Government Procurement Bill 2025 Passed by Malaysian Parliament

Registration Requirements for Suppliers and Contractors

Prior to participating in a Government procurement, all suppliers and contractors are required to be registered under the Act. All applications for registration of a supplier or contractor shall be made to the Registrar of Government Procurement (“Registrar“). The Registrar may approve the application if the applicant meets the following requirements:

1. is a fit and proper person;

2. has fulfilled all the requirements under the Act and complied with any preconditions of the registration; and

3. has made a disclosure of interest in accordance with the Act. 

Once the application is approved, the Registrar will issue a certificate of registration to the applicant. The Registrar may impose such conditions as the Registrar thinks fit to impose on any registration.

The Registrar shall refuse an application for registration or any renewal on any of the following grounds:

1. the applicant has been convicted of an offence under the Act;

2. the applicant has been convicted of an offence under the Malaysian Anti-Corruption Commission Act 2009 or of an offence relating to corruption under any law outside Malaysia;

3. the applicant is one of the persons in the finding of an infringement of a prohibition that has been determined by the Competition Commission in accordance with the Competition Act 2010;

4. the applicant has been convicted of an offence and his name has been registered under the Registration of Criminals and Undesirable Persons Act 1969;

5. the applicant, in the case of an individual, is an undischarged bankrupt whether within or outside Malaysia; and

6. the applicant, in the case of a company:
   • is in the course of being wound up or otherwise dissolved;
   • had an execution against it in respect of a judgment debt been returned unsatisfied in whole or in part;
   • had a receiver, a receiver and manager, or an equivalent person appointed within or outside Malaysia, or in respect of any property of the applicant; and
   • has, whether within or outside Malaysia, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation.

Any person or registered person who is aggrieved by the decision of the Registrar may, within  14 days after the registered person has been informed of the  decision, submit a request in writing to the Secretary General to the Treasury for a review of the decision. 

Conduct of Procurement 

Government procurements will primarily be done in an open and competitive manner.  The term “open and competitive procurement method” means a procurement method where all registered persons may participate. However, the Finance Minister has the power to determine procurement methods other than open and competitive bidding, taking into consideration the objectives of the Act.

Transfer, Assignment or Novation of Awarded Contract 

No registered person shall transfer, assign or novate in any manner a grant or contract awarded under the Act, in total or in part, or any interest in a grant or contract awarded under the Act to any person in any manner without the prior approval of the controlling officer responsible for the Government procurement. Any registered person who contravenes the foregoing commits an offence and shall, on conviction, be liable to a fine of not less than three times the value of the grant or contract awarded under the Act or RM1 million, whichever is higher, or to imprisonment for a term not exceeding five years, or to both. 

Duties to Disclose Interest

Any person administering, conducting or implementing a Government procurement having directly or indirectly by himself, a member of his family or his associates, any interest in any matter in a Government procurement shall disclose the fact and nature of his interest including any beneficial ownership.

The term “a member of his family”, in relation to a person, member of  a procurement board or member of a procurement committee, includes:

1. his spouse;

2. his parent, including a parent of his spouse;

3. his child, including an adopted child or stepchild;

4. his brother or sister, including a brother or sister of his spouse; and

5. a spouse of his child, brother or sister.

An “associate”, in relation to a person, member of a procurement board or member of a procurement committee, means:

1. any person who is a nominee or an employee of such person;

2. a firm of which such person or any nominee of his is a partner;

3. a partner of such person;

4. a trustee of a trust under which such person or a member of his family is a beneficiary;

5. any corporation within the meaning of the Labuan Companies Act 1990 or the Companies Act 2016, as the case may be, of which or in which such person or any nominee of his or a member of his family is a director or has a substantial shareholding; or

6. in the case of a co-operative society, includes any person holding the key responsibility in the management of the co-operative society. 

Complaint Handling by the Review Panel

A controlling officer shall establish and administer a review panel for the purpose of reviewing objections on matters relating to the administration and conduct of Government procurements implemented by the procuring entity under his purview in accordance with the procedure, subject matter and conditions as prescribed.

Any person who is dissatisfied with any Government procurement in general may submit a complaint to the procuring entity. The term “procuring entity” in this context refers to the Federal Government or any State Government (as the case may be) that administers, conducts or implements a Government procurement under the Act.

Any person who is dissatisfied with any Government procurement exceeding a certain approval threshold as determined by the Minister may submit an objection to the procuring entity. If such person is dissatisfied with the decision made by the procuring entity, he may then submit the decision for a review by the review panel of the procuring entity.

