The National Environment Agency (NEA) said it requires the operator of Jurong West Hawker Centre to ensure there is open and fair competition, as well as a transparent, value-for-money system, when procuring cleaning services for the centre.
It also pointed out how the operator's parent company Koufu has been upfront about its relationship with GreatSolutions, which provides cleaning services. The directors of the companies are brothers.
NEA was replying to a query after the relationship was highlighted by some netizens last weekend.
In a Koufu initial public offering prospectus dated July 11 this year, it was stated that it obtains dishwashing, cleaning, landscaping and vector control services from GreatSolutions for several of its food centres.
NEA noted that the document made it clear that GreatSolutions was an "interested person".
The document went on to state that Koufu will enter into contracts for the provision of such services, or electrical services, by the mandated interested persons only if it is "satisfied that the rates or prices from (them) are not higher than the most competitive quote provided by other third-party service providers for comparable services".
According to the prospectus, such contracts will be entered into only after obtaining competing quotes from at least two unrelated third-party service providers, and taking into account other relevant factors.
All such transactions are subject to a rigorous review process and entered into on an arm's length basis.
HAWKER MANAGEMENT, which operates Jurong West hawker centre, on its procurement process.
Koufu's chief executive is Mr Pang Lim. His younger brother, Mr Pang Pok, is director of GreatSolutions. Both men are in their 60s.
Koufu also listed another company, Brightlink Electrical, as an interested party. It provides electrical services to Koufu's food and beverage outlets and is partly owned by another brother, Mr Pang Pong San.
Hawker Management, which operates Jurong West Hawker Centre, said it sources for competitive quotes for all procurement of goods and services, adding: "All such transactions are subject to a rigorous review process and entered into on an arm's length basis."
According to previous reports, the Pang brothers started their first coffee shop in Yishun in 1991. Their late father ran various businesses and their mother was identified as a school janitor. The couple had seven children.
Separately, NEA also said it was present at a discussion which Hawker Management held with six tenants on Tuesday. The hawkers were among 12 who submitted a petition in August against having to pay customers 20 cents each time a tray is returned.
Hawker Management described the meeting as cordial and effective. The NEA spokesman said: "NEA continues to monitor the situation closely, and to support both sides to try and work out an amicable solution as soon as possible."