Replies to LegCo questions
LCQ5: Appointment of consulting firm to help publicity work for health care reform consultation
Following is a question by the Hon Albert Ho and a reply by the Secretary for
Food and Health, Dr York Chow, in the Legislative Council today (March 12):
Question:
The Stores and Procurement Regulations 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. It has been reported that with only one written quotation received
from a firm, the Government has recently appointed the firm to provide
consultancy services for the work relating to public consultation on health care
reforms. The value of the contract is around $1,200,000, and the firm was set up
by the Press Secretary of the last Chief Secretary for Administration. In this
connection, will the Government inform this Council:
(a) among the consultancy service procurement activities conducted by the
Government in the past, whether cases to which the justifications for inviting a
written quotation from only one contractor in the above incident likewise apply
were rare;
(b) of the number of occasions in the past three years on which the Government,
with less than five written quotations received, appointed contractors to
provide consultancy services with a contract value over $50,000 but not
exceeding $1,300,000, together with the policy area(s) and contract value
involved, as well as the justifications for awarding the contract without
obtaining five written quotations in each case; and
(c) whether it has reviewed if the appointment of the consulting firm with only
one written quotation received is in compliance with the principle of fairness,
and if it will give members of the public the impression that the Government
practises cronyism and transfers interests to former principal officials or
their subordinates; if a review has been conducted, of the results?
Reply:
Madam President,
First of all, I would like to clearly explain what the Stores and Procurement
Regulations (SPR) 280 entails and how the Food and Health Bureau (FHB) has fully
complied with the regulation in the process of appointing a consulting firm to
help arrange for public communication and publicity in connection with the
public consultation on health care reform.
The Financial Services and the Treasury Bureau (FSTB) pointed out that according
to SPR 280, 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.
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 work on public communication and publicity for the public
consultation exercise. It could deepen people's understanding of 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 constraints, we decided to
invite and appoint a service supplier to provide consulting service by way of
inviting a single quotation. This had been approved by an authorised officer.
Prior to the appointment of the consulting firm, FHB gave a briefing to the firm
on the content of the consultation document and the rationale behind in December
2007. FHB 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 FHB considered that the consulting firm's proposal and quoted price met the
FHB'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.
My reply to the question raised by the Hon Albert Ho is as follows:
(a) and (b) 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 purchasing information. According to FSTB, they do 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.
(c) In the procurement of consultancy services, the most important
considerations are the capability, service quality and experience, etc. of the
prospective service suppliers regardless of how many service suppliers are to be
invited to provide quotations. After receiving quotations and proposals from
service suppliers, we will examine the content of their proposals and the quoted
prices to see if they meet the requirements for the service. The same set of
criteria was applied in the appointment of the consulting firm to help with the
public communication and publicity work for the consultation on health care
reform. The appointment is therefore in compliance with the principle of
fairness and does not involve any cronyism or any transfer of interests as the
Honourable member alleged.
Ends/Wednesday, March 12, 2008
Issued at HKT 14:41
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