IDEAS calls for full disclosure of directly negotiated contracts

Kuala Lumpur, 25 August 2020 - The Minister of Finance revealed yesterday that the Pakatan Harapan (PH) government approved 101 projects amounting to RM 6.61 billion through direct negotiations. The Institute for Democracy and Economic Affairs (IDEAS) welcomes the recent revelation on the basis of public accountability but urges the government to be fully transparent by releasing the complete list of awarded contracts.

The wide usage of open tender was part of PH’s manifesto in Buku Harapan and thus it is important that political parties be held accountable for their promises. IDEAS believes that procurement has to be competitive to ensure the best value for the government, and direct negotiations should only be used under specific circumstances once all competitive methods have been exhausted. Therefore, it is paramount that the list be revealed to ensure that government procurements were in compliance with existing rules and guidelines as outlined in the Treasury Circular.

Currently, there is poor disclosure for directly negotiated projects, evident from the underutilisation of the MyPROCUREMENT website. The Treasury Circular requires government agencies to record and consistently update information on government procurement into the GPIS system which is integrated with the website. Our assessment of the website indicates that only 314 projects were recorded with the latest project being from 2017. This means that no projects were updated during the PH government. Analysis of the Auditor General’s report from 2014-2018 also shows most of the audited directly negotiated projects were not uploaded to the website.

Commenting on the website, IDEAS CEO Tricia Yeoh said, “The limited disclosure on the website does not allow for meaningful public scrutiny and demonstrates a lack of transparency. Direct negotiation is a valid method of procurement but it is more prone to abuse. For that reason, the disclosure will minimise such risks. The MyPROCUREMENT website can be improved but the current government should use this platform to disclose directly negotiated contracts. Such disclosure will ensure fair competition and full accountability.”