ENG-2000 — Page 103

THE ECONOMY

meet any calls on its contingent liabilities and enable it to cope with any short-term fluctuations in expenditure relative to revenue.

The Housing Authority, operating through the Housing Department, is financially autonomous. The Government provides the authority with capital and land on concessionary terms to build public housing for rent and for sale. The authority's recurrent expenditure, for clearances and squatter control is financed from the General Revenue Account.

A trading fund is a department - or part of one - providing services on a commercial or quasi-commercial basis through the operation of a separate accounting system. Unlike a vote-funded department, trading funds are allowed to retain revenue generated to meet expenditure in providing the services and to finance future expansion.

Government Supplies Department

Purchases of goods and related services required by government departments are undertaken centrally by the Government Supplies Department, which provides similar services to certain non-government organisations, such as the Hospital Authority and the Vocational Training Council. These goods and related services are normally obtained by competitive tendering, without giving preference to any particular source of supply, to ensure that users' needs are met at the best possible price, having regard to life-time cost and reliability of supply. Helping users to derive the best value in their purchases, the department formulates a specific strategy for each type of purchase based on market conditions, focusing on meeting requirements for high-value and critical items by cost-effective and reliable means.

Public tender procedures are widely used for general and common items. As a means to save administrative costs, invitations to tender or quote for low value purchases are normally confined to registered suppliers. Restricted or single tender procedures are used where open competitive tendering would not be an effective means such as in cases involving compatibility with existing equipment, or patented/proprietary items, or unforeseen urgency. For complex and critical purchases, suppliers may be required to undergo a qualification exercise before tendering to ensure that they are capable in terms of financial and technical standing and reliability in performance.

Tender invitations are published in the Government of the Hong Kong Special Administrative Region Gazette and four local newspapers and are mailed to suppliers registered with the department. Consulates and overseas trade commissions are also informed. To allow easy access by suppliers outside Hong Kong, the department also includes its tender invitations and related information on the Internet. As a further enhancement of services, an Electronic Tendering System was introduced in April, enabling subscribers to download tender documentation and to submit tender offers by electronic means.

In 1999-2000, the department placed orders of a total value of $6.55 billion, purchasing from 39 different countries. The major sources of supply were the United States, France, the United Kingdom, Japan and the Mainland. Major items of purchase included computer systems, pharmaceutical supplies, aircraft and spares, medical equipment and telecommunication equipment.

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