Encouraging Best Sourcing Practices

Mr Christopher de Souza asked the Acting Minister for Manpower what efforts have been taken to encourage service providers, like companies in the cleaning sector, to adopt best sourcing practices rather than cheap sourcing.

With more companies outsourcing their non-core functions, the Government has been working closely with our Tripartite Partners

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to promote best sourcing.

Recognising that the business and employment practices of service providers are shaped by the outsourcing practices of service buyers, the Tripartite Committee for Low Wage Workers and Inclusive Growth (TriCom) has focused on encouraging service buyers to outsource responsibly and adopt best practices when doing so.

To help businesses successfully implement best sourcing, the TriCom released the updated Tripartite Advisory on Best Sourcing Practices in 20128, which contains examples of best sourcing practices that can help draw out better outcomes from service providers and improve the welfare of their workers. This was accompanied by a step-by-step best sourcing implementation guidebook, which included examples of clauses that can be inserted in tender requirements, scoring templates for tender evaluations and sample employment contracts that service buyers can use to implement best sourcing. A Workforce Skills Qualification (WSQ) training module was also rolled out to build up the best sourcing capabilities of procurement officers.

Beyond these initiatives, NTUC's Unit for Contract and Casual Workers (UCCW) provides companies with grants of up to $150,000 under the Best Sourcing Initiative (BSI) funding scheme to help defray the initial costs of incorporating best sourcing into their procurement practices.

In addition, the Government has put in place accreditation and grading schemes that make it easier for service buyers to identify the better service providers and to promote higher service standards among providers. For example, NEA's Clean Mark Accreditation Scheme was enhanced in 2012 to encourage cleaning companies to aim for continuous productivity improvement and to adopt better employment standards. Government agencies have also taken the lead to only procure from accredited cleaning companies, as well as security agencies with at least a "B" grading in the Security Agency Grading Exercise conducted by the Singapore Police Force.

There are real benefits to be gained through best sourcing. Service buyers can enjoy enhanced service quality, while service providers can attract and retain the manpower they need through providing better employment terms and conditions. Furthermore, the basic employment rights of workers can be safeguarded, while procurement practices that tend to depress workers' wages can also be curtailed. This is especially important for low-wage workers who

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are particularly vulnerable to cheap sourcing.

Going forward, we will continue to work with our Tripartite Partners to promote wider adoption of best sourcing practices.