Secretary for Financial Services & the Treasury Christopher Hui today announced that the Government Logistics Department (GLD) has implemented six quick-win measures, as proposed by the Task Force on Review of Government Procurement Regime to plug loopholes in government procurement procedures as soon as possible.

Mr Hui pointed out that while the incident on the procurement of bottled drinking water clearly involved suspected fraudulent acts by a particular company, it also revealed that the perceptiveness and alertness of the relevant officers in conducting due diligence checks and addressing potential fraudulent acts could not adapt to the current business environment and were obviously below reasonable expectations.

He said: “The task force and I consider it essential to tackle the problem at source through reshaping the work culture, enhancing the capability of procurement officers in exercising due diligence and empowering officers with sufficient authorities on the regime level. This will help ensure greater effectiveness for officers in handling procurement matters in future, not only serving as advocates of fair competition, but more importantly, as gatekeepers for government procurement.”

The six quick-win measures focus on three aspects, namely institutional change, enhancement of cross-departmental information exchanges and reshaping of work culture.

They are to promulgate internal guidelines to stipulate specific requirements on due diligence checks; set up a Procurement & Stores Management Audit Section to step up inspections; revise Standard Terms & Conditions of Tenders & Contracts (STC) to strengthen vetting and contract management power; establish a digital database for information sharing; strengthen staff training to guard against fraud; and build a culture of ownership at work.

The Financial Services & the Treasury Bureau has directed the GLD to implement these six measures immediately.

The task force expects to publish a review report before the end of this year to put forward solutions that address both symptoms and root causes, with a view to further enhancing the Government's procurement work.

Separately, the GLD is reviewing in detail the tender requirements of the contract for the supply of bottled drinking water to government offices.

In order to keep tabs on the market pulse prior to tendering, the GLD published a market research notice on its website today, inviting interested suppliers to submit responses in a month's time. The GLD aims to launch the tender exercise for the supply of bottled drinking water to government offices on Hong Kong Island and parts of the outlying islands, with the relevant responses taken into account, by the end of this year.

Mr Hui also released today the management letter submitted by the Audit Commission on its review of the tender exercise for the procurement of bottled drinking water. He thanked the Audit Commission for providing numerous recommendations, the directions of which align with the six quick-win measures and the long-term enhancement measures being explored by the task force. The task force will examine the management letter in detail to refine the long-term enhancement measures for announcement before the end of the year.

Mr Hui also announced that Administrative Officer Staff Grade A1 Alice Lau had been invited to conduct a disciplinary investigation on the human errors identified in the management letter.

The Task Force on Review of Government Procurement Regime was established in August to review the existing government procurement regime and procedures arising from the incident on the Government's procurement of bottled drinking water under a cross-bureau and cross-departmental approach.

The task force is chaired by Mr Hui, with members including the Permanent Secretary for Financial Services & the Treasury (Treasury), the Director of Government Logistics, and representatives from the Civil Service Bureau, the Commerce & Economic Development Bureau, the Development Bureau and the Department of Justice.