Govt: Revised tender, financial limits set to roll in Q2

Govt: Revised tender, financial limits set to roll in Q2

The Development Bureau is set to implement revised tender limits and financial criteria for approved contractors bidding for public projects during the second quarter of 2013 after reviewing the responses collected during a recent consultation.

In response to an enquiry from Construction Post, a bureau spokeswoman said 42 responses including two from trade associations were received during the consultation period that ended about a month ago.

The bureau did not say what the responses were.

“[Development Bureau] is studying the views from the stakeholders for fine tuning the proposal. The revised proposal is targeted to be implemented in the second quarter of 2013,” the bureau spokeswoman said in an email statement.

In a consultation paper issued last November, the bureau proposed revising the tender limits and financial criteria for companies on the List of Approved Contractors for Public Works.

This was because since the current limits were last set in June 2009, the government noted a rising trend in tender prices for public works so the tender limits had to be revised to reflect the market values and conditions of the works.

According to the building works tender price index compiled by the Architectural Services Department, the index stood at 1467 in the third quarter of 2012 up 7.2 percent compared to the same quarter in 2011.

When compared to the figure for the third quarter in 2009, the increase is 32 percent.

“There is a need to review the tender limits to ensure tenders are invited from the appropriate groups of contractors capable and qualified for the respective works,” the consultation paper said.

For example, the bureau proposes that confirmed contractors in group C, the highest category, can bid for any public contracts exceeding HK$185 million each in value, up from the current level of HK$75 million.

For group B contractors, the proposed limit is HK$185 million, up from HK$75 million while for group A contractors, the proposed limit is HK$75 million, up from the current HK$30 million.

Currently there are 258 contractors listed in the list of approved contractors.

Apart from revising tender limits, the consultation proposed revising upwards the minimum amounts for employed capital and working capital of contractors.

“With the higher tender limits, the capital requirements of the fixed minimum [Employed Capital / Working Capital] will also be substantially increased,” the paper said.

The paper gave two options for implementing the minimum capital requirements

In response to the consultation, the Hong Kong Contractors Association said it welcomed more work opportunities for small and medium sized firms but it objected to the proposals.

“We are concerned that the current proposed increase in minimum capital requirements and the percentage requirements on annualized outstanding works are far too high and to an extent that would have serious impact on the smaller contractors. HKCA therefore does not support the current proposal,” the association said in a statement issued through its public relations firm.

One contractor’s quantity surveyor said to Construction Post: “In principle, I agree to increase the limit, but I also worry that it will disqualify some group A contractors [if] they are unable to increase their working capital.”

Danny Chung

 

 

 

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