<< Talks

The Role of Government in Promoting Capacity Building
Hong Kong Experience
Dr LAU Ching-kwong
Director of Civil Engineering and Commissioner of Mines Chairman, Engineering Consultants Selection Board Government of the Hong Kong Special Administrative Region President, Hong Kong Institution of Engineers

1. Introduction

Consulting engineering firms need to expand their skills and knowledge to meet the challenges of this rapidly developed world. Capacity Building is a must to consulting engineering firms if they wish to sustain their high quality of professional services.

The Government of the Hong Kong Special Administrative Region (SAR) have taken effective initiative measures to create the policy and operating environment in which consulting engineering firms can build up their capacity and prosperity. The current system in Hong Kong ensures economy, efficiency, transparency, and accountability in procurement. In turn it has brought benefits to the industry and the general public in Hong Kong.

2. Background

The selection of consulting firms for all Government engineering projects in Hong Kong are overseen by a selection board, the Engineering & Associated Consultant Selection Board (EACSB). Over 140 firms including locally established firms and international firms have been included in the EACSB Consultants Directory. The selection method is based on the "two-envelope" system of the kind used by the World Bank. Over the years, around 80 engineering consultancy assignments with a total amount of approx. US$100 million were let out each year on average.

3. Government Policy

The Government's policy in public procurement of engineering consultant services is that it should be fair, open and impartial, and free from corruption. All capable consultants are considered and selected on a level playing field. The objective is to ensure that the best interests of the public are served by the employment of capable and experienced consulting firms at fair fees. As a result, capable firms strive and build up their capacity through fair competition under the system.

4. Initiatives

Among the various Government initiatives for capacity building, the key ones which have proved to be highly effective are outlined below.

(a) Procurement Procedures

The Government implements its policy with the "two-envelope" system that favours open, transparent and quality based selection, with price being a selection factor under strictly controlled and transparent circumstances.

For each consultancy assignment, the assessment panel pre-determines the selection criteria and the technical/fee weighting before the selection starts. Together with these predetermined criteria, detailed scope of services, schedule of fees, marking scheme and other requirements are included in the invitation of expression of interest. The invitation is posted on the managing department's web-site. The Government's Works Digest also publishes the forecast of consultancy in the next 6 month, both in hard copy and on the web-site, so as to let the consulting firms have themselves prepared for the submissions. All capable firms satisfying the selection criteria are free to express their interest.

To achieve the objective of the Quality Based Selection, only the fee proposals of the technically capable firms will be opened. In case the assessment panel has considered any firm that is technically not capable, the fee proposal will not be opened and will be returned to the firm. This is to ensure that technical deficiency cannot be compromised by a low fee. Such arrangement encourages consulting firms to build up their capacity, instead of cutting fee, if they wish to win a job.

(b) Transparency

To enhance the transparency of the procurement, the entire consultants selection procedures are detailed in the EACSB Handbook and is open to the public through the internet home page (http//www.info.gov.hk/ced/eng/publication/eacsb/eacsb.htm). Hence, all parties concerned know very clearly before hand each step of the consultants selection and where the responsibility and accountability lay.

The name of the winning firms together with the winning fee are disclosed to the public. Also, the summary of technical marks and fees of all the shortlisted firms is disclosed to all shortlisted firms. A debriefing session may be conducted, if necessary.

(c) Corruption Prevention

With a view to achieving corruption free competition, the consultants selection is assessed by a panel normally comprising 3 to 5 members instead of an individual officer. To highlight impartiality, at least one of the assessment panel members should come from another department. Each member of the assessment panel is accountable to the assessment made on the consultants. All the assessments and decisions with reasons need to be properly documented. Also, all members of the assessment panel need to declare if there is any conflict of interest prior to commencing the consultants selection.

Pre-submission meetings are held to provide a forum to ensure that all shortlisted consultants receive the same information openly and in a fair manner. Releasing exclusive information to any particular firm is strictly prohibited.

In Hong Kong, the anti-corruption organisation, Independent Commission Against Corruption (ICAC), has done a very successful job in fighting against corruption over the years. A very comprehensive legal framework has been created and clear guidelines in respect of corruption prevention have been widely promulgated.

Due to the excellent results of fighting against corruption, the consulting firms can fully utilize their resources in providing high quality services to the Government and building up their capacity to face the challenges.

(d) Quality Management

It is a mandatory requirement that consulting engineering firms must have obtained the international standards ISO9001 certification if they wish to undertake Government consultancy work. The quality management certification requirement laid down by the Government helps consulting firms to build up their capacity to the international standard.

(e) High-Level Contact

The Government holds regular liaison meetings with the Association of Consulting Engineers to improve communication. Through these meetings, the relevant heads of the Government bureaux and works departments and the representatives of consulting engineering firms exchange views and resolve differences over matters relating to consultant management and selection. In addition, there are frequent high-level contacts that the Government works with the Association of Consulting Engineers on major issues and develop a mutual understanding of the changing needs of the Government and the most updated services available in the industry.

(f) Proper Financing

Various measures have been put in place to minimize the financial burden of the consulting firms. For instance, a sum of money will be paid to the firm at the commencement of the consultancy agreement; the payment schedule is set to match actual cash flow for the services provided as far as possible; payments are to be paid within 21 days after receipt of the consulting firm's invoice etc.

(g) Contracting Out

The Government has minimized its in-house engineering work whilst the work contracted out to consulting firms has been maximized as much as possible. By partnering with consulting firms, more opportunities have become available for the private firms, the Government becomes better informed of the technology development and more competent in purchase of services, and able to enforce proper procedures and contractual performance.

(h) Growing Firms

In order to help consulting firms build up their capacity in a wider spectrum of engineering services and help small firms build up their capacity by working with big firms, joint venture and sub-consultancy arrangements are encouraged. In order to assist small consulting firms to grow, small consultancy assignments (estimated fee less than US$0.5 million) are set aside for small firms only. This has provided more equitable business opportunities for firms of different sizes. The small firms will otherwise have little chance of winning consultancy work if they have to face direct competition with the large firms.

(i) Consultants Performance Index

The Government is developing a consultants performance index system for the consulting firms which have undertaken public works assignments. The system will provide management information for the Government and benchmark information for the industry.

(j) Development of professional and managerial capabilities in the industry.

Various kinds and types of conferences, seminars, workshops, continuous professional development courses are organised by the Government departments, Hong Kong Institution of Engineers, Universities etc from time to time to enhance both the technical and non-technical knowledge of the professionals.

(k) Technology transfer

The best way to transfer technical know-how, from overseas to local consulting firms is by mixing the local professionals in the working team of the overseas firms in the form of joint venture or sub-consultants, or by direct employment of local professionals. As for local government staff, the transfer of technology could be achieved by carefully specifying in the consultancy brief that government staff are to be seconded to work in the project team of the overseas firms.

5. Conclusion

To conclude, the Government of the Hong Kong SAR has adopted a set of highly transparent selection procedures for the selection of capable and experienced consultants by way of fair, impartial and open competition. The procedures ensure that the best interests of the public are served by the high quality services of the consultants at fair cost. The procedures also provide a level playing field for capable consulting engineering firms to grow and build up their capacity in an open and corruption free environment.