MR CHAN KIN-POR (in Cantonese): Thank you, President. The tendering and procurement systems in Hong Kong have come under criticisms for many years. There are problems with both government outsourced services and project tendering process. The “lowest bid wins” principle has even given rise to a lot of malpractices. Just now, Mr Tony TSE has mentioned in detail various major problems, including quality, project delays, cost overruns, and so on.
As a matter of fact, tendering systems are also widely adopted overseas, but most of them work well. In recent years, many countries have even stipulated by legislation that tendering exercise must also take into account social factors, and should be open to small and medium enterprises (“SMEs”). In comparison, the problems in Hong Kong are even more obvious. In my view, the problems lie mainly in the inflexibility of the system, which the Government has failed to deal with. Today, I am very grateful to Mr Tony TSE for moving this motion, and hope that the new-term Government, after taking office, can innovate and reform the existing system, thereby leading Hong Kong to build a fairer society.
At present, government tenders will set out a series of technical requirements. When tenderers meet such requirements, usually the one with the lowest bid price wins. In recent years, the “lowest bid wins” principle has been strongly criticized by society, especially when it comes to outsourced services, such as cleaning or guarding work, as tenderers often resort to “cut-throat bidding” in order to win the bid. However, the ultimate victims are frontline workers. Therefore, in 2019, the Government revised the criteria for outsourcing services by reducing the weighting of price, requiring that the weighting of technology should be no less than 50%, while the weighting of price should be no more than 50%. As for the effectiveness of the revision, The Ombudsman considers the approach positive. However, there are also comments that the root of the problem remained unresolved as raising the weighting of technology may not necessarily meet the needs of society.
Therefore, I support the original motion and all the amendments today. Apart from taking into account the technical and price factors, the tendering system should also keep abreast of the times and introduce elements of social benefits and environmental protection, so as to protect the grass-roots frontline workers and the social environment. In fact, foreign countries have long been concerned about the defects of “lowest bid wins”. For example, the Government of the United Kingdom (“UK”) enacted the Public Services (Social Value) Act in 2013, mandating the government to consider the economic, social and environmental issues when vetting and approving public service contracts, so that the bid price and social factors can be fully considered and balanced, and SMEs and social enterprises can participate in the bidding. Given that the tendering system in Hong Kong has long been criticized by society, I opine that, instead of making patchwork fixes, it is better to overhaul the entire system once and for all. The new-term Government should draw on the experience of places such as the UK and put forward a system that balances prices and society, so as to convince the public of the Government’s determination to carry out reform.
Furthermore, some organizations hold that some government outsourced services do not have to be outsourced, and there is no problem for the Government to handle it itself, such as cleaning services. But of course, how about the management ability of the Government? Will there be many problems as well? This is something for us to consider. Therefore, I believe the Government should think about it seriously, and this direction can also be considered. This proposal is worthy of study.
In addition to the problem of “lowest bid wins”, Hong Kong has also been criticized for the cost of many projects being too out of touch with reality. In fact, as works contracts are highly specialized professional and complex, it is often difficult for outsiders to make a correct judgment. However, it is useful for Hong Kong to study the experience of Singapore. According to available information, the Singapore Government will guide the tendering work in a more proactive way. The responsible departments will first conduct market research to gauge the market pricing, and then invite tenderers to attend the briefing session. Some reports have even pointed out that the relevant departments will touch base with the tenderers or even bargain with them before inviting tenders. As a result, there are few cases in Singapore where the project costs are out of touch with reality, and the projects are also subject to active monitoring by the government. Well, is Singapore’s practice suitable for Hong Kong? We can get the answer only after research. However, this positive attitude is worth learning by Hong Kong.
Thank you, President.