Procurement Risk:
High
Score:
38/100
Government Policy
Q57
75/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. Any government procurement is subject to a number of laws. The Financial Procedure Act…
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The legislation that regulates any government procurement in Malaysia, including defence and national security procurements, recognises the risks of corruption and provides detailed provisions…
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Defence and national security procurements are subject to an open tender system. There are, however, cases in which the government pursues direct negotiations outside…
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Q58
42/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The defence procurement cycle follows the policies outlined in the ‘Government Procurement Regime’. [1] This legislation outlines the tender process, the design of specifications,…
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Guidelines and procedures for general tenders and procurements are available online. Only some specific processes are available to the public, i.e. procurement advertisement/tender and…
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Although guidelines and procedures are available, and by law should be adhered to, there are some problematic issues of implementation. The decision to procure…
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Q59
25/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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Procurement oversight mechanisms are a formalised process. A parliamentary Special Committee, chaired by the Defence Minister, is set up for the process. The committee…
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Although procurement oversight mechanisms exist where guidelines are publicly available on Ministry of Finance website, the process can be circumvented by an interested party.…
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There is evidence of activity of procurement oversight mechanisms (e.g. reports, announcements in the press of the cancellation of procurement programmes, the release of…
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The former Defence Minister was quoted as mentioning an Asset, Training and Preparedness Agenda. [1] However, information regarding this agenda is not publicly available,…
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Several defence purchase plans have been made public, typically at the two larger defence exhibitions in Malaysia, Defense Services Asia (DSA) and the Langkawi…
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Several defence purchases have been made public, typically at the two larger defence exhibitions in Malaysia, Defense Services Asia (DSA) and the Langkawi International…
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Procurement tenders are advertised on the Defence Ministry’s website but the results of the tenders are not made public. [1]
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Capability Gap and Requirements Definition
Q62
25/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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Malaysia does not have a law that discriminates in its selection of suppliers and sub-contractors on the basis that they have a formal and…
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There are no specific procedures or policies whereby companies must formally sign anti-corruption clauses in contracts with the government. [1] As such, this indicator…
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Q63
42/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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In general, procurements are based on the national defence and security strategies. Procurement is done with multiple objectives in mind. Firstly, there are national…
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Purchases are subject to the Ministerial Internal Auditing, the Ministry of Finance, and the Auditor General’s Office (AG)’s yearly auditing inspection. [1] Under the…
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The purchases may be clearly identified and quantified based on strategic requirements, as outlined in the Defence White Paper. [1] But in some cases,…
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Tender Solicitation, Assessment and Contract Award
Q64
NEI/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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In theory all procurements of strategic assets must undergo an open tender process as stipulated under the Financial procedure Act of 1957 (amended 1972),…
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According to the official tender and procurement regime, “Individuals, companies or corporate bodies intending to participate in Government [procurement] must register” with the Ministry…
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Q65
50/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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To avoid conflicts of interest, evaluation is normally done by two separate committees, the Technical Evaluation Committee and the Financial Evaluation Committee. Officials involved…
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There are specific processes, which tender or procurements boards have to adhere to based on the Ministry of Finance’s directives. The process is audited…
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Tender Boards are not subject to clear disclosure requirements, e.g. how they decide in awarding tender. It is also not clear whether members of…
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The procurement board tender and procurement process is scrutinised under various laws and regulations. Members of the board are bound by the Official Secrets…
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Q66
33/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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There is no specific legislation that prohibits collusion in the defence sector. However, contract processes are subject to the Ministry of Finance’s scrutiny and…
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There is no clear legislation on the requirements. Guidelines do exist, whereby a Ministry might bar companies or individuals that have been “blacklisted” from…
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In general, when a case arises, investigation is done through a formal process however, political involvement and palace connections can derail the process from…
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There is not enough evidence to score this indicator. Civilians as well as military personnel are required to attend training in their respective fields…
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Contract Delivery and In-Service Support
Q67
25/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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There are formal mechanisms to ensure contractors meet the bidding obligations. [1] A Letter of Acceptance will be issued “to the successful bidder if…
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Changes or modifications to a project are subject to a review by the Technical and Financial Committee, and must be reported to the procurement…
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Monitoring is one of the weakest links in this process, especially where the project is awarded to a politically-linked contractor. [1] [2] The monitoring…
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Despite clear guidelines from the Ministry of Finance on tenders and procurement, enforcement remains a problematic issue. [1] [2] In many cases, companies involved…
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Q68
67/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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Companies can submit their complaints about perceived malpractice in procurement to the Malaysian Anti-Corruption Commission (MACC). [1] They can also bring a case for…
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Companies can submit complains about perceived malpractice in procurement to the Malaysian Anti-Corruption Commission (MACC), and they can also file reports with the MINDEF…
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There were no reports of companies being discriminated against as a result of any complaints lodged. [1] However, even if the incident did happen,…
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There are no clear laws and regulations that empower procurement officers to exclude companies or individuals implicated in bribery or corruption related offences. The…
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Such a case is usually investigated by the internal audits. [1] If corrupt practices are proven to exist, the case will be reported to…
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Under the Corporate Liability Provision, Section 17A of MACC 2009, prosecution can be initiated against “a commercial organisation if a person associated with that…
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Offset Contracts
Q70
25/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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There is a legal framework for offset contracts, governed by the Industrial Collaboration Program (ICP) Policy and Guidelines which was established by the Ministry…
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There is no evidence that the government imposes a strict anti-corruption due diligence study on offset contracts. Offset contracts are usually done through direct…
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The Policy and Guidelines on Industrial Collaboration Programme (ICP) in Government Procurement document outlines the national policy on offset contracts and provides a guideline…
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The Malaysian Offset Programme Management Framework provided in the Policy and Guidelines on Industrial Collaboration Programme (ICP) in Government Procurement document, guides the development…
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Under the Malaysian Offset Programme Management Framework as outlined in the Policy and Guidelines on Industrial Collaboration Programme (ICP) in Government Procurement document, the…
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There is not enough information publicly available to determine a score for this indicator. However, the revelation of numerous Ministry of Defence (MINDEF) suspicious…
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Under the general guidelines of government procurement, offset contracts are subject to an open tender system. The Malaysian Offset Programme Management Framework provides guidelines…
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Agents / Brokers
Q73
0/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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There is no evidence that Malaysia has a specific law or mechanism to control the role of middlemen. The absence of a law has…
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There is no evidence that Malaysia has specific legislation to prohibit middlemen or agents from lobbying for procurement projects. [1] As such, this indicator…
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Financing Package
Q74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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Information relating to arms deals is generally limited. Typically, information relating to arms deals is made public through the media following announcements at the…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. A SIPRI report states that, “Malaysia’s arms imports dropped after major arms procurement programmes…
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This indicator is not assigned a score in the GDI. The government’s defence acquisition is usually based on financial circumstances and the decision by…
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This indicator is not assigned a score in the GDI. Domestic pressures do have a role in decision-making for defence acquisition. [1] [2] It…
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