Government Construction Projects Awarded to Local and Foreign Engineering Companies

Er Dr Lee Bee Wah asked the Minister for Finance (a) in the last three years, how many Government construction projects have been awarded to local engineering companies and how many to foreign contractors for projects above $200 million; and (b) how many of these contracts have been awarded to the lowest tenderers.

The Building and Construction Authority (BCA) operates a Contractors Registration System which registers construction companies under various work categories and financial grades. All construction companies must be registered to qualify for the award of public tenders. This means that construction companies are first prequalified to ensure they meet certain standards before they can be awarded Government contracts.

In general, higher value construction contracts require companies to meet higher standards in terms of financial capacity, technical capability of the company and its personnel, company certifications and relevant track record. For example, companies bidding for construction contracts above $200 million will only compete amongst other companies which have attained similar or higher technical and financial standards.

For construction contracts above $200 million awarded in the last three years, two-thirds were awarded to the lowest price bidder.

As a signatory to the World Trade Organization’s Agreement on Government Procurement (WTO-GPA) and various free trade agreements, Singapore is required to ensure fair competition and non-discrimination between foreign and local suppliers. Our procurement regime is, therefore, an open one where suppliers compete based on their ability to meet tender requirements, regardless of nationality. This applies also to competition to be on the prequalification list that I just referred to. For these reasons, BCA does not track the nationality of the ultimate owners of companies awarded tenders.