AT a time when “public procurement law has become well established as an independent field of law governed by its own rules” – complex though they may be – Malaysia does not have a specific legislation to govern the government procurement process.

Government procurement processes in Malaysia are largely governed by what Baker McKenzie’s Public Procurement World (PPW) calls treasury instructions and treasury circulars (treasury instruments) issued by the Finance Ministry.

PPW duly notes that the treasury instruments do not have the force of law.

However, there are legislations that contain provisions that apply to certain aspects of government procurement such as: 

• the Financial Procedure Act 1957, which provides for, among others, the control and management of the public finances of Malaysia.
• the Government Contracts Act 1949, which provides for the making of contracts on behalf of the federal and state governments.

Singapore, on the other hand, has a 25-year-old legislation called the Government Procurement Act 1997 (GPA), which came into force on January 2, 1998. The GPA was enacted to give effect to the “Agreement on Government Procurement” – done at Marrakesh on April 15, 1994, and as amended by the protocol done at Geneva on March 30, 2012 – and other international obligations of Singapore relating to procurements by the government and public authorities.

Under the GPA, a number of subsidiary legislations are made, among others:

• Government Procurement Regulations 2014;
• Government Procurement (Application) Order; and
• Government Procurement (Challenge Proceedings) Regulations.

The above applies to “contracting authorities”, which is defined under section 2 of the GPA to include any ministry or department of the government, organs of state and statutory boards. The list of designated contracting authorities is set out in the subsidiary legislation, namely the Government Procurement (Application) Order.

Singapore’s legislation embodies the government’s commitment to the following principles:

• openness and fairness – suppliers should be given equal access to opportunities and compete on a level playing field in order to ensure that the best offers possible are received;
• transparency – all stages of the procurement lifecycle should be open and transparent and the objectives, criteria and procedures associated with the procurement should, as far as possible, be made known to suppliers;
• value for money – the selected supplier should offer the best value for money (the optimal balance of benefits measured against the total cost of ownership); the tender does not need to be awarded to the lowest bidder.

Australia too has government procurement legislation at federal, state and local governments. At the federal level, the key legislation on government procurement is the Public Governance, Performance and Accountability Act 2013 (PGPA Act). 

Government procurement regulations are further contained in the Commonwealth Procurement Rules and the Public Governance, Performance and Accountability Rule 2014, which are made under the PGPA Act.The central principle of government procurement in Australia at all levels is value for money. Other procurement principles deal with encouraging competitive markets, adhering to non-discriminatory purchasing practices, accountability for purchasing decisions, and using efficient, effective, ethical and transparent procurement processes – the same principles enshrined in Singapore’s GPA.

Given the absence of rules and regulations having the force of law in Malaysia to govern government procurement, the announcement by Prime Minister Anwar Ibrahim that a Government Procurement Bill would be tabled by year-end is most welcomed.

The Pakatan Harapan government first mooted the bill in 2019, but it did not materialise.

A Malaysian Government Procurement Act is long overdue. But better late than never. – June 17, 2023.

* Hafiz Hassan reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.