Replies to LegCo questions

LCQ18: Appointment of consulting firm to help publicity work for health care reform consultation

Following is a question by the Hon Emily Lau and a written reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (March 5):

Question:

The Stores and Procurement Regulations (SPR) 280 stipulates that for procuring consultancy and other services with a value above $50,000 but not exceeding $1,300,000, departments must obtain written quotations from not less than five contractors. In cases where it is not possible to identify a sufficient number of contractors to obtain the minimum number of written quotations required, approval should be obtained from an officer of rank not lower than Chief Executive Officer or equivalent before inviting written quotations from contractors. He should write a brief explanatory note on the decision in the file and record on file the particulars such as the names of the contractors contacted. In cases where less than five written quotations are received, the acceptance of the offer concerned should be approved by an officer of rank not lower than Directorate Pay Scale Point 1 or equivalent. I wrote a letter to the Secretary for Food and Health on January 28 to enquire why, with only one written quotation received, the Food and Health Bureau (the Bureau) had appointed the consulting firm set up by the Press Secretary for the former Chief Secretary for Administration to take up work relating to public consultation on health care reforms. The Bureau stated in its reply that the procurement had been made in full compliance with the above provision. In this connection, will the Executive Authorities inform this Council:

(a) when and on what basis the above provision was made, and of the number of occasions on which the Government invoked the provision to appoint consulting firms in the past two years and the relevant details;

(b) of the justifications for the Bureau's decision to invite a written quotation from only one contractor, and whether the Bureau can provide a copy of the brief explanatory note and particulars relevant to this decision as recorded on file;

(c) whether, prior to the submission of a plan by the contractor, the Bureau had provided it with a work outline; if so, whether it can provide a copy of the relevant document, its date of issue and the date when the contractor submitted its plan;

(d) of the rank of the officer who approved the acceptance of the offer concerned and when he gave the approval, and how long the entire procurement procedure lasted; and

(e) whether the Bureau has followed the provisions set out in SPR Chapter IA (Avoiding Conflict of Interest in Government Procurement), and how it will, when conducting procurement activities in the future, avoid giving rise to allegations that the Government differentiates between close and distant relationships in handling matters or transfers interests to certain persons?

Reply:

Madam President,

The Food and Health Bureau (the Bureau) earlier appointed a consulting firm to help arrange for public communication and publicity in connection with the public consultation to be initiated shortly on health care reform. The appointment procedures are in full compliance with the Stores and Procurement Regulations (SPR).

My replies to the question raised by Hon Emily Lau are as follows:

(a) The existing SPR have been in effect since December 2, 1997. SPR 280, which was modelled on section 218 of the already-revoked Store Regulations on procurement of services, sets out in greater details the procedures to be followed by bureaux and departments in the procurement of services so as to ensure that Government procurement is conducted in a fair and just manner.

In concrete terms, SPR 280 provides that bureaux and departments should invite written quotations from not less than five contractors for procuring services with a value exceeding $50,000 but not exceeding $1.3 million. If bureaux and departments find that due to limited supply in the market or other full justifications, it is not possible to invite the minimum number of quotations required or an invitation of less than the minimum number of quotations required has to be made, prior approval must be sought from an authorised officer before inviting quotations. After obtaining the quotation(s), approval from another authorised officer is needed for the acceptance of an offer. This requirement aims to ensure that the officer who selects contractors and/or approves the invitation of quotations from contractors is not the officer authorising the acceptance of the offer for that procurement.

Under the existing procurement procedures, Controlling Officers can, in accordance with the SPR, decide on their own to appoint a consulting firm for consultancy services with a value not exceeding $1.3 million and make a record of the relevant information. Hence, the Financial Services and the Treasury Bureau does not have readily available information on the number of occasions and details relating to the appointment of consulting firms by Controlling Officers on their own.

(b to e) Health care reform is a complicated issue with far-reaching implications. Members of the public must have a thorough understanding of the subject matter before the community could proceed to rational discussions with the view of reaching consensus. The appointment of a consulting firm could help the Government to plan its works on public communication and publicity for the public consultation exercise. It could deepen people's understanding on the subject matter, encourage them to engage in rational discussions and provide positive effects to build community consensus.

Given that this exercise is a complicated one, a consulting firm had to first understand the strategies and details of the public consultation on health care reform before it could submit a proposal and a quotation. Meanwhile, we must ensure that the details of the public consultation were kept confidential before publication and the service had to be commenced and completed within a very short period of time. Under these considerations and restraints, we therefore decided to invite and appoint a service supplier to provide consulting service by way of a single tender. This had been approved by an authorised officer.

Prior to the appointment of the consulting firm, the Bureau gave a briefing to the firm on the content of the consultation document and the rationale behind in December 2007. The Bureau also indicated its requirements and required the firm to submit a proposal shortly. Later that month, we received a proposal submitted by the consulting firm. After considering the proposal, another authorised officer of the Bureau considered that the consulting firm's proposal and quoted price met the Bureau's requirements. Hence, approval was given in January this year for the proposal to be accepted and for the consulting firm to be appointed as the service provider. Consultancy service by the consulting firm started right afterwards and is still ongoing. As the documents, work outline and proposal involved touch upon the strategy and content of the public consultation, as well as commercial information of the consulting firm, we are therefore unable to provide here a copy of these documents.


Ends/Wednesday, March 5, 2008
Issued at HKT 12:23

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