Request for proposals is not open tender

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This is the third article in a series to explain why Penang State Government should commission an independent review of the SRS proposed Penang Transport Master Plan (PTMP).

Dr Ahmad Hilmy, Associate Professor, USM. Technology cluster — transport system and Dr Lim Mah Hui is a former professor, international banker and Penang Island city councillor.

Malaysia’s new federal government is reviewing all mega projects with dubious economic benefits and highly inflated costs.

Prime Minister Dr Mahathir Mohamad and Finance Minister Lim Guan Eng have reiterated that projects not based on an open competitive tender system are vulnerable to abuse and corruption, and hence must be reviewed.

Our question is whether the “Request for Proposal” (RFP) method used by the state to award mega infrastructure projects such as the Penang transport masterplan, as well as the undersea tunnel and three ‘paired’ highways to Consortium Zenith Construction Sdn Bhd, count as open tender. The selection of SRS Consortium as the project delivery partner was made through a request for proposals (RFP).

An apt answer to this may derive from none other than Gamuda founder Koon Yew Yin himself. According to Koon, the best way to evaluate open tenders is for a government to follow the guidelines established by the World Bank.

“Firstly, the government must engage a reputable engineering consulting firm which has experience with similar projects to put up a proposal and to open the project bidding to all contractors to tender,” he says.

“All the contractors must be prequalified based on both their technical and financial ability. All contractors must submit tenders conforming to the original design so that the cheapest tender can be selected. If all the contractors are prequalified, the government tender board has only to look at the tendered price. Always award the contract to the contractor who submits the cheapest tender assuming that all the other criteria are met. It is important not to allow anybody from the government to negotiate with any contractor to avoid corruption.”

Some state governments have awarded mega projects based on RFP and claimed that they are open tenders. We need to distinguish clearly between the two as they are not the same or even equivalent. The two terms should not be used interchangeably.

In open tenders, all parties bid based on the same specifications provided by a client. The award is given to the bidder with the lowest price, other things being equal.

However in an RFP, a client does not provide a standard detailed plan or technical specifications for a project for parties to bid on. Often the client only has an approximate idea of a project they desire. They then call for a tender in the form of an RFP, leaving bidders to submit different proposals for the client to select. No two proposals submitted under an RFP are similar.

Hence there is no standard yardstick to evaluate the different proposals. At best a ranking system is used but the client has absolute discretion to choose the one it desires. The weightage to rank a certain sector in the proposal is subjective such that this form of procurement may be prone to rigging or abuse. A favoured proposal may be selected without clear and transparent justification.

In RFP, bidders are not placed on a level playing field. The criteria for bidding under the RFP are not transparent or necessarily consistent. Clearly, RFPs are not open tenders, and will not give taxpayers value for their money.

Infrastructure projects should be by open tender. The RFP should only be used when the government would like to invite creative solutions to a problem. Creative financing solutions should be avoided as it brings other problems with it.

There is a special need for an independent review to be made on the SRS plan because through the RFP process, not only did the SRS plan deviate substantially from the Halcrow Penang transport masterplan, the costs ballooned from RM27bn to RM46bn.

We therefore call for reviews on all large projects that have not been awarded based on open tenders. The public needs to be assured that projects proposed for their future good have been awarded to the rightful and deserving contractors.

READ MORE:  Penang Forum meets Council of Eminent Persons, urges review of RM46bn mega transport project
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Ho Wan Lai
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Ho Wan Lai

Is Dr Lim MH following JK Rowling’s with his many parts story telling just like Harry Potter series to keep the concerned audience in suspense mode?
If Penang Transport Plan is criticsl then should just reveal all the negativities once and for all to get the rakyat informed immediately otherwise it may backfire as some may view DrLim of seeking serialised attention.

Henry Thia
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Henry Thia

Slowly release news like striptease lah, to keep you stimulated.

Norman
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Norman

Only 4 out of the 28 Russian fighters jets owned by the Royal Malaysian Air Force (RMAF) are able to take to the skies, says our Defence Minister Mohamad Sabu.

The RMAF had 18 Russian-made Sukhoi Su-30MKM and 10 MiG-29 jetfighters.

https://www.thestar.com.my/news/nation/2018/07/31/mat-sabu-only-four-out-of-rmaf-28-russian-fighter-jets-can-fly/#tXlQsR7DgPfiur8E.99

BB resident
Guest
BB resident

Our neighbour’s RSAF celebrated its 50th anniversary with an array of latest (functional) jet fighters:
https://www.youtube.com/watch?v=bmuQyE7VF-o
Mat Sabu must take note how He inherited junk fighters from Hishamudin.

XiaoHua
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XiaoHua

Ahmad, Lim and Anil make up Muhibbah Trio.

BB resident
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BB resident

Najib Labur RM80Juta Dana Khazanah Jual Pakaian Dalam Wanita Dalam Talian?

Got RFQ or not?

tunglang
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tunglang

Comes GE, politicians morph into beggars!
After getting voted, these same politicians ‘choi die gong koi’ (who cares you stupids).
Time to ‘teach’ them a … lesson – … these arrogant recalcitrants.

BB resident
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BB resident

Keep calm, enjoy Penang street food, hygienic or not:

Orang Bunian
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Orang Bunian

Food can enjoy anytime, but this PTMP is not to be overlooked at our own expense.

Orang Bunian
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Orang Bunian

tunglang now cannot access this blog!
This is the message upon clicking url:
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Your browser sent a request that this server could not understand.
Size of a request header field exceeds server limit.

gag online? Anil pls answer.

Orang Bunian
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Orang Bunian

Via VPN, brother.

quan
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quan

GEORGE TOWN (THE STAR/ASIA NEWS NETWORK) – The High Court has given the prosecution until Sept 3 to decide whether to proceed with the corruption charges against Finance Minister Lim Guan Eng. This came after the prosecution asked for a month to deliberate on a letter of representations submitted by the lawyers of Mr Lim and businesswoman Phang Li Koon to review their charges. During Monday’s (July 30) court proceedings, where Lim was not present, counsel Ramkarpal Singh told the court that the representations dated July 6 had been submitted to the Attorney-General’s Chambers. High Court judge, Justice Hadhariah Syed… Read more »

quan
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quan

Penang gov does not seem to be bother at all those were repeating over and over, again and again.
Penang Forum should instead apply for a court injunction to stop all those nonsense rather than keep talking.

Ho Wan Lai
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Ho Wan Lai

Penang Forum should cooperate with Consumer Association Penang and more NGOs to be a stronger force to be reckoned with. Who knows you all can later evolve into a political party.

Hwaway
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Hwaway

Never ending story.

bigjoe
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bigjoe

Ahmad Hilmy and Lim Mah Hui , first the quote Halcrow report, then they question Halcrow report. Please, it has become nonsense by both sides. They also way too self-serving when they argue – When did anyone promise to solve traffic problem with Highways alone? Like it or not, even if they build all the trains and tax all the cars like in Singapore, highways will still need to be build, the PIL included.