Terminating tender without reason clause

March 1st, 2010 by poobalan | View blog reactions Leave a reply »
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While it may be seen as something which is common or acceptable, the clause (number nine) in PDC’s tender application forms which says contract can be terminated at any time without any reason given upon the order of the Chief Minister or PDC chairman is not appropriate for the CAT policy of the Penang state government. You must walk your talk. At least the reason must be provided, and the contractor must have an avenue to appeal or state his case. Then only fair, right?

Chief Minister Lim Guan Eng has come under fire for having the power to terminate any contract awarded by the Penang Development Corporation (PDC) at any time without giving any reason.

Umno Youth information chief Datuk Seri Reezal Merican Naina Merican said the insertion of this clause in the PDC’s tender application forms recently was a “psychological threat” to contractors bidding for projects.

He said clause nine in PDC’s Tender Form A stated that contractors could have their contracts terminated at any time without any reason given upon the order of the Chief Minister or PDC chairman.

“How could anyone have the absolute power to overrule the decision made by the state Tender Board?

“This move is not in line with the Treasury’s tender procedures as observed by the Federal Gove rnment,” he told reporters at the Kepala Batas parliamentary-level Juara Rakyat programme launch in Dewan Bakar Kapor here yesterday.

Lim is PDC chairman as well as chairman of the state Tender Board.

Reezal said four contractors had highlighted the problem to him last week.

He said Lim should explain the reasons for introducing the clause and not brush it aside.

Earlier, state opposition leader Datuk Azhar Ibrahim, lashed out at Lim, saying that he hardly showed his face in Kepala Batas but expected the people to continue supporting him like he was their saviour.

When contacted, Penang Malay Contractors Association chairman Datuk Mohamed Fadzill Hassan said he has not received any complaint from his 500-odd members about the clause.

I don’t know anything about this. If there is indeed such a clause, it is not fair because Lim cannot terminate contracts just like that without giving reasons.

“Where is the transparency? The affected party can take him to court,” he said.



  1. Consumer says:

    Actually, this is nothing. Go have a look and ur recent contact with ur telco, bank or y not ur sales and purchase agreement? They dont favour consumer at all.. I dont c any problem with the terhm above when consumers who out number the tenders guys should get fair treatment first.

    • poobalan says:

      hi consumer,

      yeah i agree the contracts never favor the buyer (consumer) in the examples you gave. but in the case of penang govt, they are offering projects (and would be in fact consumers) to the suppliers. AND they around trumpeting about some CAT things, so it doesn’t gel.