MOF: Govt can now directly award projects worth up to RM50,000 to contractors during Emergency, up from RM20,000 limit

February 21, 2021

© Provided by Malay Mail The federal government has now temporarily increased the ceiling amount of contracts that can be awarded directly without open tender to contractors to RM50,000 during the Emergency period that is set to last until August, up from the previous maximum value of RM20,000 per project. ― Picture by Sayuti Zainudin

KUALA LUMPUR, Feb 20 — The federal government has now temporarily increased the ceiling amount of contracts that can be awarded directly without open tender to contractors to RM50,000 during the Emergency period that is set to last until August, up from the previous maximum value of RM20,000 per project, a Treasury circular has shown.

In a letter dated February 16 which was posted on the Finance Ministry’s official portal for Treasury circulars, the Finance Ministry informed more than 30 senior civil servants — including secretary-generals of other ministries — of the new update.

“For the information of YBhg Tan Sri/Datuk Seri/Dato’ Seri/Dato’ Sri/Datuk/Dato’, the Cabinet meeting on February 3, 2021 have agreed for the threshold value of work procurement for the direct award method for Grade G1 and G2 contractors be increased from RM20,000 to RM50,000 during the Covid-19 pandemic emergency period to expedite the procurement process and generate economic activity,” Datuk Zamzuri Abdul Aziz from the ministry’s government procurement division wrote on behalf of the Treasury secretary-general.

For direct award of government projects up to RM20,000, the contractor has to be a local contractor registered with the Construction Industry Development Board (CIDB) as Grade G1 contractors and be registered in the relevant categories and specialisations, apart from having the necessary certificates listed in the letter.

Under the new limit which allows for the direct award of contracts valued between RM20,000 to RM50,000 comes, the letter listed additional requirements, including for the appointment of the contractors to be taken in turns to ensure projects are not focused on the same contractor.

The additional conditions include the formation of a committee with a quorum of three persons to be chaired by the head of the implementation agency or any other authorised officers to consider the direct appointment of contractors for projects valued between RM20,000 to RM50,000.

The contractor that has been appointed directly for such projects also has to be disclosed on a notice board or publicised through a government department’s website, the letter said.

The same letter said the relaxation of the government’s procurement process for projects worth up to RM50,000 takes effect from February 16 during the “Covid-19 pandemic emergency period” until August 1, or any new date when the Emergency ends if announced by the government.

“Besides that, Ministries/Agencies also have to ensure the appointment of contractors are made within the effective period of this letter, but the works implementation by contractors can exceed that period,” the letter said.

In other words, this would mean that the direct award of such projects up to RM50,000 without going through an open tender process can be done within the Emergency period, but the contract can be for works that will be completed after the Emergency period.

Listed as recipients of the letter were also Chief Secretary to the Government Tan Sri Mohd Zuki Ali, Auditor General Datuk Nik Azman Nik Abdul Majid, and the Malaysian Anti-Corruption Commission (MACC) chief commissioner Datuk Seri Azam Baki.