06 July 2012

NParks's Brompton Bicycles — A Path Less Travelled

Singapore's National Parks Board recently bought 26 Brompton foldable bicycles costing $2,200 each for its officers to use on patrols.

NParks's tender notice set out the following specifications for the bicycles —
— Be foldable.
— Can be brought onto public buses and MRT trains.
— Have 16-inch wheels.
— Weigh between 11 kg and 13 kg.
— Have at least 6 speeds.
— Be provided with one year's warranty and free basic servicing.

Only one company — apparently not the agent or an authorised dealer for Brompton bicycles — submitted a bid, listing two models, with the Brompton bicycles being the cheaper alternative.

According to NParks, it proceeded with the purchase since the proposal met its specifications and it found the price to be reasonable after comparing with market prices at that time.

Minister for National Development Khaw Boon Wan said he accepted NParks's explanation.

This episode raises many questions, nevertheless.

What amount was originally budgeted for each bicycle and for the bicycles in total?  On what basis was the budget for the bicycles prepared?

What was the highest level in the Ministry of National Development that was aware of, and concurred with, the provision for the 26 bicycles in NParks's budget?  It is unlikely that the Minister or the Permanent Secretary overseeing a budget of $2.5 billion for FY2012 would have the time to scrutinise an approximately $60,000 detail in the budget.

What was the highest level in NParks that was aware of, and concurred with, the provision for the 26 bicycles in its budget?  It is unclear (though not improbable) whether the CEO of NParks overseeing a budget of $259 million for FY2012 would have the time to scrutinise an approximately $60,000 detail in the budget.

Were both the $2,200 price for each bicycle and $57,200 for the 26 bicycles within the approved budget?  If not, was approval obtained for the higher amount or amounts?  At that point, who in the Ministry of National Development and NParks became aware of this item?

How many brands of bicycles sold in Singapore were capable of meeting NParks's specifications?  Is it necessary for NParks's bicycles to have precisely 16-inch wheels and at least 6 speeds?

Was NParks aware of other brands of bicycles that were capable of meeting its specifications?

What is the economic life of the Brompton bicycles based on NParks's intended intensity and type of use?  The durability of an asset is not independent of the cost of acquiring the asset.

What is the expected cost of maintaining each of the Brompton bicycles based on NParks's intended intensity and type of use of the bicycles?  Both the cost of acquiring an asset and the cost of maintaining it over its economic life have to be taken into account when deciding which asset to acquire.

On what defensible basis did NParks arrive at the conclusion that the $2,200 price of each Brompton bicycle was reasonable?

Why did NParks not call a fresh tender after receiving only one bid, and proactively invite other known suppliers of foldable bicycles?  Was there an urgent requirement to procure the bicycles?

Was NParks aware that it was buying the bicycles from a supplier which is not an authorised dealer for Brompton bicycles and the consequences of its doing so?

Does NParks require only 26 bicycles for its officers to use on patrol or does it plan to buy more bicycles for its officers soon?

While $57,200 is a minuscule amount in the context of NParks's budgeted expenditure of $259 million for FY2012, does NParks apply the same mindset when managing its budget?

Perhaps, the Auditor-General should review NParks's procurement practices.

The new bicycles are said to enable NParks's staff to reach field sites directly and individually using public transport, and eliminates the need for an office van to take them and their bicycles to the various sites.  How much extra time will now be needed by NParks's staff to travel from their offices to their field sites (and return to their offices) by public transport?

What is the fate of the office van?  Will it become idle or redundant or will NParks somehow find some new use for it?

What is the fate of the driver of the office van?  Will he/she become redundant and retrenched or will NParks somehow find some new duties to occupy him/her?

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Updates

24 July 2012
After an internal audit, Ministry of National Development disclosed that it had uncovered some discrepancies which, although inconclusive by themselves, suggested the possibility of bias in the procurement process.  The ministry has decided that the discrepancies were significant and warrant further investigation.  The NParks officer responsible for the transaction has been suspended from duty.

25 July 2012
Ministry of National Development said that the matter had been referred to Corrupt Practices Investigation Bureau.

2 comments:

  1. Hi, let me try to answer some of your questions after doing some research.
    - there are a few brands of bicycles that fit nparks specs. wheel size determines how compact bicycle is when folded, which should be impt since the bicycle is meant to be on public tpt

    - bromptons are well known to be durable, an impt pt since nparks is buying them for heavy use, not recreational use

    - according to what i read, nparks did a market search, and found that $2.2k per bike is lower than market.

    - quotation need not be awarded to sole distributor, as long as parallel importer can supply the same gds at lower cost. length of warranty not a key issue unless nparks stated it in the first place.

    i have a few questions of my own...
    - why didn't diginexx and other bike companies submit a bid? the argument that govt agencies usually don't buy bikes is not valid since the police bought some not too long ago

    - is it necesaary to recall when there's one bid? if vendor puts in a bid in good faith, only to be told that quotation is recalled just because no one else came in, would it be fair?

    - if $2200 is too expensive for nparks officer, then what is an acceptable price range? $100, $500, $1000? how can an outsider know unless they are familiar with the work nparks officer does?

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  2. Here's how to handle the bullshit:
    - there are only a few brands that comply with the specs, specifically wheel size and weight range, which was written to knock out the competition;

    - Brompton bikes are fashion items, like Kate Spade handbags. Just check out their website and marketing pitch;

    - the authorised distributor already confirmed that a 25 to 30% discount is available for bulk purchase;

    - parallel importer does not provide better warranty or maintenance backup than authorised distributor, that's how they can offer lower prices;

    - why didn't others bid? The timing - during Chinese New Year holidays - made sure of that. And why the urgency to source the bikes?

    - one bid does not a comparison make. But of course, we are so used to only one candidate for PM;

    - very simple test: will the NParks user pay $2,200 if he has to use his own money? $500 will get you a quality branded bike, without the snob appeal of the Brompton, of course.

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