Kuala Lumpur, 27 Ogos 2025: The Institute for Democracy and Economic Affairs (IDEAS) expresses serious concern that the Government Procurement Bill 2025 falls short of what is needed to ensure fair, transparent, and accountable use of public funds.

While we welcome the move to legislate procurement practices after years of relying on administrative circulars, the bill contains serious gaps. It falls short of the standards of transparency and oversight that are expected from international standards such as those set by the United Nations Commission on International Trade Law (UNCITRAL).

One key concern is the wide discretion granted to ministers. Section 2(2) allows the finance minister or chief ministers of states to exempt “one-off allocations” to government-linked companies and statutory bodies from the bill entirely. “Considering that major infrastructure projects often utilise GLCs, particularly at state level, this is a serious loophole,” said Alissa Rode, senior research manager at IDEAS.

Furthermore, the Minister of Finance is allowed to determine procurement methods besides competitive procurement (Section 28(2)), which is no different from the existing system that is susceptible to ministerial override. The Minister also is the ultimate decision-maker if the procurement board doesn’t reach a unanimous decision (Section 12(8)). The sole approval authority for decisions valued above RM50 million is the Minister of Finance or Chief Ministers, for states. While the minister is required to receive the recommendation of the procurement board, he may also “make a different decision as he thinks fit” (Section 13(3)). “These provisions politicise procurement and leave critical spending decisions vulnerable to abuse, since the bill legalises existing poor practice,” said Alissa.

Transparency is another critical gap in the bill. Small upsides include making the Appeal Tribunal an open proceeding, so that the public may see how objections to procurement are handled. However, there aren’t mandatory measures for transparency to enforce the universal publication of all government tenders. “The absence of mandatory transparency requirements weakens the foundation of the bill. With billions in public funds at stake, the law should require all tenders, award decisions and contract changes to be published,” said Alissa.

IDEAS also expresses concern that the bill names the Ministry of Finance as the investigative power and compliance monitor for procurement, when it is also the administrative leader and supervisor of procurement policy generally. In other country models, the oversight and investigations are assigned to independent entities that do not handle procurement. This would ideally be a future ombudsman’s office, or the auditor general.

“Malaysia must not only adopt the form of international procurement standards, but also their substance, by ensuring narrow criteria for departing from competitive procurement, and independent oversight. Without serious amendments to the bill, similar failures in procurement can continue to happen,” said Alissa.

“The bill risks legitimising the same flawed practices that led to scandals like the Littoral Combat Ship (LCS), the Sabah Water Department, Scorpene, and PKFZ. Malaysia deserves a procurement law that upholds clean governance, ensures value for money, and strengthens public confidence. Therefore, we urge the government to refer the bill to the Parliamentary Select Committee on Finance and Economy for further review. The review process should also include consultations with civil society organisations (CSOs) to ensure the bill reflects best practices and public interest. This is not the first time that bills of significant public interest are tabled without adequate time for meaningful inputs from CSOs and experts in the field. Stakeholder engagements on general principles are insufficient – it is the final drafted law that requires time for scrutiny and feedback. Beyond just this bill, there needs to be significant improvements in the entire process of lawmaking in Malaysia for the benefit of all Malaysians,” said Aira Azhari, CEO of IDEAS.

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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