Kuala Lumpur, 25 July 2025: The Institute for Democracy and Economic Affairs (IDEAS) is calling on the government to take firm and immediate action following the release of the Auditor-General’s Report 2/2024, which once again highlights issues with compliance in public procurement.

The report reveals weaknesses in the implementation of a new selected pre-qualified tender process, irregularities in selecting winning bids, and in the case of FELCRA Berhad, irregularities in the board’s decision-making on major acquisitions. The sizeable amount of public funds at stake merits stronger governance and transparency measures around procurement. Otherwise, delays, leakages, unfulfilled contract terms, and oversight lapses that cost the public dearly will continue to be a familiar refrain. 

IDEAS therefore reiterates the urgent need for a standalone Government Procurement Act, which was announced in 2023 and highly anticipated last year. This legislation should embed clear legal standards for transparency and competitive procurement methods that achieve value for money. It should require the proactive disclosure of procurement plans, tender notices, selection criteria, and final contracts through the government’s centralised procurement platform, and also enforce compliance through an independent review mechanism over procurement procedure. The procurement act should cover not just ministries, but public sector entities that use public funds, given the major issues each year in the compliance audits of these entities. 

The selected pre-qualified tender process was intended to set up a more efficient and fair tender review procedure. Given the weaknesses identified, the new process does not resolve long-standing issues of manipulating procurement bids through cartels and proxies. IDEAS echoes the Auditor General Report’s recommendation that this process should utilise a central, updated database of tender participants that is integrated with the e-procurement database, to ensure a fairer pre-qualification and tender selection process. 

Given irregularities highlighted in the board proceedings of FELCRA Berhad, equally important is the introduction of a law setting up governance standards for public entities or state-owned enterprises. SOEs manage billions in public assets, yet operate in a grey zone with limited public accountability. A robust law must define their public interest roles, introduce transparent and merit-based board appointments, and empower Parliament to hold these entities to account.

“We keep pointing to the same problems year after year, yet the system remains fundamentally unchanged. Procedural irregularities point to a habit of prioritising expedience and speed in pushing out projects over necessary structural reform to ensure that public projects get the best value for money.  A strong Government Procurement Act will not fix everything overnight, but it is the baseline we need to restore public trust in the system. We need a government that protects public money with the same urgency it uses to collect it,”  says Aira Azhari, IDEAS CEO.

— ENDS —

Download the Media Statement PDF File Here

For enquiries, please contact:
Ryan Panicker
Assistant Manager, Advocacy and Events
T: 03 – 2070 8881/8882 | E: ryannesh@ideas.org.my