4As calls out TM for 'unjustifiable' tender document fee and deposit

The Association of Accredited Advertising Agents Malaysia (4As Malaysia) has called out Telekom Malaysia (TM) for its "unjustifiable" tender document fee and tender deposit. In a statement, 4As CEO Khairudin Rahim (pictured right) also called this aspect of TM's procurement policy "flawed". TM is currently conducting three separate tenders for the appointment of panel agencies for creative partner, digital partner, and below-the-line partner. A+M has reached out to TM for comment.

The telco has a condition where a non-refundable tender document fee of up to RM5,000 and a refundable tender deposit of up to RM20,000 per tender is part of its requirement. Khairudin said the 4As finds it odd that agencies today have to pay a tender document fee of between RM1,000 to RM5,000 for the first phase of the tender process in order to be allowed to send agency information covering commercial and technical requirements such as its organisation details, case studies, conflict mitigation protocol, ethics compliance and financial documents to TM.

All agencies that choose to submit tender documents in the first phase must also submit a refundable tender deposit to TM of between RM5,000 to RM20,000. Thereafter, shortlisted agencies will be invited to pick up the request for proposal and will then need to submit their customised strategy, creative work, and financial proposals.

"Tender document fees are historically a token charge from the advertiser to recover photocopying costs of documents containing detailed tender specifications and information required from the tenderer. This was in the era before the use of digitally transmitted documents," Khairudin said.

When asked by agencies as to the need of the two tender conditions, 4As quoted the TM saying that "these are to ensure that only agencies of 'acceptable standards' will be shortlisted and not waste the time of their evaluation panel".

The 4As have since highlighted in written appeals that TM in the first phase has already put in place a meticulous internal screening process led by its own eminently qualified and experienced marketers entrusted to shortlist potential agencies with a proven effectiveness and creativity track record.

"The two tender conditions have no correlation to whether the interested agency is of acceptable standards. An agency who from the onset is willing to subject itself to TM’s tender document fee and tender deposit will not necessarily meet TM’s standards. The mandatory screening conducted by TM’s marketers will," Khairudin said, adding:

These two tender conditions are therefore redundant. They might be acceptable only if TM’s mandatory screening process led by their marketers is not administered.

In addition to deeming this aspect of TM's procurement policy flawed, the 4As added that it is "surprised and disappointed" that despite two written appeals and the sound reasoning provided, TM has chosen to maintain the two conditions citing that these are "part of TM's procurement policy". According to the 4As, no counterarguments to its rationales were offered by TM.

The 4As has sent a third appeal repeating its rationales for the two conditions to be removed for all three tenders involving ad agencies now and in the future.

"The 4As looks forward to the elimination of unreasonable procurement policies placed on agencies and is always ready to provide assistance and best practice guidance to agencies and marketers," Khairudin said. 

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