Finance Ministry Investigates Bid Fixing Claims

Minister of Finance Keat Chhon has ordered an in-house investigation following allegations of impropriety over procedures surrounding the recent tendering of bids for a lucrative government contract to supply uniforms to the ministry’s Customs Department.

The investigation into the bid pro­cess for the contract to supply a purported $1 million in uniforms to the Customs and Excise De­part­ment was sparked following complaints to the Ministry of Finance from four local companies and reports in Khmer-language newspapers.

“Inspectors need to do an in­spec­tion to make sure whether the bid followed the ministry’s procedures or not,” Finance Ministry Undersecretary of State Ngy Tayi said on Tuesday.

“Information will be released after the inspectors finish their in­vestigation,” said Ngy Tayi, adding that the check was ordered by Keat Chhon on his departure Tues­day to an Asean meeting in the Philippines.

Bids for the uniform contract closed Friday; however, four local companies have said they were locked out of the process and that the bidding should be re-opened.

“If we can’t compete freely, the business will fail,” said Phatt Serey, owner of the SNL Import Export Co Ltd.

According to Phatt Serey, the Finance Ministry failed to give proper notification for bid tenders, publishing notification just two days before the official deadline.

Notification was also published in an obscure “special edition” of the Kampuchea Thmey (New Cambodia) Daily newspaper on July 30, while the deadline was Aug 1, Phatt Serey claimed.

“This is an abnormality,” said Phatt Serey, adding the contract was worth more than $1 million.

“Previously, the Finance Ministry has advised other ministries to disseminate bidding broadly for local companies to compete… at least 7 days to 10 days before [deadline],” Phatt Serey wrote in his letter.

A staff member at Kampuchea Thmey said on Tuesday the special edition newspaper was distributed free-of-charge in Phnom Penh on July 30 at the same time as a regular edition of the newspaper was also on newsstands.

Chhay Vuth, director of the Ministry of Finance’s Procurement Department, said on Tuesday he was not involved with the procurement of the uniforms, though all contracts above the value of $12,500 should pass through his department.

“This case did not go through my department, so I do not know,” he said.

“But if the ministry does not want my department to check, it is not against the rules,” he added.

The ministry’s Committee for Qualifications, Evaluations and Contracts, which reportedly handled the uniform bid procedure, could not be contacted for comment on Tuesday.

A high-ranking official close to the issue said that the level of bid-fixing was crippling the country.

The practice known in Khmer as “netting the tender” involves groups of companies with inside information, and usually family contacts, conspiring to keep competitive bids out of government tenders.

“It is like a mosquito net put around the tender to keep everyone else out,” the official said.

Every group inside the net keeps their bids high and “very close so they can jack-up the price. People inside the net are safe and enjoy the profit,” the official said.

Several senior officials will be known by future generations as the “Suhartos” of Cambodia, he added.

(Additional reporting by Phann Ana and Kim Chan)

 

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