CONSULTANT BINNIE Black & Veatch is at the centre of a row over cut-throat bidding after winning a preliminary project feasibility study for Hong Kong's Territory Development Department (TDD) with a bid of just HK$1 (12 cents).
Managing director of BBV's Hong Kong office Ken Au Yeung justified the move. He said it was intended to draw attention to cut-throat bidding among consultants as well as being a 'damn good business investment'.
But BBV's winning bid angered Hong Kong MP Lau Ping-cheung, who represents architects and planners. He said Binnie's price was unreasonable and the TDD was irresponsible in awarding the contract.
'The firm may lose several hundreds of thousands of dollars in the preliminary study, but what it is really after is the main engineering contract, ' said Lau.
Hong Kong government chief executive Tung Chee-hwa has promised to investigate the award of the contract.
Au Yeung said the price difference between Binnie's HK$1 bid and the study's HK$200,000 ($25,616) estimated cost was miniscule compared to some recent consultancy awards.
In a letter to staff, Au Yeung said: 'The recent overly ambitious competition in consultants' fees has deprived respectful, competent consultants like us of the chance to render dedicated service to government.
'To rectify this unhealthy phenomenon in the industry, we see the need to take a commercial break in a small pilot project like this preliminary project feasibility study by offering a free service, which we can afford at ease but would ultimately benefit both client and ourselves by positioning our premium services for the next stage works.'
He added: 'I am pleased to say that our management decision was well received by government. As a spin-off, the public awareness now aroused offers a good opportunity for government to review its current procurement of quality consultancy services.'
BBV's study involves drawing up the preferred options for roads, drainage and associated infrastructure for the fourth phase of development at Tung Chung new town, opposite Chek Lap Kok airport.
Au Yeung said that BBV was favoured for the detailed design of the third phase, but was undercut by a lower price.
'Our price was HK$20M and we scored top technically. But we were undercut by a rival price of HK$12M. On this latest fourth phase we heard that other consultants were planning to submit HK$1 bids for the feasibility study, ' he said.
The Works Bureau, which oversees the seven public works departments including TDD, said tender procedures had been strictly followed and that BBV's progress would be monitored.