Disciplinary Action Against Supplier - Contractor


1. Who can take disciplinary action to blacklist contractors or suppliers who refused to return the Letter of Acceptance after they were picked in the tender on the grounds that the supply prices have risen and so forth. Can the Ministry/agency on its own blacklist these contractors/suppliers?
  The authority for the registration of suppliers for the procurement of supplies and services is the Ministry of Finance, while the authority for the registration of work contractors is the Contractors Service Centre (PKK) and the Construction Industry Development Board Malaysia (CIDB). This matter was stated in the Treasury Instructions (AP) 184. AP 166.2 (ix) and SPP Nos.6 of 2010 which provides for this type of action that can be taken against the supplier/company registered with the Ministry of Finance. Therefore, the parties that can impose any disciplinary action including blacklisting the supplier/contractor are the Ministry of Finance or the PKK/CIDB.

2. What actions can be taken by the Ministry/agency on contractors or suppliers if their performance is unsatisfactory, late in delivery of supplies or late in work/not completed?
  For any procurement of supplies, services or work, the Ministry/Agency may take action in accordance with the terms of the contract if the supplier or contractor does not fulfill its obligations under that contract.
For example, suppliers who are late to supply can be fined and contractors who are late in completing their work shall be liable for compensation by Liquidated & Ascertained Damages (LAD) that has been determined and fixed.
Ministry/Agency may take actions to terminate the contract and the performance bonds seized. These actions can be implemented by the Ministry/Agency as Contract Administrator for contracts entered into by the Ministry/Agency with suppliers/contractors.
3. Should the supplier/contractor be informed on the types of offenses and penalties?
  In inviting for a tender/quotation, the Ministry/agency may inform the tenderer/quoter by giving an overview of the types of offenses and penalties that may be taken against the tenderer/quoter, but the authorities to take action and impose penalties are still the registering authorities i.e the Ministry of Finance (supplies and services), or PKK/CIDB (work).
4. What type of actions that can be taken against the contractor/supplier who fails to comply with contractual obligations?
  Some form of actions may be taken, among which are based on the provisions contained in the contract agreement with the contractors/suppliers and the relevant government agencies. In addition, the agency shall report to the Government Procurement Division (BPK) on this matter. BPK may take some actions such as issuing warning letters, suspending registration, canceling registration and blacklisting the board of directors.