ENG-2005 — Page 99

The Economy | 69

Government Procurement and Supplies Management

Hong Kong, China is a signatory to the World Trade Organisation Agreement on Government Procurement (WTO GPA). Government procurement is undertaken in accordance with the principles of

the principles of openness, transparency, fairness, public accountability, value for money and non-discrimination. Public tender procedures are widely used for general and common items. 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 prequalification exercise before tendering to ensure that they are capable in terms of financial and technical capability and reliability in performance.

Purchases of goods and related services with values above predetermined thresholds are undertaken centrally by the Government Logistics Department (GLD). These goods and related services are normally obtained by competitive tendering, without 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. GLD helps users to get the best-value purchases by formulating a specific strategy for each type of purchase based on market conditions, focusing on value-for-money and cost-effectiveness.

To facilitate sourcing and market research, GLD also maintains and regularly updates the Supplier Lists which comprise local and overseas suppliers for different categories of commodities and services.

Notices for public and prequalification tenders are published in the Government of the HKSAR Gazette and local newspapers. GLD informs firms on the Supplier Lists when it is arranging purchases and, in the case of procurements covered by WTO GPA, it also informs consulates and overseas trade commissions. To allow easy access by suppliers outside Hong Kong, GLD also puts its tender notices and related information on the Internet. The Electronic Tendering System, which was introduced in April 2000 and enables subscribers to download tender documents and to submit tender offers by electronic means, has been running smoothly with the number of subscribers rising steadily.

In 2005, GLD awarded contracts with a total value of $3.62 billion, and bought items from 32 different territories. Major purchases included pharmaceutical products, computer equipment and software, transport services, specialised vehicles and spares, food and beverages and telecommunication equipment and spares.

Supplies of essential and emergency items are purchased in bulk and held in the Government Logistics Centre of GLD in Chai Wan. User departments can place orders for these items when required. To avoid stocking and double handling, other commonly used items have been gradually transferred from being handled centrally by GLD to being handled by term contractors who deliver directly to government departments on an as-and-when-required basis. The changeover was completed by the end of 2005. As a result of this change, the total value of stock items acquired