Checks in place to assess contractor's financial status

Media Replies 28 Jan 2015

We refer to Dr V. Subramaniam’s letter “Any checks on bidders for construction projects” (Straits Times, 22 Jan).

Dr Subramaniam had shared his views in reference to the article “Braddell Rd project hits bump as work comes to a halt” by Senior Correspondent Christopher Tan (20 Jan, Straits Times). We would like to point out several factual errors in the article. First, Hexagroup Pte Ltd posted a post-tax loss of $4,605 in 2007, not “$4.6 million”; and the company’s post-tax profits in 2006 amounted to $50,116, not $50.1 million.

The Building and Construction Authority (BCA) administers the Contractors Registration System (CRS) to serve the public sector’s needs for procurement of construction services.  Firms interested in bidding for public sector construction projects must meet stated requirements, including financial capacity, technical personnel, management standards and track records before they can be registered. Each registered firm is graded upon these criteria to be eligible for projects of various types and scale. For contractors who qualify for a higher tendering limit, they must meet the additional requirement of submitting audited accounts yearly and continue to meet the financial requirements.  The tender evaluation process for construction projects is managed by individual public sector agencies.

When the Land Transport Authority (LTA) called the tender for the widening of Braddell Road in 2012, Hexagroup’s submission offered the best value amongst the tender proposals. The company had a good track record,  having completed several road improvement  projects for LTA between 2007 and 2012. At the point of tender submission for the Braddell project, LTA saw no indication that Hexagroup was suffering any financial difficulties. LTA’s project management team also monitored the project closely after the award of the contract. The company was able to meet the project schedule and there was no sign of financial distress until works slowed down visibly in late 2014. Since then, LTA’s project management team has been discussing the various options with Hexagroup so that the road works can continue.

We thank Dr Subramaniam for the opportunity to clarify.

Helen Lim (Ms)
Director, Media Relations
Land Transport Authority

Tan Chee Kiat (Mr)
Director, Procurement Policies Department
Building and Construction Authority

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