Procurement bill: Serious concerns over ministerial powers, lack of accountability

On Monday, 25 August, the Government Procurement Bill was tabled for its first reading in Parliament.

The bill contains 93 clauses with the stated aim of, among others, providing for the duties, accountability, governance and transparency in government procurement.

This bill comes after years of advocacy from civil society organisations demanding strong procurement regulations in light of the seemingly endless slew of procurement corruption scandals over the past decades.

However, the Center to Combat Corruption and Cronyism (C4 Center) notes with grave worry that this long-awaited bill fails to address key procurement issues and instead proposes extremely concerning provisions, among them:

• Granting almost unchecked powers of procurement approval to the Minister of Finance and state chief ministers
• Establishing an appeal tribunal and appeals process which is not independent of the executive
• Concentration of power in the registrar which may lead to abuse
• Several clauses that weaken oversight, accountability and the scope of the act
• Granting authorised public officers under the Treasury and state financial authorities wide investigative and enforcement powers that, in some cases, exceed police powers

A brief overview of these concerns is provided below. However, it must be noted that these are just some of the problematic provisions of this bill.

Finance minister’s huge powers

The bill grants extraordinary decision-making powers over procurement to the finance minister, with similar authority extended to state chief ministers.

Clause 10(1)(a), read together with Schedule 1 of the bill, grants ministers and chief ministers power to approve procurement contracts valued above RM50m for goods and services, and RM100m for works, with no upper limit.

Before making a procurement decision, the minister must compel the procurement board to provide a recommendation (Clause 13(2)), but is not bound by it. Clause 13(3) expressly allows the minister to disregard the board’s view, and Clause 13(4) makes the minister’s decision final and binding.

In contrast, the procurement board only approves contracts valued between RM500,000 and RM50m for goods and services, and between RM500,000 and RM100m for works (Clause 10(2)).

Board members are subject to conflict-of-interest disclosures and must not take part in the meeting and decision-making if they have an interest in the procurement (Clause 12(6)).

No such safeguards apply to ministers, despite their far greater exposure to corruption risks.

However, the minister also influences the procurement board as they play a role in establishing this body as well as appointing its members (Clause 11(1) and Schedule 2).

In any case, where the procurement board fails to make a unanimous decision on any matter (including a procurement decision), it will be referred to the minister for a decision (Clause 12(8)).

Historically, the Malaysian government has signed contracts worth billions in sectors such as defence – contracts which, under this bill, would fall squarely under the control of ministers and chief ministers.

Yet unlike procurement boards, which are bound by conflict-of-interest rules, these political officeholders face no such restrictions, even as they wield far greater authority.

Worse, they not only appoint members of the procurement board but also retain the final say whenever the board cannot make a decision. This creates a procurement regime where the minister is simultaneously rule-maker, gatekeeper and final arbiter – concentrating extraordinary discretion in one individual and eroding the very safeguards the bill claims to establish.

Non-independent appeal tribunal

A critical aspect of a strong government procurement act is the establishment of a body empowered to receive complaints on procurement, adjudicate disputes between the procuring entity and the appellant, and create legally binding decisions, including the revocation of contract award decisions.

The latter is especially crucial as the entire purpose of such a body would be rendered null and void if contracts conclusively made on corrupt grounds were nonetheless allowed to proceed. Such a body must be independent from the executive because complaints and disputes brought forward will necessarily involve the government.

However, the appeals process under the bill is under the direct influence of the minister. Under Clause 61(6), the minister determines how complaints are to be administered, the person that administers complaints, the procedure for objecting to procurement, and what can be objected to.

Under Clause 61(2), any person who is dissatisfied with any government procurement exceeding a certain approval threshold as determined by the minister may submit an objection to the procuring entity, and then a review by a review panel of the procuring entity. If they are still not satisfied with the decision of the review panel, they may appeal to the appeal tribunal.

Absurdly, under Clause 63, members of the appeal tribunal are also appointed by the minister. Clause 74 dictates that the appointment of the secretary of the appeal tribunal and other assisting officers is also carried out by the minister.

The provision states that the duty of the secretary is to carry out administration and management of the appeal tribunal, with no further clarification provided.

The bill’s appeals process is therefore anything but independent. It is designed, staffed and overseen by the very minister whose decisions may be challenged. From setting the rules of complaint, to appointing the tribunal members, to controlling its secretariat, the minister dominates every stage of the process.

This concentration of power strips the appeals mechanism of legitimacy, leaving businesses, civil society and the public with no genuine avenue to contest corrupt or unfair awards. Far from providing a check on abuse, the bill entrenches executive dominance.

Concentration of power in registrar

Under the bill, no supplier or contractor may participate in government procurement unless registered in a central registry overseen by the registrar of government procurement (Clause 17). This new position, appointed by the Treasury secretary general, would control entry into the procurement system.

From the outset, the registrar is an extraordinarily powerful figure, as they determine who has access to government contracts. The bill arms the registrar with broad discretionary powers, including the ability to:

• Approve or reject applications for registration
• Impose conditions on any registration as they see fit

These powers are paired with almost no safeguards. For suspensions, revocations or prohibitions, the only remedy available is for an aggrieved party to submit a written request for review within 14 days of notification (Clause 26). Even then, the bill does not oblige the registrar to respond, nor does it provide any independent avenue of appeal.

The bill therefore creates a registrar with sweeping powers to decide who may enter the government procurement system, but with almost no checks on how these powers are exercised.

With no clear guidelines, no binding duty to respond to appeals, and no independent avenue of review, the registrar’s office effectively operates without accountability. Such unchecked discretion opens the door to cartelisation, political patronage and systemic corruption.

