The Government has set aside $5 million over the next 11/2 years to further support organisations that award contracts based on quality rather than just the tender price, the National Trades Union Congress announced on Wednesday.

Under the new Progressive Wage Incentive scheme, which replaces the Best Sourcing Initiative, companies may receive grants of up to $150,000 or 10 per cent of contract value if they buy services from providers who adopt the Progressive Wage Model and show good performance standards. Some 1,500 local low-wage workers from the cleaning, security and landscape sectors are likely to benefit.

This was announced on Wednesday at a seminar on best sourcing practices held at the Employment and Employability Institute (e2i) in Jurong.

Mr Gilbert Tan, chief executive of e2i, said in his opening address that these initiatives aim to help companies "move away from a vicious cycle of a downward spiral of wages, to a virtuous cycle that focuses on skills and productivity." Interested companies can approach e2i for more information on the scheme.