PETALING JAYA: The Auditor-General has flagged concerns over the government's selective Pre-Qualification (Pre-Q) procurement method, citing instances where companies that did not meet criteria advanced in the tender process.
The Auditor-General has recommended scrapping the Pre-Q method in favour of reverting to the open tender system.
The audit findings involved projects from three ministries: Energy Transition and Water Transformation (Petra), Works, and Rural and Regional Development.
According to the Auditor-General's report Series 2/2025, the Pre-Q mechanism was introduced by the Finance Ministry for project tenders in 2023 and 2024.
Under the Pre-Q process, companies that pass the initial screening are invited to participate in the open tender process at the second stage.
This method aims to ensure participating companies are competitive and capable.
"Based on audit findings, there is potential for manipulation and a lack of transparency in the selection process. Some companies that did not meet evaluation criteria in the first stage were still selected and evaluated in the second stage.
"Additionally, the procurement process exceeded the stipulated duration," the report stated.
In Petra, 154 companies were invited to bid for 25 projects, with six companies passing the first stage without submitting required documents.
Three were awarded Letters of Acceptance (LOA) for flood mitigation projects worth over RM811mil in Penang, Pahang, and Selangor.
For the Rural and Regional Development Ministry, no project list was provided during the first stage.
Of the 721 companies that participated, 485 (67.3%) were approved by the KKDW Procurement Board between Aug 7 and Oct 20, 2023.
The audit found that seven companies lacking financial capacity were invited to participate in the second round up to four times, with one company awarded a RM40.1 million road upgrade project in Tumpat, Kelantan.
The Works Ministry and Sabah Public Works Department (JKR) fully complied with the Finance Ministry’s directive, with 113 companies meeting criteria passing the first stage.
However, Petra and the Rural and Regional Development ministries did not comply with evaluation criteria, leading to ineligible companies being awarded LOAs.
Petra acknowledged that the list for Pre-Qualification was obtained through the Construction Industry Development Board’s (CIDB) system.
The Works Ministry noted an outdated database for the Pan Borneo Highway Sabah Phase 1B Project procurement, and plans to use the CIDB database for future projects to ensure data accuracy.
The Rural and Regional Development Ministry admitted the absence of a complete contractor register approved by the Finance Ministry.
The Finance Ministry committed to improving the tender process with guidelines for ministries, using the Electronic Government Procurement Application (eGPA) to enhance efficiency and decision-making.
The Auditor-General recommended strategic preliminary screening, specific project types, clear Pre-Qualification criteria, maximum timeframes, and an integrated company database to improve transparency and efficiency.
