Audit: 7 major contracts implemented ICP obligations

 

A review of seven major contracts listed in the post-implementation audit report found that all of them had implemented the obligations of the Industry Collaboration Programme (ICP) as stipulated in the main ICP agreement.

ICP is a programme that consists of activities that will add value to government procurement, to ensure maximum value of return to the local economy in a cost-effective manner.

According to the Auditor-General's Report 2020 Series 1, which was released yesterday, the ICP relief of obligation letters for three major procurement contracts, namely Pilatus PC MK-II Training Aircraft, Eurocopter EC725 and ISS vessel, have been issued by the Ministry of Defence (Mindef), in line with policies and guidelines stipulated under the 2011 Offset Programme and the Economic Strengthening Programme.

“Two contracts that have completed the implementation of the ICP in 2021 are still in the process of being approved by the IC (ICP committee), namely the V-Shorad Starstreak and the helicopter rental contracts,” according to the report.

The report said that the procurement contracts for the Lipan Bara AV-4 armoured vehicles and Combat Net Radio were subject to the ICP 2014 policies and guidelines, which stipulate the ICP Obligation Relief Letter issued by the Ministry of Finance (MOF).

“However, the audit found that relief of obligation for these two contracts was only certified and approved at the IC level on Nov 16, 2020, and June 29, 2018, respectively, without going through the MoF.

ICP implementation benefited the Armed Forces

The report also concluded that the implementation of the ICP benefited the Malaysian Armed Forces, its staff and institutions of higher learning.

However, it also found that the assessment of the results of the ICP programme was not implemented, so that the long-term impact of the programme could not be measured, apart from the weaknesses that need to be addressed.

It involved an implementation of ICP obligation process which was late or not being implemented; selection of some ICP recipients who did not go through the ICP Recipients Audit process and late/unsigned ICP key agreements, as well as inefficient monitoring due to the ICP progress reports not being submitted regularly by ICP providers.

To address the shortcomings, the report recommended that the MOF reviews and revises the ICP policies and guidelines to make them clearer and easier for Mindef to implement.

Also recommended is that criteria for evaluating the results and impact, to measure the achievement of an ICP programme, should also be included in the guidelines.

Mindef is also recommended to ensure that ICP is implemented in accordance with the guidelines set, especially in terms of the implementation period and evaluation of recipients to ensure government interests and that the programme benefited the parties concerned.

Apart from that, Mindef is also recommended to maintain a record of information on ICP recipients and activities carried out as well as to ensure that ICP providers submit progress reports periodically so that performance can be measured and monitored properly.

- Bernama