lim, Mr Pritam Singh, Mr Chua Zhi Hon and Mr Kenneth Foo denied that they had breached Town Councils Financial Rules for 10 construction projects.
A lawsuit against the members claims they had breached the rules by failing to call a tender for each project and not accepting the lowest bid for seven projects - thereby costing AHTC an extra $2,794,560.
The members said they appointed LST Architects for seven projects even though it charged higher fees as they found that Design Metabolists was "significantly less efficient than LST, resulting in project delays to the detriment of the residents".
They noted that AHTC had called a tender around September 2012 to appoint consultants to a panel for a period of three years.
LST Architects and Design Metabolists - the only two firms that made bids - were appointed.
AHTC then entered into separate agreements with each firm to provide certain services at pre-agreed rates for three years, they said.
The tenders and contracts committee was chaired by Mr Singh, the current chairman of AHTC. Ms Lim is Workers' Party (WP) chairman, Mr Chua was a former member of the WP Youth Wing executive committee, while Mr Foo was WP deputy organising secretary and a candidate in Nee Soon GRC in the 2015 General Election (GE).
The members contend that "there was no longer an obligation to call tenders for consultancy services for each of the 10 projects" as AHTC had complied with the requirement under the Town Councils Financial Rules and called a tender for consultants to be on the panel.
They also noted that the former Aljunied Town Council had appointed four firms, including Design Metabolists, to a panel of consultants from April 1, 2009, to March 31, 2012. Despite having pre-agreed rates for its panel, the town council chose to ignore these rates and awarded Design Metabolists three projects based on rates in fresh quotations or tenders, they said.
They said these projects were awarded to Design Metabolists before the 2011 GE, and AHTC had inherited them after Aug 1, 2011.
They added that the committee's role was limited to vetting tendering specifications drawn up by the managing agent, evaluating bids received and awarding the tender.