The former PAS-led Kedah government bypassed the tender process by deliberately breaking down its contracts to smaller parcels, according to the third instalment of the Auditor-General's Report 2012 tabled in Parliament yesterday.

Zooming in on the state's Majlis Perbandaran Langkawi Bandaraya Pelancongan (MPLBP), the report listed three instances where projects worth more than RM500,000 were not given out through tender.

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According to Treasury rules, tenders must be called for all contracts above RM500,000, while contracts valued between RM50,000 and RM500,000 can be done through quotation and those below RM50,000 can be done through direct negotiation.

In an example, the report said MPLBP had given out a project to upgrade a solid waste disposal site worth RM749,350 in Kampung Belanga Pecah, through quotation instead of the required tender process.

This was done by breaking down the project into three parcels and bringing their values down to below RM500,000 each.

Another instance was a RM752,080 project to supply and install lights at Taman Awam, which was funded by the federal government through the Langkawi Development Authority (Lada) and executed by MPLBP.

MPLBP gave out the project to a contractor through a quotation instead of tender, thereby violating Treasury rules.

‘Against Treasury rules '

"However, on Jan 23, 2013, the superintending officer had issued instructions to the contractor to reduce part of the work, after being reprimanded by Lada for not abiding by the procurement process.

NONE "The project value was reduced by RM253,280 to RM498,800. MPLBP's action of reducing the total procurement value to avoid a tender is against current Treasury rules," the report said.

In a reply MPLBP justified that the work was urgent and had to be completed before the Langkawi International Maritime and Aerospace Exhibition (Lima).

The non-compliance was similarly seen in the granting of a contract to upgrade a market in Awam Kelibang, which was worth RM685,800 but broken down into two parcels to avoid a tender.

They were broken down into a RM470,500 job to upgrade the market's building and another RM188,300 contract to upgrade the market's drains.

Furthermore, the audit report pointed out, MPLBP did not have a technical evaluation committee and a price evaluation committee that are necessary to review companies competing in a tender process.

"Disciplinary action should be taken against officers proven to have broken down procurement contracts to smaller parcels," the report said.