Malaysia PPI Presentation

8/8/2019 Malaysia PPI Presentation

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Mr. Kumaresan KaruppiahGovernment Procurement Division

Ministry of Finance Malaysia

Asia Pacific Procurement Partnership Initiative (PPI)

1st East/Southeast Asia Sub-Regional Meeting

MINISTRY OF FINANCEMALAYSIA

PROCUREMENT REFORM

PROGRAM OF

MALAYSIA



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GP PRINCIPLES :

1) Public Accountability 4) Open & Fair Competition

2) Transparency 5) Fair Dealing

3) Value for Money

GP POLICIES :

1) Policy & Preferences for Bumiputera in Government Procurement

2) Local Content/Product/Services Usage Policy in Government Procurement

3) Imported Product Procurement Policy via Free on Board

4) Offsets Policies and Technology Transfers

Direct Purchase/Direct Appointment

Below RM50,000

- Open to all. Registration with MOF is not requiredSupplies &Services

WorksBelow RM20,000

- Open to Class F Bumiputera contractors

Quotation

i) Above RM50,000 to RM100,000 - Open amongst to Bumiputera companies/manufacturers

ii)Above RM100,000 to RM500,000 - Open to Bumiputera & Non Bumiputera companies/manufacturers. Margin of Preference (MOP) for Bumiputera to be applied

i) Above RM20,000 to RM200,000 (Without Schedule of Rates) - Open to Class F Bumiputeracontractors

ii)Above RM200,000 to RM500,000 - Open to Class E contractors

Supplies &

Services

Works

Rotation/Ballot

Above RM20,000 to RM100,000 (With Schedule of Rates)

- Open to Class F Bumiputera contractors

Works

Tender

Above RM500,000

- Open to Bumiputera & Non Bumiputera companies/manufacturers.

- Margin of Preference (MOP) for Bumiputera to be applied

Above RM500,000

- Open to Class A/B/C/D contractors, based on respective threshold value of class

Supplies &Services

Works

GP REG

IME

Note: Registration with MOF/PKK/CIDB is required unless stated above2



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Contractors/Consultants

- Cost overruns

- Inefficiency, lack of commitment- Delayed projects

(definition of sick projects: delay exceeding 2

months or 20% of schedule)

- Sub-contracting

- Prices quoted too low leading to variation

orders

- Quality of works not satisfactory

KEY CHALLENGES IDENTIFIED



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Contractors/Consultants (Cont’)

- Financial/cash flow problems

- Unable to secure Performance Bonds- Too dependent on Government

- Fraud/corrupt practices

- Lack of professionalism

> Failure to advice properly

> Failure to supervise> Inexperienced

> Poor/Over designing

> Not completing studies on time




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Government

- Poor project management

- Lack of technical capacity/experience- Poor coordination

- Delay in payment

- Fraud/corrupt practices




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- Supply & Services > eProcurement*

> eBidding*> System developed by Commerce Dot ComPt. Ltd. under BOT

* fully implemented nationwide

- Works > National eTendering Initiatives (NeTI)*

* in pilot stage

E-PROCUREMENT STATUS



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eProcurement will achieve RM10 billion worth of procurement value by 2010 onwards

RM23.2b worth of procurement valuesince 2000 to Dec 2009

2,509 Procurement Offices eP-enabled

69,567 eP-enabled Suppliers

RM 3M RM 77MRM 316M

RM 1,089M

RM 2,006M

RM 3,857M

RM 9,093M

RM 6,017M

RM 10,000M RM 10,000MRM 10,000M

LPO 44,306

LPO 107,033

LPO 805,046

LPO 514,292

LPO 900,000 LPO 900,000LPO 900,000

LPO 170,169

LPO 326,641

LPO 11,016LPO 295

0

2,000

4,000

6,000

8,000

10,000

12,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Millions

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Value (RM) Number of LPO

Note :

Year 2000 (No Of LPO : 13 Transaction Amount :RM0.04m)

Year 2001 (No Of LPO : 36 Transaction Amount :

RM0.07m)



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“Jury Award” under “G2B Initiative of The Year”

Among 10 Finalists under “Best of

eGovernment & Services” Category

Among 20 Finalists out of 158 submissions under“Anugerah Inovasi Perkhidmatan Awam

(AIPA)” CategoryANUGERAH KUALITISEKTOR AWAM 2009

2009

eBidding Module has been awarded and earned recognitions in manyaccolades at national and international levels



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• PO adminfocused

• Orderexpediting

• Compliance

• Price focused• Bidding &

Negotiating• Delivery &

Quality

• Orderefficiency &

controls• Supplier

involvementsinimprovements

• Systemintegration &efficiency

• BusinessIntelligence

• Mature Supplierrelationships

• Stakeholderpartnerships

• EnterpriseResource andInventoryManagement

• Objectivedrivendecisions

Transactional Commercial Proactive Strategic Class-Leading

Value

• eP has delivered tremendous change in Government procurementfrom merely modernisation of transactional activities towards a

responsive Government reflecting value-for-money procurement.

• eP will continue to be enhanced and will play a strategic andprominent role in managing Government funds.

Tim



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- Training of Trainers (TOT) by MOF

- Training conducted by National Institute of Public Administration (INTAN)

- Training conducted by Ministries themselves

- Overseas study visit

PROFESSIONALISM & TRAINING INITIATIVES



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- Review of;> Treasury Instructions (revised in 2008)> Treasury Circular Letters (> Treasury Central Contracts Circulars

LEGAL REFORMS



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Guidelines & Procedures

No. Title Remarks

1. Treasury Instruction Revised on 21 July 2008

3. Treasury Circular Letter on Guidelines InGovernment Procurement Management onTender

Effective on

24 April 2008

2. Treasury Circular Letter on Threshold andConditions of Direct Purchase for Supply &Services

Effective on

19 December 2007

4. Treasury Circular Letter on Changes OnThreshold Value And Quotation Procedures

Effective on

24 February 2009

5. Treasury Circular Letter on Threshold Values,Authority And Responsibilities Of Agencies’

Tender Board

Effective on

1 September 2009

6. Treasury Circular Letter on Disciplinary

Actions on Companies & Consultant FirmsRegistered Under MOF

Effective on

23 July 2010

LEGAL REFORMS



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OTHER INITIATIVES

- Industrialized Building System

> Cleaner environment> Lower dependance on foreign workers

- Green Procurement> Just embarking> Energy saving> Environmental friendly> Energy Performance Contract

- Transparency/competitive bidding

> MyProcurement Portal> Integrity Pact



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Malaysia PPI Presentation