Loopholes that override safeguards

Beyond the structural flaws outlined above, the bill is littered with provisions that undermine transparency and accountability. Examples are as follows:

• Clause 2 – Ministerial power to exempt from scope of the act: While Clause 2(1) establishes that the act applies broadly to all government procurement, Clause 2(2) allows the minister or state menteri besar/chief minister to exempt any one-off allocation under the Supply Act or Enactment from its application. This creates a sweeping loophole: entire programmes or projects, regardless of scale, can be excluded from the act’s safeguards. Such a clause undermines the consistency and accountability the Bbll is supposed to guarantee.

• Clause 12(7) – Breach without consequence: This states that no act or proceedings of a procurement board shall be invalidated even if a member has contravened the act. In practice, this shields decisions tainted by misconduct from being overturned.
• Clause 24 – Ministerial exemption from registration: This empowers the minister to exempt any person or class of persons from registering as a vendor. While the registrar must be consulted, the minister has full discretion. This provision allows politically connected actors to bypass even the most minimal safeguards.
• Clause 25 – Discretionary disclosure: This empowers the registrar to publish information on registered entities “if there is a public interest reason”, but imposes no duty to disclose. With no minimum requirement for transparency, oversight is left to the registrar’s discretion. This absence of mandatory disclosure is a serious gap as transparency in procurement depends on consistent and accessible information being available to the public.
• Clause 30 – Emergency procurement powers: This grants the minister authority to prescribe procurement procedures in times of urgency “in the interests of public order, health and safety”. With no criteria or external checks, this creates a fast-track for opaque procurement under the cover of emergencies.
• Clause 32 – Procurement public interest certificates: This clause permits procuring entities to declare procurements as crucial to public interest and therefore exempt from delay or other provisions. The conditions and procedures are again defined by the minister, providing yet another discretionary route around normal rules.

Disproportionate powers

Chapter VIII of the Bill sets out a broad range of investigative and enforcement powers for authorised officers.

Clause 45 empowers the Treasury secretary general or state financial authority to authorise any public officer under its purview to exercise the powers of investigation and enforcement under the bill in respect of government procurement. This will allow any officer of the Treasury or state financial authority to effectively become a quasi-police officer, granted with powers such as:

• Search and seizure with warrant issued by a magistrate, including search of any person on the premises and seizure of any record, book, document etc (Clause 47)
• Search and seizure without warrant (Clause 48)
• Access to computerised data, including any password, encryption or decryption code, software or hardware etc required to access and understand it (Clause 50)
• Forfeiture of things seized if it is proved to a court that an offence under this act has been committed, and that the thing seized was the subject matter of or used in the commission of the offence (Clause 53)

For context, even the Criminal Procedure Code – the primary law on criminal procedure – includes restrictions on the exercise of investigative powers that may limit the risk of abuse. For instance, Section 62 of the code allows for searches without warrant to be conducted only by police officers not below the rank of inspector. Section 116B allows for access to computerised data to only be granted to police officers not below the rank of Inspector.

Conversely, the wording of this bill allows for these powers to be conferred upon officers of any level of seniority.

More concerningly, the Bill explicitly forgives misuse of investigative powers.

Clause 49 maintains that search warrants issued under this bill shall be valid and enforceable even if there is any defect, mistake or omission in the warrant or in the application for the warrant.

Clause 55 prohibits any person from seeking any relief in court relating to a seizure unless the seizure itself was made without reasonable cause, which would exclude cases of excessive use of force or losses caused during the chain of custody of seized items.

Here the question of proportionality arises: are the offences under the bill so serious that authorised Treasury officers require powers greater than police officers, and with fewer limitations?

People have long called for greater oversight of the police force through the establishment of the Independent Police Complaints and Misconduct Commission, which eventually led to the establishment of the Enforcement Agency Integrity Commission and the subsequent Independent Police Conduct Commission.

Whose oversight will these new quasi-police officers be subject to? What remedies can we expect in the event of misuse or abuse of power by them?

Furthermore, the risk of conflict of interest is especially acute. Authorised officers will be drawn from the Treasury or state financial authorities – the very institutions overseen by the minister or state executive to whom they are accountable.

This raises the troubling prospect of whether such officers could ever be expected to investigate misconduct by their own superiors, including the finance minister or state leaders.

Without an independent investigative body, the bill effectively entrusts enforcement to those embedded within the same chain of command that procurement decisions flow from.

The Government Procurement Bill, in its current form, is institutionally dangerous.

It concentrates excessive discretion in ministers, embeds conflicts of interest, creates a registry open to abuse, and arms Treasury officials with investigative powers that even police officers exercise under stricter safeguards.

These weaknesses cut directly against the bill’s stated objective of advancing transparency and accountability.

With the current Parliament session concluding this Thursday, it is possible that this bill may be bulldozed and legislated without sufficient debate and feedback. This must not happen.

It is crucial to note that for many critical stakeholders, this is the first time the bill has been sighted. This includes MPs, government agencies, civil society organisations, private sector actors and the public.

For a law as impactful and far-reaching as this, it is imperative that the government allows adequate time for scrutiny, consultation and refinement.

If the government is truly sincere about transparency and reform, this bill in its current form must not be passed.

Therefore, C4 Center demands that the government:

• Delays the tabling of the Government Procurement Bill
• Provides adequate time and opportunity for stakeholders to review and give feedback
• Revises the Government Procurement Bill to address the structural weaknesses and accountability gaps identified above
• Ensures that any Government Procurement Bill must incorporate meaningful public participation in the procurement process

Only then can the bill credibly serve its intended purpose of reforming procurement for greater integrity and public trust. – C4 Center

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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