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Enhancing the quality of the Service Industry by Awarding to the Most Advantageous Tender


The service industry in Taiwan has been developed steadily in recent years. It contributes about 70% of Taiwan’s GDP, and plays a key role in promoting domestic economic development. Meanwhile, the service quality has been improved rapidly as well. The Public Construction Commission (PCC) encourages government agencies to award to the most advantageous tender for service procurement. By doing so, the public sector may lead the service industry to an environment of fair competition with better quality, and also assist the service industry to develop in a positive way.
According to PCC’s statistics, the value of service procurement by government agencies in 2011 was about NT$ 260 billion. Of  which, about 56% by number of cases were awarded to the most advantageous tender. Specifically, the application of the most advantageous tender has been considerably common for some service sectors. For instance, the percentages were about 88% and 78 % for tour and transportation service (including accommodation, moving, and transportation), and catering service, respectively. However, the application of the most advantageous tender was about 30% for the procurement of security service, cleaning service, and employment service, leaving room for enhancement.
To take the information service procurement as an example, PCC coordinated with the Office of Board of Science and Technology; Directorate-General of Budget, Accounting and Statistics; Agency Against Corruption; and Information Service Industry Association in the first half of 2012 to promote the adoption of appropriate award criteria. A fruitful result is that the percentage of awarding to the most advantageous tender in the information service procurement exceeds 49%, an increment of 8% comparing to that of the same period in 2011. In particular, 73% of the cases of data processing service procurement were awarded to the most advantageous tender. It demonstrates that government agencies are willing to award to the most advantageous tender after realizing the strengths of it.
PCC encourages government agencies to select appropriate award criteria for government procurement contracts, in order to discourage unreasonable competition among suppliers offering abnormally low prices. Consequently, it may help to enhance the service quality of suppliers, provide a healthy environment for competitiveness and development, and create a win-win situation between the government and the service industry.