Quotation is a fundamental business behavior and it appears always during procurement. However, there is some difference between private sector and the government in procurement. This makes quotation for the TVP a headache sometimes. In this article, BizMagnet TVP consultant shall glance the government procurement, explain the difference and consequential problem. We will attempt a solution at last.
Standard Procurement Process
The HKSAR Government requires departments, statutory bodies and government-funded projects to follow strictly the Standard Procurement Process. The Process requires certain degree of competition according to the project size. For example, there must be certain number of quotation or even an open tender for project over certain cost. The philosophy is to make sure the procurement fair and go to the lowest price.
Taxpayer money should be spent fairly. No favouritism can exist the public domain. However, it is totally different in the private market. The relation between the supplier and the company boss is critical for SMEs’ procurement. Moreover, the government just pays to the supplier one-way. While it is much more complicated in the business world. Companies and suppliers are often strategic partners. It also happens for listed companies which are under strict governance. That’s why we say business is art.
TVP Bid rigging
Due to the above difference, TVP applicants come to a problem: they already choose one supplier but have to provide more quotations as required by the Technology Voucher Programme. It is not common to request suppliers lost the job to provide quotation still. Therefore some TVP agencies manipulate the whole process by providing not only consultancy service but also arrange quotations that are more expensive. This can fulfil the requirement of the standard procurement process.
This manipulation is trivially offensive as bid rigging under the “Competition Ordinance”. It is also contrary to the “non-collusive certificate” signed by the supplier. If the applicants know the manipulation, they may be liable as the misconducted TVP agencies. It goes worse when the suppliers act as a TVP consultant. These agencies may operate a TVP fraud and the applicants who need government fund may lose.
Further reading: Government Fund Fraud – You will pay for it
Quotation is necessary for TVP
The solution is obvious if we can understand the fundamental difference between the private sector and the government. Under the principle of detail quotation, the HKPC (TVP secretariat) allows flexibility to applicants to explain all action. If companies encounter difficulties during the application, their TVP consultants should also assist to provide professional advice.
There is no free lunch. Businessmen understand that better than anyone. BizMagnet TVP consultant is always helpful.
Further reading: TVP Application Guide