[UPDATED] Govt's Pre-Q procurement method lacks transparency, Auditor General finds

New Straits Times

7 days ago

KUALA LUMPUR: The auditor-general has recommended that the government discontinue the pre-qualification (Pre-Q) procurement method.
Auditor-General Datuk Wan Suraya Wan Mohd Radzi said open tenders were better to ensure transparency and accountability in procurement.
The recommendation was made following findings in the Auditor-General's Report 2/2025, which uncovered manipulation and a lack of transparency in the Pre-Q process introduced by the Finance Ministry in 2023 and 2024.
"Some companies that failed to meet the initial evaluation criteria were still invited to participate and were even selected during the final round," she said in a statement.
The report audited the use of the Pre-Q method in several ministries, including the Energy Transition and Water Transformation Ministry, the Rural and Regional Development Ministry, and the Works Ministry.
At the Energy Transition and Water Transformation Ministry, a tender process involving the procurement of a government office building project saw the selection of a contractor who had failed to meet the requirements in the first stage of screening.
The audit found that a company which had not completed its Pre-Q application properly, including failing to provide mandatory supporting documents, was still allowed to advance to the second stage of evaluation.
Despite receiving a "Not Recommended" status from the technical evaluation committee, the company was still invited to participate in the second stage and was eventually awarded the project.
At the Rural and Regional Development Ministry, a tender process involving the procurement of a government office building project saw the selection of a contractor who had failed to meet technical requirements in the first stage of screening.
Despite not complying with the technical capability criteria, the project was still allowed to advance to the second stage of evaluation.
The ministry's internal justifications for allowing this were not in line with the Treasury's Pre-Q procurement circulars.
Wan Suraya warned that such deviations could result in "non-compliant decisions that jeopardise the credibility of procurement exercises."
The auditor-general concluded that the Pre-Q procurement method, as implemented, had failed to meet its original objectives of screening for quality and improving competition.
"Some companies that failed to meet the initial evaluation criteria were still invited to participate and were even selected during the final round," said Wan Suraya.
She recommended that the Finance Ministry consider abolishing the method altogether and reverting to the open tender approach to safeguard the integrity of government procurement.