LCQ13: Information Technology Professional Services Arrangement

Following is a question by the Hon Sin Chung-kai and a written reply by the Secretary for Commerce, Industry and Technology, Mr John Tsang, in the Legislative Council today (December 10):

Question:

Regarding the projects awarded under the Information Technology Professional Services Arrangement ("ITPSA") which was implemented last year, will the Government inform this Council:

(a) of the respective percentages of the number of projects with delayed completion in the total numbers of projects awarded under ITPSA and those which have been completed;

(b) of the details of the projects with delayed completion (including their categories, prices and contractors), and the reasons for the delay;

(c) whether projects under ITPSA are awarded to contractors who offer the lowest bid; if so, whether there were projects for which the contractors had increased the tender price as the specific service requirements were revised by the authorities after completion of the tendering procedures; if there were such projects, the number of projects involved, the original and the revised tender prices of these projects and the final tender price approved by the authorities; and the difference between the final approved tender price and the second lowest bid offered for the projects concerned during the tendering process; and

(d) if the final approved tender price mentioned in (c) is higher than the original tender price, of the procedures and criteria adopted by the authorities for deciding to increase the tender price concerned?

Reply:

Madam President,

(a) As at October 31, 2003, 74 bureaux and departments awarded a total of 240 work assignments under the Information Technology Professional Services Arrangement (ITPSA), which was launched in June 2002, and 73 of these assignments were completed on schedule.

According to the information provided by relevant bureaux and departments by end October 2003, all the above 73 projects were completed on schedule. Among those in progress, two were going beyond the target completion date of end October, representing 0.8% and 2.7% of the total number of awarded assignments (240) and completed assignments (73) respectively.

(b) The two work assignments falling behind schedule are mainly related to office systems and network implementation services and information technology security services, valued at about $700,000 in total. The delay was mainly due to the belated delivery of software procured from or developed by other suppliers, which had rendered the contractors concerned unable to complete the two work assignments on schedule. As the specific progress and details of individual work assignments may involve commercially sensitive information, we normally will keep them in confidence, and will not disclose information concerning individual contractors.

(c) All the ITPSA work assignments are awarded to contractors who fully meet the service requirements and who offer the lowest bid. During the service contract period, government departments as the project owner may request the contractors to revise the specific service requirements to meet their actual needs. This may involve increase or decrease of service items. The scope of variation is governed by the ITPSA contract terms. Of the 240 projects awarded, 29 had their service requirements revised resulting in a change of the gross service charge. This included an increased charge for 25 and a decreased charge for four. The total service charge of the 29 projects which had been at about $48 million initially was in the region of $55.52 million after the variations. Since the revised service requirements are only applicable to the service contracts awarded and not reflected in the second lowest bid originally offered for the assignments concerned, we consider that it is inappropriate to compare the latter with the final approved service charge of the revised service contracts.

(d) Government departments are required to handle and approve change proposals in accordance with the Government's procurement regulations and the ITPSA contract terms. In accordance with the ITPSA guidelines (the guidelines) issued by the Information Technology Services Department, for any work assignment with a service charge not exceeding $10 million, accumulated variation in the service charge of the work assignment shall not exceed 100% of the original approved service charge; and the total service charge after variation should not exceed $13 million. For any assignment with a service charge over $10 million, the accumulated variation in the service charge shall not exceed 30% of the original approved service charge. Departments must establish a management structure to manage the work assignments and consider whether to accept any change proposals. The guidelines also advise departments to set up an assessment panel to consider whether to accept any change requests in respect of high-value assignments with a service charge exceeding $10 million. Departments must also ensure that the change proposals are reasonable and will meet the service and technical requirements of the department when accepting the change proposals.

Wednesday, December 10, 2003

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