The decision by a review panel shall be submitted in writing to the person making the objection within a reasonable period. If the person making the objection is not satisfied with the decision made by the review panel, such person may, within the period of 14 days after the date of the decision, appeal to the Appeal Tribunal. 

Establishment of Government Procurement Appeal Tribunal

The jurisdiction of the Appeal Tribunal is to determine any appeal on matters relating to the decisions and process of the decisions of a review panel. Nevertheless, the Appeal Tribunal has no jurisdiction on matters:

1. relating to the contravention of the Act;

2. relating to the investigation and enforcement under Part VIII of the Act;

3. relating to any decision made in relation to a dispute resolution for a Government procurement contract under the Act;

4. arising after the issuance of a letter of acceptance by a procuring entity to a registered person and such etter of acceptance has been signed by parties;

5. relating to any trade secret or intellectual property rights;

6. where a tribunal has been established by any written law to hear and determine a claim; and

7. relating to any complaint or objection that has not been decided by a review panel.

The powers and functions of the Appeal Tribunal include:

1. summoning parties to the proceedings or any other person to attend before it to give evidence in respect of an appeal;

2. procuring and receiving evidence on oath or affirmation, whether written or oral, and examining all such persons as witnesses as the Appeal Tribunal considers necessary to procure, receive or examine;

3. where a person is so summoned, requiring the production of any record, book, account, document, computerised data or other thing in his possession or under his control which the Tribunal considers necessary for the purposes of the appeal;

4. administering any oath, affirmation or statutory declaration, as the case may require;

5. where a person is so summoned, allowing the payment for any reasonable expenses incurred in connection with his attendance;

6. admitting evidence or rejecting evidence adduced, whether written or oral, and whether admissible or inadmissible under the provisions of any written law in force for the time being relating to the admissibility of evidence;

7. receiving evidence from experts; and

8. generally, directing and doing all such things as may be necessary or expedient for the expeditious decision of the appeal.

All proceedings before the Appeal Tribunal shall generally be open to the public. Its decision shall be final and binding on the parties to the appeal. A decision given by the Appeal Tribunal may, by leave of the High Court, be enforced in the same manner as a judgment or an order of the High Court. 

Penalties for Non-Compliance

The Act also introduces punitive measures for non-compliance in procurement processes, including fines and imprisonment, against individuals or entities found guilty of procurement-related offences. Even the Finance Minister is not exempt from accountability for failure to declare interests or interference in the procurement process. 

Concluding Words

The Act seeks to impose clearer checks and balances by introducing express statutory provisions defining the responsibilities, duties and limits of various stakeholders in procurement matters. Importantly, decisions made by the authorities may now be subjected to review by a designated panel and appeal before an independent Appeal Tribunal. This will move Malaysia closer to aligning its Government procurement framework with international public procurement standards, particularly the principles of transparency, open competition, fair treatment and integrity reflected in the UNCITRAL Model Law on Public Procurement.

Nevertheless, while the creation of procurement boards and conflict-of-interest safeguards strengthens governance, the concentration of final decision-making power in the hands of Ministers and Chief Ministers may still present risks of excessive discretion. In particular, under section 2(2) of the Act, the Finance Minister or state Chief Ministers retain the power to exempt ‘one-off allocations’ from the application of the Act for any Government procurement by any statutory body, local authority, Federal Government entity, State Government entity or any other entity in relation to any new programme, which includes government-linked companies and statutory bodies.

Further, section 28(2) of the Act empowers the Finance Minister to prescribe procurement methods other than competitive bidding; and section 12(8) further designates the Finance Minister as the final authority where a procurement board fails to reach unanimity. For procurements exceeding RM50 million, the approval authority rests solely with the Finance Minister at the federal level or with the Chief Ministers at the state level. Although the Finance Minister or the Chief Minister must first obtain a recommendation from the relevant procurement board, section 13(3) of the Act expressly allows him to depart from such recommendations at his discretion.

Ultimately, the effectiveness of this new public procurement framework will largely depend on the robustness of the accompanying regulations, enforcement of various obligations and duties under the Act, and the operational independence of procurement boards, review panels and the Appeal Tribunal.

For persons engaging or intending to engage in Government procurement, it will be critical to understand the approval thresholds applicable to their contracts, anticipate the role of procurement boards in shaping recommendations, and recognise that ministerial or state-level approvals remain decisive and binding.

Should you require further information or any advice on the above or any other matters pertaining to projects, energy and infrastructure, please feel free to reach out to any member of our team.

Contribution Note

This Legal Update is contributed by Partners Lim Siaw Wan and Chris Tan, with the assistance of Vanessa Khoo (Associate, Christopher & Lee Ong).