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LCQ5: Appointment of consulting firm to help publicity work for health care reform consultation
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    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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