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The Kuala Lumpur Class F Bumiputera Contractors’ Association is disappointed with Penang chief minister Lim Guan Eng’s move to allow for government procurement contracts worth more than RM50,000 to be secured on an open tender basis. They are calling him to review his decision, hoping that the other states controlled by the “Opposition” would not follow suit. By Jennifer Gomez, NST Online 25 March 2008.
Association president Ahmad Awang said under the existing system, Class F contractors were entitled to contracts worth between RM100,000 and RM200,000 through the tender process while projects below RM100,000 were secured through balloting. These projects are typically given out by the Prime Minister’s Department, the Public Works Department or the local council.
“Capping the limit at RM50,000 and allowing for other contractors to bid for projects worth up to RM200,000 would reduce our chances of getting these projects. Just last week, some 600 contractors put their names down for 30 projects in one of the government departments that allocate these jobs,” he said.
As it stands, times were tough for Class F contractors. “On average, we make 10% of the contract sum, so if its RM200,000, that means we make RM20,000. But we hardly get such big projects and on top of that, we only get between one to two projects on average for the whole year.
“So if the cap is now brought down to RM50,000 for us Class F contractors, how do we feed our families on RM5,000 per year?” he said.
Ahmad labelled Lim’s decision as a means to “meet his manifesto objectives” but labelled it unfair as it sacrificed the interests of Class F contractors.
“The RM50,000 cap was in place more than 20 years ago. Since then, it has been gradually increased given the rising cost of building materials and labour,” he said.
Ahmad said that they were also planning to propose to the government to increase the cap to RM400,000. “As it is, we are already burdened with the problem of having too many contractors in the class F category. Of the nearly 40,000 members, only about 18,000 are active. The rest are either part-timers or brokers. Ideally, there should only be 13,000 contractors under the Class F category,” he said.
Class F contractors have come under fire for shoddy workmanship but maintained that they were not the ones solely to be blamed.
“Often, we get intermediaries coming to us and asking us to allow them to use our license to apply for a project with the promise that they will hand us the job when they get it. But upon getting it, they tell us that they might as well do it themselves because it is not worth our time. They are the ones that do a bad job and give us a bad name,” he said.
On why these Class F contractors agreed to allow these third parties to use their licenses in the first place, Ahmad replied: “They need to find a livelihood, so if this person can promise us a job, we allow him to use our license, all in the hope of getting the project.”
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