Lapses found in MCI framework for procuring creative services

A framework administered by the Ministry of Communications and Information (MCI) for procuring creative services had various lapses, the Auditor-General's Office (AGO) said in its report.

The AGO said it had audited the whole-of-government period contract and framework agreement on creative services for communications campaigns that was administered by MCI, after it received complaints.

Under the agreement, public-sector agencies can procure creative services from a panel of vendors, at rates awarded by MCI.

The AGO noted that MCI did not get approval from the appropriate authority for variation in this contract - the agreement had been approved at a value of $174 million for three years from October 2018.

The contract was subsequently extended by six months, but the total procurement made under the agreement as at Dec 31 last year was $322.74 million, nearly twice the initial approved value.

In response, MCI said part of the increase was due to a surge in communications campaigns, such as the Merdeka Generation Package and those related to Covid-19 - on vaccination, jobs and safe management measures - which could not have been accounted for in 2018.

The AGO also said that when MCI called a tender to appoint the vendors, it did not clearly state the unit of measurement for certain items that tenderers were supposed to quote for.

This led to different vendors using different units of measurement when public agencies procured their services - for instance, some vendors used "per man-hour" to measure manpower services instead of "per person" as MCI had intended.

During the tender evaluation, "MCI did not ascertain whether the tenderers had quoted on a like-for-like basis for items where quotes submitted by tenderers varied significantly", the AGO added.

It flagged how the highest rates submitted by tenderers were 43 times to 92 times the lowest rates for some items. For instance, one tenderer submitted a bid of $900 for an item while another put in a bid of $82,800, or 92 times more, for the same item.

The AGO added that MCI did not monitor the spread of contracts awarded to the 39 vendors on the panel. The top vendor was awarded 38 per cent of the total value, or $124.06 million, with the next two vendors getting 7 per cent ($22.9 million) and 6 per cent ($20.04 million) respectively.

For the top six public-sector agencies by procurement value that tapped the MCI framework, the AGO said the same top vendor accounted for 14 per cent to 95 per cent of the awards made by these agencies.

The AGO stressed the importance of having a good spread of contracts to encourage vendors to bid for future tenders, and in turn ensure public agencies can continue to enjoy competitive prices in the long run.

It flagged how national water agency PUB also had lapses in how it assessed whether the cost of third-party items for campaigns was reasonable, among other things.

In its audit of the Ministry of Social and Family Development's (MSF) Community Care (ComCare) Endowment Fund, the AGO found lapses in control over cash and supermarket vouchers at two social service offices. Officers did not carry out the required checks on cash and supermarket vouchers, but signed off the logbooks indicating they had done so.

The checks were important as they served as independent checks on another officer, who had sole custody of the key and passcode to the safe containing the cash and supermarket vouchers, said the AGO.

The AGO also uncovered management lapses in MSF's social service network system, which is used to administer ComCare assistance schemes. It said that there were delays in removing unneeded accounts for 60 per cent of the accounts that it test-checked.

Not promptly removing unneeded accounts and their access rights could result in unauthorised activities like changes to the quantum of assistance given to applicants, it said, adding that information on ComCare applicants and beneficiaries could also be compromised.