Random Discourse – Town Councils & Action Information Management

” For procurements where only a single bid is received, the Ministry of Finance (MOF) will require officers responsible to provide additional justifications to the approving authority within each agency.

The officers must set out why they consider the single bid competitive or reflective of market prices, before a decision is made to award such a contract. “

– Deputy Prime Minister Tharman Shanmugaratnam (in Parliament), 13 Aug 2012

Some time in June this year, it was revealed that the National Parks Board [NParks] placed a tender for 26 Brompton foldable bicycles which cost a total of S$57,200. The cost of each bicycle (S$2,200) naturally upset many, who felt that they are too expensive and a waste of public funds. The Ministry of National Development [MND] subsequently conducted a probe and in the end an officer from NParks was suspended from duty. An internal audit also uncovered some discrepancies which suggested “the possibility of bias in the procurement”, although the discrepancies were inconclusive by themselves. I won’t go into too much details over this matter, since my objective of bringing up this matter was to serve as a reminder that the government went on to tighten rules on its tender processes and Deputy Prime Minister [DPM] Tharman Shanmugaratnam spoke in Parliament on this matter. I would like to draw your attention in particular to what the DPM said about single bids in a public tender (see inset).

The reason I brought this up is because the so-called co-ordinating chairman of the 14 PAP town councils finally crawled out of his hole to answer to the matter about a contract between the town councils and a company (owned by Peoples’ Action Party [PAP] members) over the sale and leaseback of computer systems. Teo reviewed that there was an advertisement placed on the Straits Times on June 30th 2011, and subsequently five companies collected the tender documents, the only bidder was the PAP-owned Action Information Management [AIM].

To avoid accusations of nitpicking, I would let the matter of whether that one single advertisement for just one day would have garnered enough attention pass. However, even though town councils aren’t under the purview of the Ministry of Finance, what the DPM said about single bids makes a lot of sense. As such, can Teo actually find out and tell us why in the absence of competition was the tender awarded to AIM? How exactly did whoever made the decision to award the contract, consider AIM’s single bid competitive or reflective of market prices? How can we be assured that there has been no “possibility of bias” in the decision? I am sure even if it meant each of us paid only 5-cents into the development of this software, everyone still have a right to know. I would expect Teo Ho Pin to answer these regardless whether he is involved in the decision making to award this contract or not. Teo Ho Pin certainly has a responsibility to clear all the doubts since it was his own party who demands that everything be above board and white-than-white. He should answer all these questions to the people’s satisfaction and not dodge them!

Frankly, I would have expected no contracts to be award to a single bid after merely one tender exercise. Even my employer would have asked for 3-bids to ensure that it got the best pricing for some items it is purchasing, even when some of them don’t even cost more than a few hundred dollars. That’s not forgetting that the National Environment Agency [NEA] will only award a stall with only a single bid after two tender exercises. Why is a tender for such contracts involving large sums of money not subjected to the same stringent requirements?

That aside, AIM was said to have offered to buy the software for S$140,000 and manage the system at a monthly fee of S$785 per town council, for an initial term ending on Oct 31, 2011. No one could have miss the blatantly obvious fact that 14 PAP town councils would have paid AIM S$131,800 (S$785 per month per town council) within a year. In short, AIM practically got the Town Council’s software for a song (if not for free) because it would have technically recovered 94% of its cost in a year. For a $2-company which we know very little about – for e.g. the number of staff and the terms of the software maintenance contract, this is ‘arguably be the best business tender deal of the century’ as Mr Leong Tze Hian mentioned in his post. Perhaps even Temasek Holdings should learn a thing or two from AIM to not only stop its recent bleeding, and make even better returns than the average of 17% a year.

Jokes aside, I doubt it was that lucrative. And that brings up another question. As an IT person, I am not interested in whether AIM disputed (or refuted) Aljunied-Hougang Town Council’s [AHTC] claims that it had to fight for a service extension to continue using the existing town council management system. What I am more interested is the details on how a relatively unknown $2-company like AIM service the contract it has gotten from the town councils. The company seems rather secretive too, because even a search in Yellow Pages website turned up nothing and on the Green Book website I gave up after 10 pages of search results.

It was said that this company didn’t even have its own office and shared the address with a whole lot of others. Assuming that it is all legitimate and not just a shell-company, where does AIM station all its staff? How much manpower does it actually employed? Just for this contract alone, is there any real people actually dedicated to software patching, to deal with bugs in the system, and also to update it? How often is any form of servicing done? In fact, I am even more curious knowing that the town councils maintained the hardware which would suggest either another company or the town councils’ own in-house IT does backups and ensure operational continuity. I know how often infrastructure (be it networks, servers or even desktop support) clashes with developers, programmers and application support. As such, where is the line drawn here? If the case is whereby the infrastructure side took on much of the support burden of this management system, then it would suggest that AIM got a fat contract without needing to do much.

I can think of a few other possibly more capable local SMEs besides AIM, because it appears to be a practically unknown company. The main stream media such as the Straits Times should have done more to inform us about this company by now. Unfortunately, it never seem to have the journalistic instinct to follow up on a lead to keep its readers informed but often spend more time beating up on alternative media…

2 comments

  1. Alan says:

    If we do some mental calculation, S$132k pa is roughly equivalent to S$11k per mth. So if AIM is an empty shell company, does it mean that the S$11k per month is channelled to pay for the PAP directors’ fees ?

    One just can’t help thinking whether PAP operate just like UMNO and will PAP come clean about the audited annual accounts of AIM ?

    • Grievous says:

      That’s one of the problem. The other problem is almost no one in the local IT sector ever heard about AIM. We do not know what other companies they serviced (if any at all), and it doesn’t even have a real office address (even when I understood from my friend many used secretarial services in spite of having an office).

      It doesn’t help but give the impression that it is a $2-shell company and that this system is now actually funneled to this company for no other purpose other than the party itself to take control of an vital asset.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge
 

Spam Protection by WP-SpamFree