value exceeds $1 million the advice of the Central Tender Board is required and requests for the issue of single tenders with a value exceeding $1 million are required to be routed through the Director of Government Supplies who will forward them with his recommendation to the Deputy Financial Secretary for consideration by the Central Tender Board.
70.
To obtain economy and the best possible value in such a non-competitive environment, bearing in mind that the value of the stores and services required may be substantial, it is essential that the contract conditions and the price offered by the supplier are critically examined and adequately negotiated, as the supplier will understandably use his unique position to maximize his
return.
71.
Recently I reviewed six cases involving expenditure ranging from $2.8 million to $94 million where stores or services were obtained under single tender arrangements and I noticed a number of weaknesses in the manner in which the contracts were processed. These weaknesses arose, in my opinion, because the Government stores regulations prescribing the procedures to be followed by departments when calling for single tenders do not include guidelines for negotiating the best possible terms from the tenderer. I observed that:
the need for conducting negotiations with the tenderer was not in all cases recognized by the controlling officers and in some cases negotiations for better contract terms were carried out only at the request of the Central Tender Board;
in some cases, objective yardsticks to assess the reasonableness of the tender prices were not used, or better yardsticks could have been used;
in two cases, adequate research into areas such as market conditions and price trends, which would have facilitated negotiations with the tenderer, was not carried out prior to the negotiations;
in the case involving a total expenditure of $94 million, there was no participation by the Government Supplies Department during the negotiations with the tenderer, and therefore specialist procurement knowledge was not used; and