What is practised by corrupt naval personnel could well be the modus operandi in other government departments

People used to wonder how certain goods could be so overpriced, as often reported annually by the Auditor General. In my humble opinion, an explanation by an ex-Admiral, who is now PKR's Lumut MP, unravels what happened in the Navy could well be practised in other government departments and agencies.

Ex-admiral: Group manipulated Navy procurement system – Malay Mail Online

'The procurement method used by the navy to source parts for its fleet may have been manipulated by a small group of Royal Malaysian Navy staff and suppliers to mark up prices of certain items, claims a former high-ranking naval officer.

Retired First Admiral Mohamad Imran Abdul Hamid, who served for several years at the Lumut naval base, said fleet procurement came under a special unit called Depot Bekalan Armada (Fleet Supply Depot).

This unit sourced parts from suppliers through a three-tier procurement system.

In an interview with Malay Mail yesterday, Imran said the three tiers of procurement were known as the Quotation Management System (QMS), e-procurement and e-bidding.

In detail, he said QMS was used to source parts which cost RM20,000 or less each.

If the part costs between RM20,000 and RM50,000, the e-procurement method is used.

E-bidding is for parts costing between RM50,000 and RM250,000.

He said the Fleet Supply Depot was headed by a commanding officer, usually a captain, with a commander as his deputy.

"Below them are the material controllers or MCs," he said.

"Each MC is in charge of different parts or needs of the fleet...'




　
  'He said it needed "teamwork" or "network" already established between the navy staff and suppliers over a long period of time to enable millions to change hands between the two sides.

Pointing out the probable way the two sides manipulated the system, he said this could have been done by pushing up an item fit for QMS or e-procurement into the e-bidding system.

"Let’s say one of the items to be procured is worth RM20,000.

"By right, the depot unit should use the QMS method to acquire it.

"However, this item is pushed either to e-procurement or e-bidding.

"Of course, the money is bigger in e-bidding.

He said once suppliers have locked in their quotations by the end of the tender period, the tenders are then reviewed by the procurement panel at the depot.

Since the value of items are not in millions the decision is finalised at the panel stage.

Imran, who once headed the navy’s logistics department, said once an item was purchased at a higher price, the procurement record would carry the new higher price instead of the older lower price, thus "helping" the "fixers" to reap profit from the marked-up item even for future transactions.

He stressed the procurement method would be susceptible to manipulation as long as the same staff were allowed to work in the same unit for years.'

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