Is ‘open Request for Proposal’ an open tender? — Joshua Woo

FEBRUARY 28 — In today’s interview with Penang Chief Minister Chow Kon Yeow, the BFM interviewer asked about the allegation that the Request for Proposal (RFP) used to award the Penang Transport Master Plan was not an open tender.

It is very unfortunate that such misinformation is being propagated by certain NGOs and critics against the project. The chief minister has rightly replied that the RFP used for the project was “an open tender by any definition.”

There are several types of open tender. Each type is employed according to the scale and limitation of the project.

Let’s say you are hungry and desire a burger. Regular open tender is like going to the pasar malam and coming back with the cheapest burger.

RFP on the other hand is like holding a contest, and inviting all the pasar malam burger stalls to participate. The stall that makes the tastiest burger and at the best price — but not necessarily the cheapest — gets the prize.

The main difference between the two is that price is the primary consideration in a regular open tender whereas other factors come into play in RFP.

RFP allows bidders to offer their own proposals, with room for innovation. This tendering method was first employed by the Penang state government in 2010 to develop landmark and restore heritage sites.

Goh Ban Lee, a former associate professor at Universiti Sains Malaysia, has this to say about RFP:

“I find the RFP idea very refreshing and interesting. If it is left to state planners or architects, it will only be one design. Generally, planners working in the civil service, as government officers, follow the normal procedures and plans and rarely take risks.

“However, by opening it up to the private sector, it will provide a myriad of ideas and, with competition, the bidders strive to give their best shot — and the sky is the limit to their innovation… This is new thinking, it… gives the state government the pick of the best proposals. Ultimately, the state government decides and picks on the best options offered.”

RFP can be either closed or open. Closed RFP is like holding a contest where you only invite one burger stall to participate. No need to guess who’s the winner. No alternative to be considered or compared.

Open RFP, on the other hand, is an invitation to anyone in the market to bid or tender for the job. It is competitive, as the submitted proposals will be evaluated with alternatives.

World Bank uses open RFP for its global meetings, management programs, data centre, digital entrepreneurship, and many others. Open RFP is sometimes used interchangeably with the phrase “open tender” by other international institutions such as the United Nations (UN). In UN’s Development Programme’s procurement notice, “open tender” is bracketed as “RFP.”

“Open request for proposal tender” is similarly employed by a Queensland government‘s project and the National University of Singapore Society. Whether it is Penang Transport Master Plan, World Bank, UN, Australia, or Singapore, open RFP is internationally recognised as open tender. Penang state government employed open RFP for Penang Transport Master Plan to look for the Project Delivery Partner. Fifty-five local and overseas companies expressed interest, with six submitting proposals through the open RFP.

The consultancy and audit firm KPMG was appointed to provide independent evaluation of the six proposals for their technical expertise and funding model. The delivery partner was appointed based on the evaluation and recommendation. As the chief minister said, this is by any definition an open tender.

*This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail.